EV Sales Slow As Buyers Want 20-Min Charging And 350-Mile Range
Tesla cars plugged in and charging at a Supercharger in Silicon Valley, August 24, 2016. (Photo by ... [+] Smith Collection/Gado/Getty Images).
Getty ImagesCould electric vehicle (EV) makers have moved too aggressively into the marketplace without first convincing the motoring public en masse that replacing gas-powered cars with EVs is the right one and at the right time? It's looking that way. Yes, EV sales have risen over the past few years, but that fast manufacturer push for massive EV adoption by 2030 has stalled.
In a sobering revelation from a Boston Consulting Group study, the vast majority of potential EV adopters want three things to happen before they'll seriously consider switching from gas to EV -- they want under 20-minute charging times, a 350-mile plus driving range and a sticker price of under £50,000. With only one EV -- the Hyundai Ioniq 6 SE RWD Long Range -- meeting those criteria, the industry has a long way to go. In this article, let's have a brief look at the reasons why manufacturers are pairing back EV production, as well as three reasons why consumers are not adopting electric cars as rapidly as many observers predicted.
In the US, EV sales have increased since 2016. In 2017, there were around 65,000 EVs sold, and by 2022, that number had ballooned out to over 800,000 sales. Following an upward trend, EV sales increased 51% in the first half of 2023, according to data from auto analytics company Motor Intelligence.
Still, those gains represent a decline from the 71% growth in the same period last year. In addition, Tesla, the market leader with over half of all EV sales, recently revealed its lowest quarterly profitability in the previous two years, which caused a £138 billion decline in the value of the company's shares. Meanwhile, in Britain in September last year, prime minister Rishi Sunak made a major U-turn on the country's planned ban on gasoline vehicles when he announced that his government was postponing its introduction from 2030 to 2035.
LISBON, PORTUGAL - NOVEMBER 07: Presentation of the new Mercedes-Benz EQ battery electric vehicles ... [+] and the new office. (Photo by Horacio Villalobos#Corbis/Corbis via Getty Images)
Corbis via Getty ImagesIn yet another sign that EV adoption is stalling, Mercedes Benz in February this year announced that it won't meet its 2025 deadline to have EVs, including hybrids, make up 50% of all sales.
The reason--lackluster demand for electric-powered vehicles has delayed that goal until at least 2030, the company said. Toyota on the other hand, is sticking to its guns and continuing to offer a mix of gasoline-hybrid, plug-in hybrid, hydrogen-powered fuel cell cars and electric vehicles for the foreseeable future. To maximize profitability, General Motors has announced that it is pulling back on its plan to build 400,000 EVs by mid-2024.
Two years ago, the company said that it will phase out internal combustion engines by 2035. Plans to collaborate with Honda to develop a range of more reasonably priced EVs have also been scrapped. Executives at Ford said they don't currently require the production capacity to fulfill demand, thus they are postponing billions of dollars in EV investment.
Now, here are three reasons why EVs are not selling as expected, this time from the consumer side. Firstly, and most importantly, EVs are expensive. An EV's average price in the U.S. for 2023 was around £60,000.
Even as the variety of EV models available rises and prices fall, and the U.S. brings in tax credits, EVs remain much more expensive than their gasoline-powered counterparts. With U.S. interest rates at a two-decade high, the price tag for the average American car shopper is prohibitive. A Harvard Law School report looked at over a decade's worth of EV prices and concluded that the average price of an EV is going up, not down.
Even with a federal subsidy of £7,500 towards the purchase price of an EV (made in the U.S.), many consumers still find gasoline and hybrid vehicles more affordable. For example, Toyota and Honda, who both only offer one EV each at present, both recorded substantial increases in sales in the U.S. of their hybrid vehicles, with Toyota up 16% and Honda up 32% on last year.
The Toyota Prius sold well in 2023 as buyers paired back interest in EVs. (Photo by Tomohiro ... [+] Ohsumi/Getty Images)
Getty ImagesSecondly, with EVs of course, you have the charging issue. For many typical Americans, powering EVs is hampered by more reasons than just the cost of installing a home charger.
There is nowhere to put the chargers. If you could recharge your electric vehicle while you slept in your home's driveway, then it might make sense to get an EV. The issue is that a large number of Americans do not even own driveways. "One in three shoppers don't have access to home charging," says J.D.
Power. Finding a charging station is now far more difficult than refuelling your car with gas. It will take you around five minutes if you pull up to a gas station with an empty tank.
With EVs, it could take hours to recharge depending on how busy the station is, and whether it's operational or not. Experts concur that the establishment of a strong public charging station infrastructure is essential to the widespread adoption of EVs. However, the development of that infrastructure is slow.
Charging stations are not as plentiful and gas stations, especially in low-income and minority areas. And even when you can find a charging station, chances are it will be unusable. According to research done in 2022 by the University of California, Berkeley, one-quarter of public chargers in the San Francisco Bay Area did not work due to unresponsive screens, payment system anomalies, network failures or just broken connectors.
Thirdly, EVs are still seen as a supplement and not a replacement for gas cars. According to the Harvard Law School report, the strong springboard reaction to EV sales was led by early adopters, to whom the electric car was an easy sell. Nowadays, the majority of those who see the benefits of owning an EV already have one.
Middle-class Americans should be the next purchasing target category, but carmakers haven't been able to get them interested in entering the market. There's also strong evidence that shows most of the individuals who buy electric cars also own an internal combustion engine-powered vehicle," says the Harvard Law School report. "They are not switching to electric vehicles from their gas-powered vehicles. Most electric vehicles are bought as "complements," not as replacements, according to economists.
They're merely increasing the overall quantity of automobiles they have on hand."
Even though carmakers may have misread the speed at which Americans would buy into this EV transformation, and are rethinking their strategies, manufacturers still believe that EVs are the future.
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