Electric Vehicle Market is Still Stalled May 26, 2017 by Rick (Driver Weekly)

According to various national metrics associated with the purchase and regular use of EV/PHEV vehicles, the United States now has 530,000 electric and hybrid cars on the roads nationwide out of a total 253,000,000 vehicles. This represents just 2.1% aggregate market share. Regardless of the environmental buzz associated with electrified cars, this annual metric has largely remained glacial, if not entirely static, during the last five years.

Overview

Based on 2013 numbers provided by the National Transportation Safety Agency (NHTSA), most states still have few electric vehicles on the road and a corresponding lack of infrastructure. The deepest sales penetration among the top-ten states with EVs actually in the State of Georgia offering a 1.6% total; while the lowest share is in the State of Connecticut at 0.19%, thereby producing an average market share of 0.9%. There are still a number of barriers to significant market growth to consider, including:

1. The current administration's lack of interest in governmental subsidies, tax exemptions, or other previous sales/cost motivators.

2. Unfavorable cost economies that obstruct reductions in EV entry pricing. The EV supply chain, i.e. batteries and other sub-system manufacturers, is smaller and thus more expensive than the ICE supply chain; this ultimately creates a higher floor for MSRP pricing.

3. Unresolved concerns regarding on-going maintenance costs, particularly in the case of mature battery management, the lack of service support programs, and ultimately, environmentally sound battery disposal processes.

4. Continued slow growth in the large-scale charging sector. The range between regeneration points and excessive charging times require continued research and developing.

5. A general lack of large-scale used-EV inventories prevent their sale to certain consumer sectors and maintains higher prices for new models.

6. Static, shrinking, or uncertain customer demand.

7. Regulatory turbulence associated with the infrastructure, permitting, emission policies, and industry standards.

8. The energy sectors emphasis on fossil fuel development and deployment.

Geographic Constraints

Tesla

While all of these concerns are significant, the central concern regarding general adoption of EVs is linked to regional consumers. In this case, the value proposition is a matter of geography rather than an interest in the technology or its potential advantages. For example, the following hot map reveals the domestic access-densities to charging stations from August 2015 to August 2016:

While the number of charging stations continues to grow coast-to-coast, the differences between urban, semi-rural, and rural areas are clear. The highest access densities primarily exist in major metropolitan centers in the New York- Washington corridor; Chicago, Dallas, Austin, Denver, and, as one might expect, the West Coast from San Francisco to San Diego. However, while there are clusters of charging points scattered nationwide, if you are an EV driver who wants to drive from Austin to El Paso (just 576 miles point-to-point on the I-10) you need to plan an inefficient route that accommodates charging stations as well as dealing with whether or not a particular transit point has fast charging (DC) access the right charging system, and recognizing the intrinsic limits relating to specific cars and battery ranges. Poor infrastructure growth and competing charging systems make it difficult for non-urban drivers to consider an EV.

While EVs like the Tesla Model S (and upcoming Tesla Model 3), Chevrolet Bolt, and Nissan Leaf offer legitimate value for todays driving public, as a practical matter, this is only true in dense urban centers. Consequently, as long as that limitation exists, any at-large adoption of electric cars will be moot, particularly since there are still coast-to-coast gas stations available nearly every 25 miles on the Interstate. Industry standardization, government regulation, and improved charging technology are required to reenergize the EV market in the future.

 

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