Electric vehicles: 3 reasons why they are going to be adopted quicker than we think.
There are varied perceptions of electric vehicles. Some traditional motorists will quickly dismiss them, claiming that their range limitations, recharge times, and upfront costs are an insurmountable obstacle to widespread adoption. On the other end of the spectrum, you may hear some electric vehicle owners proclaim that they are the next logical step in the development of the automobile; after all, they are silent, efficient, produce zero or low emissions (depending on the electricity source), and have low operating costs. Given the spectrum of opinions – and their potential role in reducing carbon emissions – it's important to ask the question: Which of these two sides is more accurate?
I research the electric vehicle market (EVs) in British Columbia. The province of British Columbia serves an interesting case study as our electricity grid is incredibly clean with approximately 90% of BC Hydro's generation being produced by hydroelectric generation. Such a low emission electricity grid – combined with the fact that nearly half of our emissions come from transportation – means that widespread electric vehicle adoption has the potential to drastically cut our carbon footprint. Prior to my research, I had no idea what to think of electric vehicle adoption. I generally accepted the results of studies that found a slow (but modest) adoption of electric vehicles in a variety of markets. To this day, my opinion hasn't changed much; after all, electric vehicles operate differently than conventional vehicles and require a behavioural change on the part of the consumer. It is truly an uphill battle. Yet, the more I delve into research and the more I follow the developments of the EV market (both consumer and producer), the more I believe that EVs might get adopted much quicker than we are led to think. Here are three reasons why I think we might be in for a surprise:
1. It's all about surveys.
A majority of studies assess demand for electric vehicles by distributing large surveys to potential vehicle buyers (see example). While there is nothing wrong with surveys per se, there is a very real difference between being asked to select an imaginary vehicle with different attributes on a computer screen and actually purchasing a real vehicle. It is here where the issue lies. Vehicles are major purchases; they have incredibly large upfront costs, and are often purchased with the expectation they will last several years. Furthermore, vehicles are a very visual object – you drive in your vehicle in public spaces. And, like most products we buy, we don't always make a decision based on cost. This is where surveys dampen the prospects for widespread electric vehicle adoption: they attempt to remove an individual's identity from the purchase decision.
Let's have a theoretical sample where I am given a survey to complete. To look at my intention to adopt or willingness to purchase an electric vehicle, I may be given a set of choices. The first choice may be a conventional vehicle, with some specified upfront cost and fuel economy. The second option may be a similar class electric vehicle, with a higher upfront cost and its time to fully recharge. The third option may be some variation on the second, with a different cost and recharge time. Now, given the information provided to you, what do you think you would select?
Exactly. Being asked to choose between a couple of numbers and fake vehicles on a survey remove our self-identity from the equation. Vehicles are part of a myriad of products that we purchase to define ourselves, determine who we are, and to communicate that identity to others. While we may like to think each vehicle purchase is done based on the results of a sophisticated spreadsheet we create, we know reality is very different. Electric vehicles offer new ways to define ourselves and form an identity. But seeing a clip-art of a cartoon-like electric vehicle on a computer screen along with its cost and recharge time simplifies the actual purchase decision. It is no wonder most studies find that only extreme environmentalists willing to pay a premium are likely to buy an electric vehicle – because they are the only ones that would choose the more expensive and environmentally-friendly option offered before them on the survey, without knowing what the car looks or feels like. The end result of these surveys is, I argue, an underestimated market potential. A variety of individuals may find something in an electric vehicle that relates to their identity, and those intangible factors are near impossible to account for in a survey.
2. We underestimate what a company like Tesla can do
Just a few years ago, the electric vehicle market was much less interesting. Not many vehicles were offered, and those that were available were some combination of expensive, uninspiring, and lacking range. Then in June 2012, that all changed. Tesla released the Model S: a luxury EV with a 426 km all-electric range. It was so successful that it went on to win awards such as the 2013 World Green Car of the Year, 2013 Motor Trend Car of the Year, Time Magazine's Best 25 Inventions of the Year, Automobile Magazine's 2013 Car of the Year, and even the Consumer Reports' top scoring car in history. And no, this wasn't in comparison to other electric vehicles – this was in comparison to the entire automotive market. Oh, and did we mention it also scored a perfect 5.0 NHTSA safety rating? Even the traditional motorists were taking a second look, pulled in by its negligible operation cost and staggering performance (the 2012 model boasted 416 hp, 443 ft-lb of torque, and a 0-60 mph time of just 4.2 seconds).
If the specifications and performance didn't intrigue you, maybe the company itself did. Many believe automotive manufacturers have intentionally held back the electric vehicle as its next-to-zero maintenance threatens their bottom line. Enter Tesla, the "innovative" company out of Silicon Valley, not run by people in suits but by smart, passionate innovators out of California. This is a powerful image to have in the market, and it's no wonder Tesla has managed to achieve incredible levels of early success in a market notoriously difficult to enter.
Some critics dismiss Tesla, however. They claim this is merely an initial fad of admiration that will quickly die off – but I wouldn't be so sure. Elon Musk has managed to change the way we purchase goods, the way we travel in space, and now the way we think of electric vehicles. Whether or not you like Elon Musk, one thing is for sure: he puts every last penny on the line if he believes in something. And he really believes in Tesla. He seems to have an intricate plan worked out where he catalyzes the automotive industry into action. From the launch of the Model S, the release of his patents to public domain, to his plans to develop a mega-factory for battery production to drive down supply costs, he seems to have it figured out. Financial analysts seem to agree, with a majority recommending to buy Tesla stocks despite their sky-high price hovering around $200 a share.
Even if you don't believe in Tesla, you should believe in how it will change the market. Just a mere 4 years after the launch of the Model S (and around the same time Tesla was expecting to launch a $30,000 vehicle), Chevrolet will be launching a 400 km range electric vehicle of its own: the Bolt (expected to be around $30,000 as well). 2015 is also set to become the year with a record new number of electric vehicles hitting the market from a variety of different manufacturers. All of this, just a few years after the market featured only a few, uninspiring vehicles with high upfront costs and 70-160 km electric ranges. While correlation doesn't equal causation, I'm putting my money on the latter in this one. Automotive manufacturers know Tesla is a threat, and they are responding just as you would expect them to. After all, the Model S receives over-the-air updates on a regular basis, with new software features being added to the existing fleet (with options like automated driving on highways and the ability to summon your parked car to wherever you are). This ability to receive updates means that the Model S is a car that will actually get better over time as you own it. Think about that for a minute.
3. Once a new technology hits a certain tipping point, the switch can be drastic
Perhaps the biggest constraint for electric vehicles is that they operate differently than conventional vehicles. They are quiet, they have higher upfront costs but significantly lower operating costs, and they run on electricity and use a battery that must be recharged. For the past 100 years humans have become familiar with the traditional conventional car. It's polluting, it's loud, has a low up front cost but high operating cost, and runs on gasoline that is refueled at any number of gas stations. This stark difference has resulted in what many call "range anxiety". Electric vehicles have a range that they can travel on a given charge. For someone that has owned a conventional vehicle, this is worrisome. When your battery gets depleted, you cannot simply stop at a gas station and fill up within 10 minutes and be on your way. You need to find a charging station to recharge it, or you need to prepare to run out of power. This fear, or "range anxiety", is expected. But is it rational? Well, that's up for you to decide. But many electric vehicle owners adapt to their car, and realize they actually prefer it to a conventional vehicle. After all, how far do you drive on an average day? Studies have found that even the range of a Nissan Leaf (~140 km) meets the daily driving needs of an average American over 95% of the time. The only time you may exceed that range would be on road trips – but a little bit of planning and you can manage. Furthermore, you won't have those moments when you need to frantically stop for gasoline (while usually already running late) because your tank is near empty. Each morning, you wake up with your full range in your electric vehicle.
It's not up to me to argue if one is better than the other, but the general consensus among EV owners is that after a brief learning phase, they began to prefer the electric-drive and range of an electric vehicle to a conventional vehicle's internal combustion engine and need to refuel. As electric vehicles become more widely adopted, potential vehicle buyers will gradually become familiar with how they operate. This experience can go a long way to shifting someone's perception of a technology. Even just a short ride as a passenger could be enough to foster this change.
So when you start seeing a few more electric vehicles on the road, watch out! The rate of change in transportation might be quick – and it's in our very best interest that it is.
This article was originally posted by Sustainable Collective, which has since joined forces with The Starfish Canada.