The Expectation Spread
When it comes to predicting the growth of plug-in vehicle sales, there's a pretty wide range of expectations. Given the current reticence of the market and the historic trend of electrified vehicles like hybrids bumping up against a seemingly impenetrable ceiling, many of the predictions are extremely conservative. The U.S. Energy Information Administration's model predicts only 10% of the auto market will consist of plug-in vehicles by the year 2040.
On the other side of the coin, Bloomberg New Energy Finance cites the rate at which battery costs are falling and pushes by governments around the world to encourage electrification to justify a prediction of 54% of the market being plug-in vehicles by 2040. That spread is a bit shocking, but ultimately it shouldn't be that surprising, given the disappointment over hybrid sales in the U.S. market. While many people saw a game-changing technology, predicting a 10% share by 2010, the reality has been a decline since hybrid share topped out just over 3% in 2013.
And that speaks to the nature of today's debate. The fact is, electric propulsion is the future of the auto industry. Electric power is cleaner, more efficient, easier to distribute, requires less maintenance and works better with emerging trends such as autonomous vehicles and the expansion of shared mobility fleets. It also happens to have the potential to be more fun, with Tesla demonstrating the joy of instant torque to the market with its Ludicrous Mode.
With these advantages, the industry generally agrees that in the future pretty much all cars will be electric. But the fierce debate still rages over when that future will occur. And the two sides seem to be characterized by their varying degrees of faith in our ability to overcome the manifold obstacles to EV adoption.
Take for example the charging infrastructure. Right now, it can be a bit of a chore to own an electric car compared to its gas counterpart. You always know you can stop for some liquid energy within a few miles, and the wait will be a few minutes tops, though usually you can pull right up to a pump. But finding an open charging station is a different prospect altogether. There are actually quite a few around in many areas, but they may not be on your charging network, and the fee structure can be confusing. Or they might be occupied, or behind a locked fence. It's doable, but not nearly as easy.
These issues are solvable. There are charging networks being built out by several different companies currently, but according to Dept. of Energy data, there were less than two new public charging spots built each day so far in 2017. That rate will need to accelerate drastically to support the 100,000 plug-in vehicles that were sold here through August.
Public utilities have an incentive to make a push to accelerate this to compensate for falling electricity demand. But we also have an extensive network of solar generation that's being built out in this country, much of it on private property. The more solar power we generate, the more that'll be available for sale back to the grid. And this build-out dovetails nicely with the idea that private citizens could make their charge points available to the public for a modest, app-enabled fee.
But of course there are those who doubt that any of this will make a lick of difference. They see the convenience factor as paramount, and don't believe that drivers will be able to ween themselves off the notion that fueling should be a quick affair during which we literally stand by the vehicle.
But if the industry can convince the public to reorient their conception of how to keep their vehicle juiced up, as Sebastian Blanco suggested recently in Automotive News, that gap in expectations may shrink massively, and the adoption rate could fall much closer to the high end of that range.
Man, it’s been a while since I read this piece, so I had to revisit it. Anyway, this MBA bought a Model 3, and thinks it’s the best car he’s ever owned. It’s better than an equivalent BMW 3 Series at the same price, even without rebates. While a growing portion of the public knows this, too many don’t, so there’s still doubt as to the adoption curve. But once the public is fully aware of how much better an EV is, the flood gates should open.
Good write up Randy. But here's the rub. Cheap gas combined with consumers' love of pickups, SUV's, crossovers and high octane powered horsepower create little need or want for BEV's (especially in consideration of economic trade-offs and the incessant need for subsidies). I agree that there is a white space for educating consumers to the benefits of electric vehicles; indeed, robot cars too. Perhaps a gas tax would help sway consumers toward electrics; but like any MBA would tell you, the business case doesn't presently box and may not for quite some time. Besides, let's face it, my Cayman and M235i sound way cooler than any slot car electric. We can agree there's more to the thrill of performance cars than acceleration. I'll take the siren song of a BMW inline 6 or a boxer flat 6 over the electric shaver whine of a Tesla any day. You?