- Electric Vehicles
- EV Charging
- EV Charging Infrastructure
Lower Price Points for EVs Increase Accessibility, but Challenges Remain
The price of EVs is often cited as a deterrent for many people looking to purchase a new vehicle. With the $7,500 federal tax credit (phasing out for some automakers) combined with automakers committing to producing affordable EVs, however, the price point for economy brand EVs will continue to fall in 2019. Hyundai announced in December 2018 that the electric variant of the compact crossover Kona will have a price tag of $30,000 after incentives. Lower price points for EVs indicate that the market demand for these vehicles is high enough for the automakers to make the investment in less expensive EVs. Consumers are showing increasing levels of interest in EVs and lower price points make them more accessible, but challenges to adoption remain. With EVs becoming available in almost all vehicle segments, the last remaining major challenge is charging infrastructure.
New Body Style, New Opportunities
Outside of cost, one of the biggest hurdles for EVs has been vehicle body style and aesthetic. In the early years of electrification, EVs were only available in low volume, small car segments. Vehicles such as the Nissan Leaf, BMW i3, and Chevy Volt attracted early adopters, but left much to be desired from consumers with vehicle needs outside of the compact car segment. In 2018, a new wave of EV body styles emerged, with crossover EVs coming to market and many more planned for 2019 and the early 2020s.
While consumers now have greater and more attractive options, the eligible consumer audience remains constrained. Most EV owners use residential chargers which makes the organic development of public chargers difficult, which in turn makes it difficult for drivers without a garage or electric outlet near their parking spot to go electric. According to Navigant Research’s Vehicle Preference and EV Awareness Survey, over 40% of respondents did not have an outlet near their home parking spot. If not confronted, this issue threatens to sustain the current market paradigm wherein wealthy classes are the primary beneficiaries of government EV subsidization. Governments and utilities are sensitive to this issue and are trying to fill the gap by installing public charging.
Government Support Aids Charging Infrastructure
In 2018, several multi-unit dwelling charging infrastructure programs were started, including the City of Santa Monica’s Multi-Unit Dwelling EV Charging Station Pilot Rebate Program. The program, sponsored by the City’s Office of Sustainability and the Environment, offers rebates that offset the purchase and installation cost of charging stations. Southern California Edison’s Charge Ready workplace charging program has installed chargers in over 60 locations across Southern California. In Europe, plans for large public charging networks are being developed with government support, such as the Ultra-E and Mega-E charging networks.
Charging infrastructure challenges remain, though, despite public charging investments from utilities and governments. There remains a high risk of the asset stranding of infrastructure once higher powered chargers are brought to market and installed. Despite the challenges surrounding infrastructure, many investors and consumers justify the expenses based on idea that EVs are a matter of “when” rather than “if.” However, for EVs to truly capture the market they need to ditch the elitist image and continue gaining popularity in the mainstream.