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Consumers Are Coming Around on Electric Vehicles

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Consumers Are Coming Around on Electric Vehicles

As prices drop and technologies improve, electric vehicles are now set to become a mainstay on U.S. roads and even in the U.S. military.  Though adoption rates for the technology are clearly on the way up, manufacturers will still have to convince Americans that electric vehicles are cost effective, safe, and reliable.

Market research firm Navigant Research today released a survey report showing that American opinions on alternative-fuel vehicles are steadily improving.  The firm found that around 67% of those surveyed now view hybrid vehicles favorably and that 61% now view plug-in electric vehicles favorably.  Natural gas vehicles were also found to be viewed favorably by around 56% of those surveyed.

The survey also found that consumers looking for alternative-fuel vehicles are most concerned about saving money.  Fuel efficiency was a top concern for potential buyers, followed by other factors such as performance and the size of such vehicles.

Though the industry has obviously hit a tipping point, Navigant also found that manufacturers will have to work hard to build awareness for their brands.  The survey found that less than half (44%) of respondents knew of the Chevrolet Volt.  Awareness for other brands was even lower, with less than 33% having knowledge of the Tesla Model S, Nissan Leaf, and BMW i3.

“Two-thirds of consumers surveyed stated that they believe EVs have unique features that stand out from their gasoline counterparts, and 6 out of 10 agreed that EVs are much less expensive to own in the long run than gasoline cars,” said Dave Hurst, principal research analyst at Navigant.  “While those are encouraging numbers, it’s clear that automakers still have a long way to go in marketing these vehicles to the wider car-buying public.”

(Image courtesy Tesla Motors)

 

These 5 things need to happen before electric cars really go mainstream

By Lydia DePillis, Published: September 19 at 4:18 pm

The Washington Post

https://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/19/these-5-things-need-to-happen-before-electric-cars-really-go-mainstream/

In 1997, the world’s first real consumer-oriented electric car — the Prius — debuted in Japan. Sixteen years and many new models later, electric cars have stayed stubbornly at about 2 percent of global sales for light vehicles, which Navigant Research projects will only grow to 3 percent by 2020. Tesla may be doing well, but their $70,000 car won’t reach the masses anytime soon. Chevrolet’s Volt has had a rough ride, sales of Nissan’s Leaf have disappointed, several battery companies have failed, and Israel’s battery-swapping BetterPlace went under. Just this week, a car charging company that had received a $99 million federal grant went bankrupt.

But the sector is far from dead. The past few weeks have seen something of a boom in rollouts of new electric cars: General Motors is developing a $30,000 vehicle that can go 200 miles on a single charge, BMW is plans to launch the i3 this fall, and Volkswagen says it will bring an electric compact to the United States within two years. The all-electric Fiat just went on saleCadillac, Audi and Mercedes have prototypes as well.

Is the sudden proliferation a sign that electric cars are actually moving into the fast lane? Maybe. But there are still a bunch of pieces that need to fall into place before we’ll see very widespread adoption. Here’s what has to happen.

1. Batteries need to get cheaper. 

A battery for an electric car still costs as much as most regular cars — about $12,000 – $15,000 each. As Brad wrote back in May, that’s in part because they’re not like computer chips: You can only fit so many ions in the available space, so we’ll need a real chemistry breakthrough to increase their energy density.

It’s possible, though, that this is just a question of scale. McKinsey thinks the cost of batteries could be cut in half by 2020, as more factories come online to produce them, and Deutsche Bank sees car batteries declining in price the same way laptop batteries did. If China gets serious about reducing emissions, the scale problem could be solved — the problem then would be keeping up with demand.

2. Drivers need to believe they won’t be stranded.

Right now, only California has a substantial number of charging stations, which means it’s difficult to take a long-distance drive with your plug-in electric car. The Department of Energy dispensed a few million dollars for charging stations, but they can’t pay for all that are needed — the Center for Automotive Research estimates that charging infrastructure costs $2,160 per hybrid electric vehicle. In California, employers are increasingly offering charging stations to their staff, and NRG is starting to sell stations to anybody else who wants them. But it’s not like a gas station, where you can make a living selling fuel — these will have to be installed as amenities in workplaces and residences, or as part of government-driven efforts to string them along highways.

If electric vehicles really replace millions of gas-powered ones, they’ll also start to suck up more electricity than the grid can handle, which makes distributed generation — wind and solar energy, for example — much more important.

3. Policy supports need to expand, and not disappear unpredictably.

Over the years, America’s federal and state governments have enacted quite a few supportive policies for alternative energy — tax incentives, direct subsidies, fuel economy and renewable portfolio standards, high-occupancy vehicle lanes, etc. Particularly important, right now, is a California rule that actually requires large auto manufacturers to either produce zero emissions vehicles or buy credits from those who do. While it would help to see those kinds of programs be implemented on a federal level or even by more states, the fact that they exist in one of the United States’s biggest markets will kick-start production.

People in the alternative fuel industry know that incentives, which currently make electric cars much cheaper than they’d otherwise be, won’t stick around forever. Unpredictable disappearances, though, can be devastating. That’s what happened repeatedly to the wind industry, as tax credits expired again and again during partisan energy policy fights in Washington:

Screen Shot 2013-09-19 at 2.52.39 PM“Policy certainty is necessary for a length of time,” says Phyllis Cuttino, director of the Clean Energy Program at the Pew Charitable Trusts, which put out a report after hearing from the industry. “They said, ‘We only want it until we become cost competitive. And then, let us go.'”

4. Gas prices need to get high and stay high.

Auto manufacturers convince customers that the higher sticker price of an electric vehicle pays for itself over time through savings on gasoline, and that calculus looks better the more expensive gas gets. Unfortunately for the near term future of electric cars, gas is projected to stay steady for a while, which means batteries need to get cheap as quickly as possible.

chart

5. More people need to try electric cars.

People who’ve driven electric cars tend to understand they’re a lot like regular ones. Car sharing programs like Zipcar, which have introduced some electric vehicles as part of their fleets, are a good way to make the introduction.

“It’s one of the things that we see when we ask people about these technologies. If people have seen and experienced technologies, they are much more likely to consider them,” says Pew’s Cuttino. “If you are out west and you see a million wind turbines, you’re going to understand wind energy.”