The White House and car manufacturers have bold plans, but is it realistic?
In Germany, nearly 14% of new cars sold in 2021 will be pure electric vehicles, and another 12.5% will be plug-in hybrids. Britain has a plethora of Battery Electric Vehicles, accounting for 11.6% of new car sales last year.
They are also buying more electric vehicles than ever in America. But BEVs still make up just 3% of the new car market in 2021. This is a concern when it comes to the country’s ambitious goal of Electric Vehicles making up half of all new car sales in less than a decade.
Advocates for transportation and climate change had hoped for a comprehensive plan to decarbonize the way Americans travel across the country, but like many ambitious plans, the push failed to survive contact with the U.S. Senate. What has been agreed is a new federal policy that says that by 2030 half of all new cars and light trucks should be zero-emission vehicles – hybrid electric, plug-in hybrid and fuel cell electric. Plus $7.5 billion for more Electric Vehicle chargers.
But these ambitious goals have yet to fully permeate the rest of the Americans federal government. Despite heavy criticism from the White House and the Environmental Protection Agency, the USPS will initially only procure 5,000 Electric Vehicles to replace 50,000 to 165,000 delivery trucks.
The good news for those hoping to see increased Electric Vehicle adoption in the U.S. is that consumer interest is greater than ever. Online car retailer CarMax said customer searches for electric vehicles will rise steadily from 2021, as will test drives. Both trends increased significantly between February 2022 and March 2022. Gasoline prices rose an average of 66 cents a gallon over the same period.
Switching to an electric vehicle isn’t a particularly cheap option when buying a new car, especially since many automakers are focusing on the lucrative premium segment when launching new electric models.
Those looking for a bargain, on the other hand, rarely buy new cars, with CarMax pointing to the Chevrolet Bolt, BMW i3, and Nissan Leaf as three popular Electric Vehicles that all sell on the used market. Still, CarMax’s most popular electric car is the Tesla Model 3, with an average price of $49,440.
The easiest way to convince someone of the superiority of electric vehicles is to put them together for a few minutes. JD Power confirmed this idea again with another study of car buyers’ attitudes towards switching to electric vehicles. The analysis found that 24 percent of new car buyers would be willing to consider buying an Electric Vehicle if they had driven one, while 34 percent would be willing to consider buying an Electric Vehicle if they had driven one before.
JD Power’s data shows that these car companies are racing against time as buyers of premium vehicles are twice as interested in electric vehicles as those seeking mass-market vehicles. But it found that among mass-market owners, those who say they are “likely” to buy a new electric vehicle increased by 6 percent, compared with just 1 percent among premium owners, suggesting a willingness to accept more affordable electric cars.
Both CarMax and JD Power point to a geographic imbalance in Electric Vehicle adoption in the US. Washington, California, Utah, Arizona and Oregon will see the highest Electric Vehicle sales from the beginning of the fourth quarter of 2021 to the end of the first quarter of 2022, with JD Power saying that the coastal states have higher sales than the central U.S.
JD Power found that more buyers in the West were “very likely” to consider Electric Vehicles, while the South actually outperformed the Northeast and North Central regions.
The good news is that Americans are interested in EVs, and that interest is only going to grow as established OEMs and startups bring more new EVs to market. However, it is not a foregone conclusion that by the end of the century, the ratio of electric cars to internal combustion engine cars will be 50/50.
The problem starts with the supply of raw materials needed to make large lithium-ion battery packs for electric vehicles. Analysts and CEOs of car companies have warned time and time again that there may not be enough batteries to meet all product plans. This would put Americans at a disadvantage, as there are penalties for not complying with European and Chinese emissions regulations. Meanwhile, U.S. efforts to improve incentives for electric vehicles have failed miserably in the Senate.
In other words, if a company only has enough batteries for 70% of its needs, it will prioritize these EVs for use in Europe and China. The U.S. cannot achieve its transportation climate goals without more ambitious state and federal policies to encourage greater adoption of electric vehicles.
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