Daily Update: Overcoming the Barriers to EV Adoption

Today is Wednesday, July 10, 2024, and here’s your curated selection of essential intelligence on financial markets and the global economy from S&P Global. Subscribe to be notified of each new Daily Update. 

When you first drive a battery-electric vehicle, it can be challenging to overcome the sense that the car is off. Internal combustion engines provide a variety of sensory clues that the car is operational, such as the growl and vibration of the engine and the faint smell of exhaust. Battery-electric vehicles (BEVs), by contrast, lack that physicality. Some electric vehicles attempt to compensate for this absence of sensory input by providing fake engine noises. The field of psychophysics, which studies our sensory interaction with materials, has a lot to say about consumer resistance to EVs. 

When discussing that resistance, consumers rarely mention missing the vibrations of an internal combustion engine. Instead, the three most cited barriers to EV adoption are cost, infrastructure and range anxiety. Bryan Birsic, CEO of Motor, a company that helps drivers discover, switch to and stick with EVs, recently joined S&P Global’s “Energy Evolution” podcast to talk about overcoming the barriers to EV adoption.

While great strides have been made in reducing the costs of EVs, particularly in China, there remains a higher initial price for BEVs compared with conventional cars. Birsic pointed out that this higher up-front cost may be somewhat misleading since it doesn’t account for the cheaper cost of electricity versus gasoline, or the lower maintenance and repair costs for BEVs. As EV adoption expands beyond a core market of committed consumers, price grows in importance. 

On the podcast, Birsic expanded on this point: “We’re at a crossing the chasm moment. … We’re getting to people who are normal Americans, where the economics really talk and the used-car value talks. I think that the movement by [original equipment manufacturers] to get cheap autos out is a big deal and very positive.”

Infrastructure is another area of concern. While charging networks continue to expand, a lack of standardization for charging infrastructure has held back the industry. Birsic is enthusiastic about the increased adoption of the North American Charging Standard by different carmakers. This standard, already in use at Tesla charging stations, has been competing with the combined charging system and CHAdeMO standards.

Finally, there is the challenge of range anxiety. Birsic pointed out that consumers tend to have a limited understanding of how far they are driving every day. For most drivers, a 200-400 mile range on a full charge for a BEV is going to more than cover their daily needs. For longer trips, Motor and companies like Google provide maps that account for charging needs.

Today is Wednesday, July 10, 2024, and here is today’s essential intelligence. 

Written by Nathan Hunt.

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