Have Plug, Will Travel – The Battery Electric Vehicle Revolution Has Arrived

March 28, 2019

The “Automotive Revolution” has arrived – not with a bang, but with silence. Battery Electric Vehicles (BEVs) – with their emission-free, high-torque benefits – have already become ubiquitous on the streets of the world’s largest cities.

Injected into the consciousness by Tesla, which made BEVs cool and sporty while boosting their range between charging cycles, BEVs are finding their way into the hands of a growing number of consumers. In 2018, more than 2.1 million new car buyers around the world chose battery power – motivated by energy-consciousness, the cool factor, or simply being the early adopter for new technologies.

At the same time, it’s still unclear who will be the target buyer for the new generation of BEVs. Though actor Tom Hanks once famously and proudly proclaimed that he drives a BEV “to save America,” such altruism is not universal, especially when it comes at a premium.

Also, manufacturers are still rolling out BEVs that are “less than” – forcing compromises that some members of the car-buying public may feel are simply not worth it. Suffice it to say, finding the balance between actual driving needs and current BEV capabilities will be key to widespread adoption of BEVs.

Among the questions that must be answered satisfactorily for the public to broadly accept BEVs into their lives:

1. What do I have to do differently to drive a BEV?

Tesla aside, many of the current generation of BEVs have required compromises that aren’t always palatable to a public that is well served with current products. BEVs tend to have unusual, polarizing styling cues, and are small in stature, compromising passenger and cargo space for the sake of efficiency. Additionally, fully committing to a BEV means that drivers will have to refine their pedal-stomping, race-from-red driving habits to optimize the range on a charge.

Manufacturers seem to be heeding the public’s desire for BEVs that blend in. Hyundai’s Kona crossover SUV and the remodeled Nissan Leaf have been styled in the ilk of more traditional offerings – and have been met with accolades as a result.

 

2. Where do I plug in?

Today, there are more than 67,000 charging stations across the United States, with more opening daily. But there are 168,000 gas stations, which means drivers will likely have to cover significant ground to find a place to “charge up.” Though consumers will get the best charge via a dedicated, proprietary charging connection, many of today’s BEVs can be charged in a pinch (albeit slowly) through typical household current.

Of course, you can install a fast charger in your own garage; the national average cost for installation is around $1,200. For many, charging at home is one of the greatest benefits of having a BEV.

 

3. How far can I drive on a full charge?

Though this has improved significantly, there’s still a way to go. GM’s first fully electrified vehicles, which hit roadways in the early 1990s, needed a charge every 70 to 80 miles – barely enough for the daily in-town grind, and certainly too stingy for road warriors. Today’s mass market BEVs can cover about 200 miles between plug-ins, and some newer products are even promising 400 miles.

 

4. I can fill my gas tank in three minutes – why can’t I charge as fast?

Charging technologies, though improved, still haven’t leveled the playing field with fossil-fueled counterparts. The typical home charger can only muster a full charge every 6-8 hours; and fast chargers in the wild can cut that to just a couple of hours (Tesla’s Supercharger technology cuts the full-charging time to just 30 minutes). New battery-charging technologies are being tested that will reduce the charging time to 15 minutes, but it’s important to note that both battery and charging infrastructure will have to be modified to deliver the benefits.

 

5. Will prices come down?

This is a function of several factors – improved battery technology as well as government rebates and tax credits certainly will help, but consumer adoption will have the biggest downward pressure on price. It’s truly a chicken-and-egg paradigm – volume will ultimately drive discounts. Consider that the major manufacturers are spinning out millions of gas-powered cars each year – if BEV sales comprise only a small percentage of that total, you have to pass along more of the manufacturing and research charges to the consumer.

That said, more than half of US BEV sales in 2018 were racked up by one car model – the Tesla Model 3. This car managed to double the market while only being out for half the year. What drove its sales success was its increased range – up to 300 miles on a charge – for a price, around $40,000, that was in the ballpark for most luxury sedan consumers.

Are you looking to better understand the wants and needs of the potential BEV-buying public? We are continuing to do innovation research in electrification consumer wants, and always happy to help. Reach out to me, Artem Violety, and I will be happy to discuss any questions you may have and how Escalent can help you reach your stakeholders.

 

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Artem Violety
Vice President, Automotive & Mobility

Artem is a consummate researcher with deep passion for the automotive industry. He has managed hundreds of research projects for global OEMs and suppliers. Artem’s experience covers the entire automotive lifecycle with various methodologies including online surveys, in-person clinics, customer interviews, and advanced analytics/modeling. Prior to joining Escalent in 2016, Artem was with Consumer Insights at Toyota for 5 years. Before that, he was a Management Consultant with McKinsey and a researcher at JD Power. Artem received an MBA from the University of Michigan’s Ross School of Business in Ann Arbor and an undergraduate degree in Cognitive Science from University of California, Berkeley.