It is true that it is no longer news to spot an electric vehicle (“EV”) cruising down the street or highway in the U.S., but are Americans buying as many EVs as they could? For comparison’s sake, statistics show that the number of EVs bought in Australia in 2019 tripled those that were bought the year before. In contrast, sales of electric vehicles in the U.S. dropped by 6.9% in 2019 when compared to the units sold the year before. Here is what could be wrong, and lessons on the way forward for the industry.
Obstacles to the Wider Adoption of EVs
Range anxiety. We humans thrive on having more control over different aspects of our lives, and nothing has turned people away from electric vehicles like the fear that the battery will run out of power while the motorist is “in the middle of nowhere.” This concern was particularly valid for the earliest models of electric vehicles, but EV giants like Tesla Inc. and others have been hard at work to deliver cars with ever-increasing range. It is therefore reasonable to assert that no one will be stuck on the road in the coming years simply because their EV has run out of power. Besides, charging systems for EVs have been evolving at a very fast pace, so you now need a couple of hours to fully charge your EV yet you needed to leave the vehicle charging overnight in the past.
High upfront purchase cost. The initially prohibitive purchase price of an EV deterred lots of would-be early adaptors from benefiting from this technology. For example, you needed to fork out about $64,300 to buy an EV in 2018. That is a sure recipe for sticker shock to most car shoppers, and it is no wonder that they looked elsewhere for their new ride. However, statistics indicate that EV prices dropped by at least 13.4% in 2019, and this trend is likely to continue over the coming years.
What New Zealand Can Teach Us
It is remarkable that EV sales have been doubling each year in New Zealand since 2016. This didn’t happen by accident; there was a deliberate policy by the government to promote the purchase and use of electric vehicles. Those measures included;
- Investing in a five-year campaign to promote the use of EVs (this campaign included ads on TV)
- Establishing a multi-sectorial group to encourage large organizations to switch to EVs
- Setting up a public system for recharging electric vehicles
- Offering tax incentives to buyers of EVs
- Facilitating the importation of high-quality used EVs (to give people an affordable entry point into using electric vehicles)
- Establishing systems to recycle old EV batteries (this is important for eco-conscious car buyers)
The undeniable statistics from New Zealand show that those interventions are bearing precious fruit. Maybe it’s now time for policymakers and legislators in the U.S. to pick vital lessons from “Kiwi” land. Highly responsive companies like Net Element (NASDAQ: NETE) would certainly see that as the right approach to take in order to speed up the uptake of EVs.
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