The next few decades will see electric vehicles (“EVs”) replace fossil-fuel-powered cars on the world’s roads. Several countries have pledged to adopt alternative energy vehicles in a bid to reduce their reliance on fossil fuels and reduce their greenhouse gas emissions, and zero-emission electric cars will be crucial to achieving this goal. However, EVs still make up a very small percentage of the vehicles on the world’s roads.
A Pew Research survey found that nearly two-thirds of Americans found electric vehicles to be too expensive and one-third had reliability concerns. In the United Kingdom, a similar survey found that 37% of Britons did not purchase electric vehicles due to a shortage of public fast charging stations, 35% were held back by range anxiety while 33% were concerned about the cost.
Let’s look at the four reasons that have held back EV adoption across the board and how they can be overcome.
Cost. Electric cars are undoubtedly expensive, with most EV models costing much more than their average petrol and diesel-powered counterparts. As the cost of manufacturing electric vehicles reduces and as battery prices drop, electric vehicle prices are bound to decrease as well. Additionally, since these vehicles are cheaper to fuel and maintain, drivers will see impressive savings over a vehicle’s lifetime. Leasing an EV’s battery rather than buying it outright will also reduce purchase costs and, depending on their region, drivers can take advantage of rebates and subsidies.
Insufficient charging infrastructure. There are 168,000 gas stations in the United States, and most drivers don’t even think about scouting for a station before they hit the road. On the other hand, there are nearly 42,000 public chargers and 17,000 fast chargers, most of them in urban areas. China has 800,000 public chargers and 300,000 fast chargers while Europe has nearly 285,500 public chargers and 38,000 fast chargers. All these territories will have to significantly increase their EV charging infrastructure to boost EV adoption.
A global chip shortage has been a major thorn in the auto industry’s side. The coronavirus pandemic essentially shut down commerce for months, and now that the world is opening up, chip makers have been unable to meet the surging demand for chips. According to analysts, the chip shortage may persist into 2022, and this will have an impact on all types of vehicles, including EVs.
Battery safety fears have also kept drivers from purchasing EVs, with 31% of Chinese drivers saying they were concerned about the possibility of battery fires. However, Ola Willstrand, project manager at Swedish state research institute Rise, says electric vehicle batteries are quite safe, and they may even present an even lower risk of fire compared to conventional internal combustion engine vehicles.
On the bright side, electric car sales are still rising, even with all these factors holding the industry back. Increased governments spending on electric vehicle charging infrastructure and reduced production costs will soon make EVs as affordable as conventional cars.
Furthermore, as more players such as Net Element (NASDAQ: NETE) join the sector, motorists will see more options, which is likely to drive uptake as each person will have a chance to choose models best suited to their needs.
NOTE TO INVESTORS: The latest news and updates relating to Net Element (NASDAQ: NETE) are available in the company’s newsroom at http://ibn.fm/NETE
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