Overcoming EV Hurdles: Charging Stations and Lower Prices
Electric vehicle technology is poised to replace the internal combustion engine, but as with all examples of technology displacement and diffusion, several conditions must be met before people abandon familiar technologies in favor of new technologies: The new technology needs to be: superior to the old; the new technology It should be cheaper or at least less expensive than the old technology, and finally; the new technology must be at least as convenient as the old technology. A century-old technology like the internal combustion engine can be replaced, but a century-old infrastructure and investment cannot easily be replaced. One of the most common sights on American roads is a gas station. In the past, they were connected to auto repair shops, and today they are often connected to convenience grocery stores, where you can refuel your car, and you can also refuel yourself. Consumers tell us that one of the concerns they have about electric vehicles is known as “range anxiety”: the fear that you might be stuck somewhere without a place to charge your vehicle.
The good news is that many businesses see an opportunity in vehicle charging. While a customer’s vehicle is charging, that customer can sell them other things. Last week, Walmart, the largest retailer in the United States, announced its electric vehicle charging program, once again demonstrating its environmental leadership.according to Vishal KapadiaSenior Vice President, Energy Transition, Walmart:
“By 2030, we intend to build our own network of fast-charging electric vehicles at thousands of Walmart and Sam’s Club stores from coast to coast. This will add to the nearly 1,300 EVs we already offer at more than 280 U.S. facilities Complementary to fast charging stations. With our store or club located within 10 miles of approximately 90 percent of Americans, we are uniquely positioned to provide convenient charging options that will make a difference whether people live in rural, suburban, or urban areas Facilitates EV ownership. Our goal is to meet the needs of our customers and members where they live, and to pave the way for those who drive across the country… Plus, our chargers work with our supercenters, neighborhood markets, and Sam’s Clubs Being located on-site together, we can offer our customers and members the convenience of being able to pick up essentials for the family or grab a bite to eat while charging. In line with our purpose, our goal is to offer daily low-cost charging – helping reduce shipping costs…”
Walmart’s leadership offers other retailers an obvious business model: use charging stations to lure customers. While no other retailer has Walmart’s size or capital base, the investment in charging stations should be easily recouped. My guess is that in the US, most charging will take place in suburban driveways and garages, followed by retail outlets modeled after Walmart. But the rapid adoption of electric vehicles is a key element of national climate policy, and not everyone has a driveway or lives near a Walmart. In New York City (where a Walmart was never allowed to be built), many people live in private homes, but many of them are row homes with no community driveways, allowing cars into their backyards. While many New York homes have driveways and even garages, about 70 percent of New Yorkers live in apartment buildings. Although many New Yorkers do not own cars, many do own cars and need to use public or commercial charging stations. The Biden administration has anticipated this and has begun a funding program to enable states, tribes and localities to build public charging stations.according to a U.S. Department of Transportation Press Release From 15 February 2023:
“Today, the Biden-Harris Administration announced its latest action to advance the President’s vision to build 500,000 electric vehicle chargers by 2030 and provide a convenient, reliable American-made electric vehicle (EV) charging network. These Next steps – Publish minimum standards for federally funded EV infrastructure, finalize EV charging facility Build America, Buy America implementation plan, and announce that cities, towns, tribes, and states will soon be able to apply for the first round $2.50 Funding B Competitive grants to build electric vehicle charging stations in communities across the country – will electrify the great American road trip.”
The closest analogy to this is the rest stops seen along the interstate. These are subsidized by federal funds and are highly appreciated by the traveling public. Additionally, some public charging stations will be built in municipal parking lots, and some may even be located on city streets. Driven by the Biden administration, tesla Agreed to open 7,500 charging stations to non-Tesla electric vehicles by the end of 2024. The goal of the move is to raise awareness of the charging stations so that potential consumers can see that charging is as easy and convenient as filling up a gas tank.
The business opportunities presented by the transition to electric vehicles are enormous, as are the challenges of attracting capital and manufacturing capacity to build new infrastructure. A recent study by PwC points to the scale of the transformation needed.according to PricewaterhouseCoopers:
“The electric vehicle charging market may – and will need – grow nearly tenfold by 2030 to meet the charging needs of an estimated 27 million electric vehicles. Building such a National Charging Network Potentially challenging and requiring numerous stakeholders and investments, this will be a necessary step in shaping and determining the viability of the future of all-electric vehicle transportation in the United States. Some highlights of our analysis include:
- The number of charging points in the US is expected to grow from about 4 million today to an estimated 35 million by 2030.
- The electric vehicle supply equipment (EVSE) market is likely to grow at a CAGR of 15% from the current $7 billion to $100 billion by 2040.
- According to an analysis by PwC, the number of electric vehicles in the US is expected to reach 27 million by 2030 and 92 million by 2040.
- The EV charging segment at work and on the move is likely to grow the fastest through 2030. ”
Regulatory structures, especially in states like California and New York, are poised to accelerate the transition to electric vehicles, as are multibillion-dollar capital commitments by major U.S. automakers. The technology to build and maintain an electric vehicle is superior to that of an internal combustion engine. There are fewer moving parts, and new electric vehicle factories are being built, using the latest in automation and artificial intelligence. One concern that concerns me and many others is the urgency of ensuring that the workers now engaged in building and maintaining today’s internal combustion engine vehicles are not discarded because many workers are being overlooked in other technological and workforce transitions. The new green economy will provide substantial job opportunities, and it is critical to include job training and placement services in public policies designed to stimulate the transition to a green economy.
In addition to ensuring fair treatment of labor, which is a vital and often overlooked piece of the transition puzzle, I believe the transition to electric vehicles is well underway. I see progress on many hurdles: not least the price of charging stations and electric cars.according to Peter Grieve of money magazine:
“The average price of an electric vehicle fell 5.4 percent to $58,725 in January from $62,088 in December, according to new data. Report From car valuation firm Kelley Blue Book. The average selling price for a new Tesla in January was $59,648, down from $65,080 a month earlier, a drop of $5,432, or 8.4%.The lower sales prices were largely due to Tesla’s Jan. 13 price cuts, which were aimed at boosting sales and making more cars eligible for New electric vehicle tax credit Up to $7,500. Since then, Tesla has adjusted prices several times. Currently, the Model 3 sedan starts at $42,990, down from $46,990 before the price cut, while the Model Y SUV starts at $54,990, down from $65,990 before the cut. “
Electric vehicles appeal to consumers because they are well designed and attractive. Soon they will compete on price with internal combustion engine cars. Plus, they have lower maintenance and fuel costs than conventional vehicles. However, it can be difficult to switch from technology that many of us are used to and that serve our needs. We should expect this transition to take a long time to complete. The momentum behind EV adoption is clear. We will see more and more of them on the road, but on the same road, the transition will be bumpy.
