The Pure Electric Car Market and Horizon - Part I
in the United States and Global Markets
Our goal here at Drover, in essence, is to develop an environmentally-friendly rideshare service. To that end, we recognize the importance of the growing pure electric vehicle (EV or PEV) market around the world. As of December 2015, 1,260,000 pure EVs and plug-in hybrids (PHEVs) existed across the world, a number 100 times higher than the world's EV stock (population/amount of EVs in the world) in 2010 (1). Pure electric vehicles are at the core of our current and future business model. While in the short run, we will need to extend our platform to drivers of plug-in hybrid electric vehicles (PHEVS) and normal cars with high mpg ratings (30 mpg+), the pure EV is our darling. It is our sincerest intention to, as the electric vehicle industry grows and they gain market share, transition Drover to a fully electric, zero emission rideshare service. As I said, however, until that becomes a possibility, Drover will welcome drivers with PHEVs or high mpg normal cars.
So, let's talk pure electric vehicles. Though this is still a relatively nascent market, EVs have seen some exciting growth, particularly in certain cities/regions of the USA, Europe, China, and Japan. (Not to discount the participation of other countries in electric vehicle technology, the aforementioned markets are just the biggest right now). See Figure 1 below which shows the electric vehicle stock in the United States, China, Japan, and Europe (the combined sum of EV stock of nine European countries with the highest individual EV stocks). I made this chart, though the data comes from the IEA 2016 EV Outlook (2).
As you can see from Figure 1, China is the world leader in electric vehicle stock; China actually emerged as the world's primary electric vehicle market in 2015. Not far behind is the European EV stock -- which is extremely impressive because Europe is not one country, meaning that tons of individual countries within the European Union have all, on their own ambition, recognized the importance of supporting electric vehicle technology.
I was honestly surprised to see the USA's EV stock at the bottom of this list, however, I think this can be explained semi-easily. My estimation is that three main factors have limited the prevalence of electric vehicles in the United States compared to other global markets: 1) range/price ratio, 2) size, 3) relative lack of charging infrastructure.
Range/Price Ratio - As a general rule, the less expensive electric vehicles available right now have fairly limited ranges (significantly under 200 miles). Moreover, their batteries take several hours to charge at 220v or 30 mins(ish) at 440v -- both being appreciably longer than it takes to fill a tank of gas. Your electric vehicles with longer ranges, like range-extended "lower end" EVs, like the range extended Nissan Leaf, cost thousands of dollars more for relatively low mile-range jumps. On the other side of the spectrum, Tesla's can go over 300 miles on a single charge, but they have the price tag to match (starting at $66,000). And that is not to say that the "lower end" EVs are cheaper; the Nissan Leaf, for example, starts at $29,000.
In case you haven't noticed, most people in the US have to -- and sincerely enjoy -- driving considerable distances. I know many working adults who make 40min - 1.5 hour commutes from their home to work. Making that drive, then picking up the kids from school, driving them to soccer practice or dance, doing groceries, and finally going out for a date night with the wife/hubby implies a lot of miles traveled. To summarize, many American lifestyles exceed the capacity 130 miles a charge, especially when it is going to cost $30,000 and up. Global markets have honestly done a much better job of producing affordable electric cars with really impressive ranges. I will feature specific electric vehicle models from the USA and across the world in future posts in the next two months. Do not despair though! It is my prediction/hope that, as manufacturers like Tesla reduce range anxiety in consumers / battery technology improves, we will see affordable, high range electric vehicles in the US and abroad. Moreover, these vehicles will start aggressively taking over market share. Drover wants to be a part of this growth by highlighting electric vehicle technology within our service.
Size - With the exception of the Tesla Model X, pure electric vehicles tend to be 4-5 seaters and very small (compared to the Chevy Suburban, for example). Objectively speaking, this is not a bad thing, however, I think that American car culture is still a little hung up on having 'enough space' in a vehicle (not saying this in a negative sense, just pointing it out). By contrast -- painting in broad strokes -- I think that the car markets in Europe, China, and Japan have already adapted to smaller cars out of necessity from small roads (in the case of old European cities) or incredibly busy roads (as is the case in some European cities and many cities in China and Japan). Moreover, gas tends to be pretty cheap in America compared to global markets, which is another factor that has driven global markets to prefer smaller vehicles. Although perhaps not the most accurate cultural artifact, consider Fast and Furious 3: Tokyo Drift... Sean, an American street racer used to the American muscle cars of the 70s is blown away by the smaller Nissans and Toyotas that the Japanese street racing rings drove. I think that as electric car technology enhances, the United States car buyers will just naturally become more used to smaller cars, and I think that we will start seeing larger EVs with improved battery tech.
Lack of Charging Infrastructure - A few cities in the USA have done a phenomenal job of building charging stations throughout the city to provide easy and convenient access to electric car owners. However, this trend has still yet to go viral nationwide. Certain cities have hundreds of charging stations, but most have none still.
In reference to these three points, I hope you can see how right now, they contribute to the apparent disparity between the EV stock of the USA and other markets worldwide. However, I hope that you can also see how, with increased competition from upcoming and existing manufacturers/models and improved battery technology, they will become largely irrelevant. The same way successive models of internal-combustion-engine cars get better MPG every year they are released, EVs will continue to improve their range and hopefully size.
This look at the Pure Electric Car Market and Horizon in the USA and abroad will be continued in my next post...
Patrizio Murdocca is Chief Web Architect at Drover Rideshare, a student at Vanderbilt University, and President of Interfaced Ministries.
International Energy Agency Global EV Outlook 2016 --> (1), (2) https://www.iea.org/publications/freepublications/publication/Global_EV_Outlook_2016.pdf