Is the electric vehicles (EV) bubble about to burst? With so many car manufacturers, governments, and others invested in electrification and EV charging infrastructure, it’s unlikely. But with Tesla recently forecasting a sharp slowdown in its sales this year—just the latest in a line of car companies sounding similar warnings—alarm bells should be ringing.
Tesla still managed to shift a record 1.8 million cars in 2023, up 40% from 2022, but at what cost? It was widely reported that the car firm reduced prices several times last year in a bid to drive up sales and outpace the competition, which is increasingly coming from China. Elon Musk’s calls for trade barriers to be put in place as China’s BYD overtook Tesla as the world’s best-selling electric car manufacturer for the first time at the end of last year is another red flag.
While Tesla is a bellwether for success or failure in the market, there is a deeper malaise that suggests that all is not well in the state of EVs. Despite growing demand for EVs and government regulation both in the US and across European markets to push electrification as part of the climate change agenda, consumer appetite for EVs is less robust than perhaps many would hope for.
Consumer interest is stalling
For many drivers, making the move to electric can seem overwhelming and confusing. It can also seem expensive with consumers questioning the premium pricing model that most car manufacturers have adopted. According to Escalent’s recent EVForward study of new car buyers in Europe (France, Germany, Italy, Spain and the UK) one in three respondents do not believe EVs deserve to command a premium. This is not welcome news to the automotive OEMs that have embarked on massive investment programmes and need a return on their investment.
Why would car buyers want to sign themselves up for a few years of pain and inconvenience now when they are not yet obliged to do so until 2035?
While purchase price is one of the top four factors that 41% of new car buyers consider most important when purchasing their next vehicle, it is not the only major consideration. The lack of improvement in EV charging infrastructure and range anxiety are making car buyers question whether EVs are the way forward. For EV manufacturers, this is a great opportunity to adapt their proposition so new car buyers can engage more meaningfully with brands’ wider offerings. OEMs could play the role of trusted advisor, helping customers to navigate concerns like in-home charging, and handholding them throughout the EV ownership experience.
EV infrastructure: a bump in the road
EV charging is a different proposition altogether and, to a large extent, out of the control of car makers. Across Europe, EV charging infrastructure is in different stages of development or stagnation, depending on how you look at it, while governments are tackling it in different ways.
In the UK, the government published its EV infrastructure strategy two years ago to set out its vision and action plan for the rollout of EV charging infrastructure, with a confirmed £1.6bn of public funding for charging points. In 2023 it then announced an additional £56m in public and industry funding for increasing EV charge points across the country, expanding the existing Local EV Infrastructure (LEVI) plans and effectively levelling up the charging infrastructure. The UK reality is that in 2023, there were twice as many EVs competing for public charging points as was the case in 2020—potentially the best way to navigate to ‘destination nowhere’.
The German government, on the other hand, appears to have ditched plans to establish a million charging points by 2030. According to Bloomberg, there are now around ten private charge points to every public one in Germany, with drivers preferring to charge at home. In France and Spain, however, at home charging is almost impossible for the majority of EV owners who do not have private parking and have to find charge points close to where they live.
It’s clear that requirements will differ in different countries, but the fact remains that whatever the scenario, drivers want a good experience. That means fast, reliable and inexpensive charging. When planning and investing in public charging infrastructure, governments and companies would do well to think about what consumers do want. Considering that most people want to get out of their vehicle when they are charging and are looking for more than just a coffee break, the opportunity for a better and broader service experience is clear.
Take the model of ‘EV charging corridors’ that is being developed in Europe. Last year, bp pulse, the electric charging division of bp, announced plans to build Europe’s first public charging corridor for medium- and heavy-duty electric trucks. Six e-truck charging stations with ultra-fast 300kW charge points have been launched along a 600km stretch of the Rhine-Alpine corridor across Germany, one of busiest road freight routes in Europe. Two additional locations are set to open to complete the corridor.
While this is aimed at heavy-duty freight transport, it offers an interesting insight into what is possible for ordinary EV drivers. Dedicated e-truck stops like this are likely to be complemented with other facilities, providing convenient places for drivers to take their mandatory rest breaks, have something to eat food or a take a hot shower. In the same way, public charging points for drivers could act as a ‘honeypot’ for retailers and service providers, as services stations do already, but with added facilities and benefits.
EV manufacturers and others will need to better communicate that EV infrastructure is maturing
Drivers can charge while getting on with other things rather than waiting in the car for the average 24 minutes that most EV owners currently stop for. It’s an opportunity to extend the ‘coffee, cake and break’ to be more productive, making charging stops less like wasted time. In the Escalent study, respondents pointed to facilities and services like WiFi, workspaces and comfortable seating as most desirable. Tesla owners in particular like to feel safe when charging, suggesting that on-site attendants could be a useful addition depending on where charging points are located.
Charging and service infrastructure is an integral part of the EV experience and a critical part of the decision-making process. More needs to be done to change EV car buyers’ perceptions and help reinvigorate the appetite for electric cars. EV manufacturers and others will need to better communicate that EV infrastructure is maturing.
If governments want car buyers to invest in EVs then they need to demonstrate investment too. To accelerate EV adoption, national, regional and local governments will need to keep pace with charging infrastructure needs—if not taking direct responsibility, then facilitating others to provide imaginative and reassuring solutions. Very few buyers in any consumer product category are willing to pay more for an inferior experience. Why would car buyers want to sign themselves up for a few years of pain and inconvenience now when they are not yet obliged to do so until 2035?
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Mark Carpenter is Managing Director of Escalent UK
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