The November 2023 EV News Recap highlighted that the electric vehicle market faces challenges in achieving widespread adoption, with high price tags and pricing discrepancies between EVs and ICE vehicles being the primary obstacles. Despite federal and state incentives, demand for EVs has been slower than anticipated, causing automakers to temper their plans for electric vehicles. However, the upcoming $7,500 Clean Vehicle Credit, set to take effect in January 2024, could significantly simplify the EV purchase process and drive mass adoption. Furthermore, automakers are adapting to shifting customer dynamics by offering more paid software options in their next-generation vehicles. In addition, Tesla’s NACS is gaining widespread support, allowing owners of non-Tesla electric vehicles to access Tesla’s SuperCharger network, which could further boost the adoption of electric vehicles.
The High Price Tag of Electric Vehicles is Slowing Down Sales, Making Affordability a Key Factor for Mass Adoption
The electric vehicle market has hit a bump in the road, with sales slowing down in recent months. Tim Levin of Business Insider has noted that while many people are keen to make the switch to EVs, the high price tag is proving to be a major barrier. “Enthusiasm only gets you so far when snapping up a new EV costs over $50,000 on average,” Levin wrote. Most models are priced at $50,000 or above, leaving few options for those on a budget. The Chevrolet Volt and a few other low-cost EVs are among the few choices available. As we move beyond the early adopter phase of the EV revolution, affordability will become increasingly important for driving mass adoption of these vehicles.
Consolidation behind Tesla’s North American Charging Standard
In the United States, there has been further consolidation behind Tesla’s North American Charging Standard (NACS). Almost all of the electric vehicle (EV) manufacturers have joined this standard, which allows their vehicles to access Tesla’s Supercharger network. Only two major EV manufacturers are not yet on board. To learn more about what brands have adopted NACS and the timing of their transition check out our NACS article.
New $7,500 Clean Vehicle Credit to Simplify EV Purchase Process
The upcoming $7,500 Clean Vehicle Credit, set to take effect in January 2024, could have a substantial impact on when and why consumers choose to buy an electric vehicle. The new system will allow eligible buyers to transfer the tax credit directly to the dealer as a down payment at the point of sale, simplifying the process and offering a tangible benefit to EV enthusiasts. Pricing discrepancies between EV and ICE vehicles in the compact SUV segment remain a potential hurdle for EV adoption. Cost-conscious shoppers often cross-shop mass-market EVs against premium ICE vehicles. As the industry continues to evolve, dealerships and OEMs will need to adapt. They must adjust to these shifting dynamics to meet the needs of potential EV buyers effectively.
Audi To Offer More Paid Software Options In Next-Gen Vehicles
According to the German car company’s board rep for technical development, Audi’s next-generation vehicles will offer more paid software options, according to Oliver Hoffmann. The approach follows BMW’s U-turn on its heated seat subscription program, which was abandoned after public outrage. Audi offers over-the-air features through its myAudi app, such as automated parking or lock-unlock light animations. These are micro-transactions intended to generate more revenue from customers. Hoffmann claimed that the move towards on-demand features is a response to customer demand and marks a significant step forward. However, some car owners are pushing back, with some jailbreaking their cars to unlock features for free.
Challenges Facing Widespread Adoption of Electric Vehicles
The widespread adoption of electric vehicles has proven to be a challenge as car manufacturers face a group of more cautious and price-sensitive consumers. Early adopters have already embraced EVs, while the rest of the market requires more persuasion.
Although there are federal and state incentives designed to encourage EV sales, they are frequently difficult to navigate, and most people are unaware of them. Automakers have had to temper their bullish plans for EVs due to slower demand from customers. For example, Ford has halted $12 billion in new EV factory spending, while GM has pushed back the production launches of its range of electric trucks and SUVs, such as the Chevy Silverado and Equinox EVs, as well as the GMC Sierra Denali EV.
The State of EVs: Abandoned Plans, Falling Profit Margins, and Manufacturing Shifts
Furthermore, Honda and GM have abandoned their plans to jointly produce a range of affordable EVs, and Tesla’s profit margins have fallen to a four-year low in Q3 2021. Volkswagen has also announced that it will no longer manufacture two of its flagship EVs, the ID.3 and Cupra’s Born, citing subsidies and competition from China. US automakers are largely to blame for assuming that current demand patterns could be applied to EVs, which is why most of them prioritized big trucks and SUVs right out of the gate rather than small, utilitarian cars.
Challenges for Plug-In Trucks with Heavy Batteries
However, producing plug-in trucks that require batteries as heavy as a Honda Civic is not sustainable if the supply chain is not healthy and mature. The supply chain will find it very difficult to keep up with the pace, particularly as US lawmakers attempt to redirect battery material production away from China. In today’s political climate in the United States, EVs have become a political issue, and auto companies are grappling with the challenges that arise when a significant portion of the population refuses to purchase their products based on ideology.
EV Adoption: A Political Divide
A working paper from UC Berkeley suggests that EV adoption is primarily a blue state phenomenon, with over half of new EV registrations occurring in the top 10% most Democratic counties from 2012-2022. President Joe Biden has made electrification a significant part of his administration’s efforts to combat climate change, and Republicans are now opposing these efforts despite their relative political benefits.
Solid-State Batteries: A Promising Technology for the Future of EVs
The development of solid-state batteries holds great potential for the future of electric vehicles. Solid-state batteries use a solid electrolyte instead of a liquid one, improving safety and potentially offering twice the charge or half the weight. Lithium-metal anodes have around ten times the specific capacity of graphite, meaning they store more energy in a smaller space, which could improve the power-to-weight ratio of EVs. However, the challenges associated with solid-state batteries, such as material cracks, flaws, and voids, dendrite formation, and the resistive layer issue, make it more difficult to produce them in mass quantities cost-effectively. Despite the challenges, solid-state batteries remain a promising technology for the future of EVs.
Jeep Wrangler to go all-electric
The Jeep Wrangler is going to go all-electric. Jeep CEO Christian Meunier recently spoke with Auto Express about how electrification will improve the Wrangler’s capabilities, stating that it gives the vehicle more torque and makes it smoother and more precise. Meunier also mentioned that the new Wrangler EV will be able to achieve a Trail Rating of 12, making it the most capable Jeep yet. However, fans of the iconic off-roader will have to wait until at least 2027 for the Wrangler EV’s release, as Jeep plans to launch several other electric models in the coming years.
Tesla Releases Data on How Long EV Batteries Can Last
According to Jeremiah Budin from The Cool Down, Tesla has released data on the battery life of its Model S and Model X, showing that they only degrade 12% after 200,000 miles. This is good news for the electric vehicle (EV) market, which has faced concerns over battery life and the environmental impact of lithium-ion batteries. While mining for materials such as lithium, cobalt, and nickel has a significant negative impact, EVs still have a much lower environmental impact than traditional gas-powered cars.
Challenges and Solutions for Electric Vehicle Repair and Insurance
In a recent report by WIRED, there is widespread anxiety over dinged-up batteries in electric vehicles, which could compromise the safety of the car, causing electric shocks, fires, and explosions. The lack of understanding and expertise among auto repair shops on how to assess and repair batteries is a significant challenge, with some insurers even writing off entire cars due to minor physical damage to battery casings. However, EV fires remain rare, and the frequency of total write-offs is not exceeding those for high-end internal combustion engine vehicles. As more EVs hit the roads, the EV insurance market is still unstable, and the lack of clear instructions from vehicle manufacturers on repair procedures is swelling overall insurance costs.
Experts suggest design changes to reduce high cost of EV repairs
According to experts, the high cost of electric vehicle repair could be reduced by simple design changes, such as protective shielding below batteries. Manufacturers are often reluctant to supply replacement parts for battery systems, meaning mechanics need the necessary components to repair EVs following accidents. However, some manufacturers, including BMW, are praised for their openness. Meanwhile, a UK-based start-up, Second Life EV Batteries, is gathering unwanted EV batteries and selling them on to hobbyists and makers for use in energy storage systems.
In conclusion, of our November 2023 EV news recap, while the electric vehicle market still faces challenges, positive developments are on the horizon, such as the upcoming Clean Vehicle Credit and automakers adapting to changing customer preferences. If you are considering purchasing an EV, it is important to do your research and find the right car that fits your needs. Our needs-based search tool can help you navigate the process and find the perfect EV for you. Don’t hesitate to reach out for assistance, as we are always here to help you make an informed decision.