Whether it’s longer range or rising fuel prices, dropping prices or the increasing number of vehicle choices, the battery-electric vehicle market is poised for growth, according to a series of new studies by J.D. Power.
Sales of all electrified vehicles have begun to grow sharply, Power officials noted during a webinar with the Automotive Press Association Tuesday. Plug-based products, including PHEVs and BEVs, have risen nearly 350% since 2017 — with all-electric models more than doubling during just the first half of this year. A variety of factors are spurring demand.
For one thing, “new products are coming out on a very frequent basis, and they’re really starting to resonate with consumers,” said Brent Gruber, Power’s senior director of global automotive.
A recent report by TheDetroitBureau.com forecast the number of BEVs available at U.S. dealers will quadruple by the end of 2022, from 13 today to more than 50.
More products, greater awareness
While new products, such as the Ford Mustang Mach-E and Volkswagen ID.4 ae starting to gain traction, Tesla remains the BEV segment’s 800-megawatt gorilla. In the premium segment, it holds an 82% market share, and its Models S and Y often outsell conventional luxury products like the BMW 7 Series and Mercedes-Benz S-Class.
But that’s not necessarily a bad thing, said Gruber, calling it “great for the industry because of the level of awareness Tesla has created with consumers (which helps) all manufacturers as new products come to market.” The broad array of new BEVs on tap during the next several years, such as the Ford F-150 Lightning will certainly “cause consumers to take notice,” Gruber added.
And he expects that interest will rise as some of the traditional obstacles to acceptance are dealt with. Longer and longer range BEVs are now coming to market. Tesla’s Model S can top 400 miles and the new Lucid Air Dream Range model is EPA-rated at 520. With the rare exception of new products like the 100-mile Mazda MX-30, most are topping 250 per charge and 300 is soon expected to be the norm.
Charging times have been falling, especially when plugged into public DC quick chargers. Some BEV models can go from 10% to 80% in barely 20 minutes. And while there are still large gaps, the national EV charging infrastructure is expected to grow rapidly. President Joe Biden wants to see 500,000 Level 2 chargers and quick chargers in place by 2030.
Narrowing the gap
BEVs still cost more, on average, than comparable vehicles using internal combustion engines. But the gap is beginning to narrow as those vehicles go into mass production and new battery technologies reduce production costs. Tesla and Volkswagen are both aiming to bring out models in the $25,000 range and, with federal tax incentives, one version of the current Nissan Leaf is now available at under $20,000.
The challenge, said Gruber, is getting more motorists to consider EVs. A Power study looking at whether buyers will consider battery-electric vehicles found that “for every 10 people in the market for a new vehicle … two are strongly considering electric vehicles and two people are strongly against them.” The industry has to win over the other six, he said.
But, there is “a lack of knowledge” about the features and benefits of electric vehicles, Gruber stressed. And that’s something both automakers and auto dealers will need to address.
They’ll need to do a better job of building awareness of all the new products coming to market, seemingly every other week. In just the last month, startups Rivian and Lucid launched production, and there’ll be new offerings from Audi, Volvo, GMC, Genesis, Hyundai and Polestar before the end of this year.
They’ll also need to do a better job talking up the benefits of BEVs, including the ability to charge up at home. And while electric vehicles may be more expensive up front, they can substantially lower energy and maintenance costs.
A considerable lack of knowledge
Two Power studies revealed that there is a considerable lack of public knowledge about EV charging. And that includes the potential availability of incentives from both government and utilities. In Michigan, for example, those buying or leasing a BEV and installing a home charger can get up to a $500 energy rebate if they also switch to time-of-use energy rates. That can further reduce operating costs by discounting power when a vehicle is charged off-peak.
Power’s new studies had plenty of positive to say about Tesla, which won several awards for its ownership experience and the quality of both its home and public chargers. But the automaker also was faulted as having some of the industry’s lowest quality in the annual J.D. Power Initial Quality Study.
Right now, that seems to make little difference, said Gruber, especially among “those Tesla fanatics” driving its sales to record levels. But he also cautioned that, as other new products come to market with extended range, high performance and appealing onboard technologies, “that’s certainly going to hurt them. It will cut into Tesla’s advantage.”
Unique features can build a foundation
Yet another Power study found that EV owners really appreciate the features their vehicles offer, such as One-Pedal driving. It allows the driver to simply modulate the throttle rather than having to jump on and off the brakes under most driving conditions. The ability to control things through a remote smartphone app, such as when an EV starts to charge, is another highly rated feature, added Kristin Kolodge, who oversees research on automotive man/machine interface technology.
Such features, she said, “provide a foundation” for current electric vehicles owners to return for another BEV when it’s time to trade in.