The burning need for EV adoption

January 2020 was the hottest month in recorded history, marking the 421st consecutive month with higher than average global temperatures, according the National Oceanic and Atmospheric Administration. Those startling statistics may hint at the dire consequences of climate change, but its effects are becoming painfully evident due to recurring natural disasters like the devastating Australian bushfires. Reducing carbon emissions and dependence on fossil fuels is imperative as we enter a new decade, offering an opportunity to electric vehicle manufacturers.

Unfortunately, there is still a lack of familiarity with alternative powertrains. According to the Ipsos Mobility Navigator study, only 2 out of 5 consumers are very familiar with hybrid engines (HEV), and a mere third know a fair amount about plug-in hybrid (PHEV) and battery electric vehicles (BEV).

Charging

Education will be paramount in increasing the adoption of electrified vehicles. First, it’s important that the public understand the differences between the various options, along with the benefits they provide. HEVs do not require any real changes to consumer behavior – they just provide increased fuel efficiency with small power concessions. The primary considerations for consumers purchasing a PHEV or BEV are the ability to charge at home and a long pure electric range, so these concerns must be addressed.

Based on results from the Ipsos SMX Syndicated Community, over 90% of people park in their garage, carport, or driveway, so most should be ideal candidates to charge at home. Consumers must be shown how easy it can be to change their fueling behavior. Equate charging a vehicle to charging a phone – it’s as simple as plugging a cord in. There’s no longer a reason for frequent visits to gas stations where one may have to endure inclement weather. Drivers can start each day fully charged and do so from the comfort of their own home.

Range

In contrast, range expectations must be muted. Most believe PHEV and BEV vehicles should both have ranges of more than 200 miles. This serves as an example of how consumers don’t understand how the two differ. It doesn’t make sense for a PHEV to have such a large pure electric range because they can also run on gasoline. PHEVs can provide the best of both worlds: enough pure electric range for daily commuting, without range anxiety during longer road trips.

Americans commute an average of 35 miles round-trip daily, so considering the typical daily driving habits of the average American, a 200+ mile range is not necessary for BEVs either. Nevertheless, there are several BEVs with ranges in excess of 200 miles on the market, and ranges continue to increase as battery technology improves.

While road tripping with BEV may require more planning; fast charging to 80% of capacity can take place in about a half hour, which how long a quick meal and restroom break often takes. Furthermore, most households own multiple vehicles, so replacing one with a BEV would not preclude them from using cars with internal combustion engines for longer distances.

Incentives

Affordability is vital for the viability of any new technology, so federal and state incentives are key to making EVs competitive in their infancy, and sustained support is crucial. The fossil fuel industry has long received government subsidies, and fledgling EVs must have the same advantages. Phasing out the federal EV tax credit is tremendously detrimental, so a concerted effort to extend it is critical. Consumers would rather receive incentives before filing their tax returns, preferably at the dealership. The savings could also help with the small upfront cost of a Level 2 charger.

New Vehicle Launches

To date, Tesla is the leading BEV manufacturer, with omnipresent vehicles and the largest market capitalization of any automaker. Rival startup, Rivian, has attracted investments from a few prominent companies, including Ford, Amazon, and Cox Automotive. Ipsos asked consumers to evaluate two upcoming BEV SUVs, the Tesla Model Y and the Rivian R1S, using our proven Ipsos Vantis database to assess their probable market performance. The Vantis database identifies each concept tested as a unique Archetype based on its key performance indicators.

The results of our study show the Model Y Archetype is a “winner”. It is poised for success due to strong liking, need fulfillment, and purchase intent. Robust sales of the Model 3 on which it is based, and consumer preference for SUVs will likely contribute to a positive outcome. There are only a few affordable BEV SUVs currently available for sale. The base RWD model with a 230-mile range is the most popular trim as its reported $39,000 MSRP puts it within reach of many consumers. That’s only a few thousand dollars more than the median new vehicle purchase price.

Prospects for the R1S are up in the air. It has an “undistinguished” Archetype and had mostly average performance across the Vantis KPIs. Rivian is an unestablished brand that has yet to produce a vehicle, and a starting price of $72,500 will be a barrier to purchase for the majority of consumers. Its rugged styling may be polarizing, and its positioning may not resonate as BEVs are not synonymous with off-road capability.

The Model Y and R1S should both be available for delivery later this year, and many will be watching their sales numbers intently as a barometer for EV acceptance. Charging infrastructure is growing at a rapid pace, and EV options are becoming more plentiful, with commitment from OEMs set to launch numerous new models in the next few years (such as Audi, Ford, GM, Mercedes-Benz, Porsche, and Volkswagen). In addition, new players including Byton, Fisker, Lucid, and perhaps even Sony are also entering the fray. It’s a decisive time for the automotive industry, and for our planet, as we move to cleaner energy. Is your brand ready?