United States:
Electric Vehicles Continue To Roll Off The Assembly Line Even With Speedbumps Along The Way
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As consumers continue to display a growing appetite for the
electric vehicle compared to their fossil fuel counterparts,
manufacturers are starting to take notice. In 2021 alone, major
OEMs and new-market entrants are expected to the launch over 22 new
EV models around the globe. These new models are coming as either
standalone platforms under new models or as a upgrades within
existing model line-ups. But, with new models being announced every
few weeks, roadblocks to wider adoption continue to persist.
We noted in our February
10th article, The Shift to Electric
Vehicles is Only Just Starting to Accelerate, consumers are
starting to see full electrification commitments by major OEMs and
new market participants at an ever increasing rate,
including many committing to full electrification within the
decade. While the EV technologies underlying most new models are
relatively similar in nature, the availability of EV tax credits
for purchasers and infrastructure limitation remain two key
bottlenecks in purchaser decision making and eventual electric
vehicle adoption.
Since 2010, consumers who purchase an electric vehicle could
qualify for a tax credit of $7,500 depending on the type of
electric vehicle they purchased. At the time this credit was put
into place, electric vehicle adoption in America was still in its
infancy and models were limited in their availability as only a few
manufacturers offered them for sale. The tax credit carried with it
a cap of 200,000 vehicles from each manufacturer. Once a
manufacture sold its 200,001 electric vehicles, the tax credit
dropped to zero in a year. As a result, OEMs, such as General
Motors and Tesla, who have already sold over 200,000 qualifying
vehicles are no longer to leverage the tax credit as a way to
offset the higher cost of many of their electric vehicle models.
Recognizing the disparity caused by an effective penalty on those
who supported electrification early on, compared to those just now
entering the market, the Biden Administration and members of
Congressional leadership are looking at ways to expand or otherwise
modify the cap above the 200,000 thresholds and level the playing
field for existing and new manufacturers.
Even with the tax credit being modified, as we noted in our
prior article, the infrastructure needed to support the shift from
gas stations to charging stations will continue to be a roadblock
along the way to main-stream electrification. Although consumers
may be willing to turn in the pump for a plug, their ability to
find adequate charging stations let alone the time constraints of
charging a battery will likely remain roadblocks for the short-term
rollout of electric vehicles. Further, access to a robust
power-grid infrastructure, parking spots with charging capacities,
home charging solutions, and other options to recharge one’s
electric vehicles will continue to be hot button issues as OEMs
implement their fully electrified platforms.
Unlike communities in Europe, who can travel locally in their
car, but can rely on mass transit like trains for inter- and
intra-city travel, the United States is highly dependent on highway
infrastructure. As a result, personal vehicles are a necessary
mechanism for many Americans to move around. In the electric
vehicle dominated world, with existing battery and charging
technologies, this means ordinary road trips have to account for
greater travel times due to charging timelines and incomplete
charging infrastructure. As a recent Wall Street Journal report
uncovered, a journey from Tampa, FL to Fort Carson, CO, which
normally takes 30 hours via gasoline powered vehicle, will take 58
hours in electric vehicles when accounting for charging times.
While charging time compared to fueling time is often a culprit of
the added timeline, broken chargers, slower than advertised
charging rates, and occupied chargers are also often to blame.
While growing pains in the electric vehicle infrastructure are
expected to continue for the short term, a critical mass of
reliable and an abundance charging infrastructure will be necessary
for setting range anxiety at ease for many Americans.
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