Electric Dreams Deferred: What’s Behind the Slow Shift to Battery Electric Vehicles?
The impending switch to battery electric vehicles (BEVs) may not be living up to the hype.
Major manufacturers like Audi, BMW, FORD, GM, Mercedes and Toyota have either given up on their all-electric dreams, or have scaled back efforts significantly. Even Aston Martin has decided to delay launching their first BEV. Aston’s executive chairman, Lawrence Stroll noted consumer demand wasn’t in place and drivers still want “the sports car smell, feel, and noise” of an internal combustion engine. (Yes! Yes we do.)
My intention with this post is less about information and more about me ‘just thinking out loud’. What does all this mean for the future of the automotive industry? Is this simply the ‘dark before the dawn’? Are we at an inflection point where we’ve hit the dip and it’s all ‘J-curve’ up and to the right for BEVs over the next decade? How does BEV adoption compare to technology adoption in general?
So many questions.
Toyota’s Chairman, Aiko Toyoda, recently claimed BEV adoption would peak at around 30%. He also noted that with nearly a billion people without electricity, limiting their choices to expensive BEVs wasn’t the answer. This call by some demanding all electric cars post-2030 reminds me of Rob Henderson’s idea of ‘Luxury Beliefs’.
I’ve long suspected ‘range anxiety’ was a critical impediment in the wide-spread adoption of BEVs, or “glorified golf carts” as I like to call them. That, and the lack of a charging infrastructure in the United States. My own bias aside, Consumer Reports surveys have shown BEVs are significantly less reliable than their internal combustible engine counterparts. Giving credence to the reliability issue is the fact that Hertz is selling off about 20,000 electric vehicles due to the high costs from crashes and other minor incidents. The Hertz board even put the kibosh on the planned acquisition of 100,000 Teslas and another 35,000 Polestar electric vehicles.
Despite the gloom and doom, analysts claim BEVs are on track to hit 9% of all cars sold in the United States in 2024. Some analysts predict the figure could even be as high as 13% — about 1.9 million vehicles. Bloomberg predicts over 16.7 million EVs will be sold globally in 2024, yet Tesla recently warned investors of “notably lower” sales growth and has temporarily cut prices on some models.
Aston’s executive chairman noted, “As far as the BEV is concerned, we believe consumer demand was just not at the pace of all the analysts and politicians.”. And Toyoda, grandson of the company’s founder, believes once BEVs reach 30% of the market, hybrids, hydrogen, and internal combustion will make up the other 70%.
What do you think?
