We’re all aware of the importance of electrification and the significant carbon reduction achieved by zero-emission electric vehicles. This is why so much emphasis is placed on EVs by decision makers responsible for the cars we drive now and those that will be available to us in the future. But it’s important to ask…are they leading us in the right direction?
Increasing evidence says this is not the case, so those decision makers influencing our driving future should know this: If charting the electrified road ahead is based on presumptions and unrealistic expectations, well… you’re playing with fire and likely headed for trouble. We’re seeing that trouble manifest now, in a big way, as the hot electric vehicle market is being consumed by uncertainty.
So, a bit of sage advice. If you’re playing with fire and you find yourself ablaze, the first rule of thumb is to stop, drop, and roll to smother the flames consuming you. In other words, do something proactive to avoid a profoundly bad ending. Yet, metaphorically, the auto industry has largely avoided this exercise in avoiding self-immolation.
A case in point. While going all-in with electrification seemed a strategic move to auto execs in Dearborn, Ford got burned in its electric vehicle shift…badly. After consistently reporting billions of dollars in quarterly losses in its EV operations, Ford is now making a strategic pivot away from its major EV efforts while taking a reported $19.5 billion write-off in the process. The automaker is also ending its groundbreaking F-150 Lightning electric pickup program after the specter of continuing low sales volume hit home, with little expectation this battery electric pickup will ever sell in numbers required to turn a profit.
This is not the only example of an inherently high-profile EV program flaming out due to financial realities. More than a decade ago, in my editorial Facing Up to the Electric Car Challenge, I pointed out a similar outcome for another trailblazing electric vehicle, GM’s circa-1990s EV1: “The EV1 was so costly to build with such massive losses there was no business case for it to continue, and so it ended, as all other electric vehicle programs of the 1990s ended, for the same reason.”
Of course, that didn’t mean the end of electric vehicles. Rather, automakers did some serious reengineering and strategic planning that has brought us the impressive array of all-electric vehicles now available to consumers, with more to come. But the rebirth that saw a new generation of EVs hasn’t changed many of the fundamental challenges the electric vehicle field has historically faced.
Batteries remain expensive and pure EVs are still costly by nature, which in many cases means they are unprofitable. Yet, the push for battery electric vehicles has continued unabated, supported by the belief that consumer demand will grow, production numbers will significantly increase, and in the interim substantial federal, state, and regional subsidies will continue to flow, supporting a wholesale transition from combustion vehicles to ones powered by batteries.
All these assumptions are now being challenged. Other automakers like GM and Volvo are also backing away from their move toward a future of exclusively producing electric vehicles, choosing instead to build diverse electrified and internal combustion models that buyers in large numbers desire and can afford.
To be fair, all this isn’t entirely the auto industry’s fault. Legislators and environmental interests have aggressively pushed a battery electric vehicle agenda for years while ignoring some pretty obvious uncertainties. Inexplicably, they have done so without considering a bigger picture that embraces an array of other rational approaches and technologies that will contribute to the electric vehicle’s ultimate success.
Choosing how to respond to regulations and legislative agendas is an inherently crucial element in a company’s vision and future strategy. The most high-profile failure here has been the decision to go all-in on the electric agenda even in the face of obvious and major uncertainties, not the least of which is any real proof of sustained consumer demand for battery electric vehicles at prices higher than those of conventionally powered models. There is now a growing realization that consumers may well want something different than what legislators, regulators, and automakers have planned.
Generally, the vast number of car buyers want nothing more than to drive comfortable, safe, and efficient vehicles that fit their needs and those of their families at an affordable price. Sure, there are those who will pay a premium to drive pricier or more exclusive vehicles that speak to their sensibilities, image, or sense of self. But most car buyers must balance features and benefits with financial realities, and vehicle cost and monthly payments are almost always an important factor in a new vehicle purchase.
In the absence of significant federal subsidies – which is the case now – electric vehicle acquisition costs are higher and that has clearly changed the dynamics in this market.
With that realization, we’re now seeing a renewed consumer and automaker interest in other more affordable electrified models including hybrids and plug-in hybrids. Hybrids have a proven track record over the past 25 years so greater adoption is a given. Plug-in hybrid electric vehicles (PHEVs) have long represented the next step on the way to a fully electric vehicle and there will be many more of these coming to new car showrooms.
Then there’s a new twist in the form of extended range electric vehicles (EREVs), essentially more affordable EVs that use smaller battery packs paired with an onboard engine-generator. Reducing battery capacity can significantly lower costs without sacrificing driving range, since the engine-generator produces electricity to recharge the battery and power the vehicle’s drive motors. Automakers see EREVs as a winning strategy and are investing heavily to bring these models into their product lineups.
Of course, there will be many who disagree with any strategy that includes diverse forms of electrification rather than exclusively prioritizing battery electric vehicles. To those who cry “foul,” it’s worth reflecting on what others with a broad view of our transportation future have to say.
Toyota executive vice-president Yoichi Miyazaki frames the carbon challenge this way: “Carbon knows no borders and CO2 reduction is an issue that cannot wait,” adding that “we need to immediately start with what we can do.” In his view, spreading the use of electrified vehicles as quickly as possible and in significant numbers is the imperative, while being “very attentive to the needs of our customers.”
Essentially, that means getting significant numbers of electrified vehicles of all types into the hands of drivers worldwide, in a form that fits their needs. The answer might be a battery electric vehicle in some areas like California with a sizeable public charging network. But for others living in wide-open spaces with a scarcity of public chargers, a better fit might be a hybrid or plug-in hybrid.
Transportation is a huge contributor to carbon emissions and significant change is needed. That said, far too much emphasis has been placed on battery electric vehicles as an urgent and exclusive solution, prompting legislation and regulations with improbable timelines and outcomes.
This needs to be said: In the real world, it’s unrealistic that a wholesale switch to battery electric vehicles would accomplish needed carbon reduction goals on its own, or in a reasonable time frame. Consider that there are some 290 million light-duty vehicles now on our nation’s highways, and they tend to remain on the road about 12 years before being retired. Even if all new car sales were exclusively battery electric vehicles today, it would likely require 25 to 35 years to achieve an entirely battery-powered fleet.
There’s a lot to accomplish with electrification, increased efficiencies, downsizing, and vehicle lightweighting, plus the development of low-carbon, drop-in synthetic fuels for the millions of internal combustion vehicles already on our highways. A more realistic and diverse strategy like this is what’s needed. Imposing unattainable goals with questionable outcomes that force consumers to buy cars they may not want, and nudge automakers toward unnecessary risk, is simply not the answer.
It’s clear the rise of electric vehicles (EVs) has redefined the auto industry from a product point of view. But it has also forced automakers to innovate in how they connect with shoppers. The divergence in approaches between legacy automakers and startups like Tesla reveals a key insight: selling EVs isn't just about the product; it's about understanding fundamentally different customer bases.
In their early days, EVs were perceived simply as vehicles with a novel propulsion system –an evolution from hybrid technology to fully electric zero-emission powertrains. However, battery-electric pioneers like Tesla treated the EV as a new kind of vehicle to be sold in a new kind of way. By shedding legacy design constraints and conventional distribution schemes, the car was reimagined as a software-defined product. Tesla's over-the-air (OTA) updates, which enable real-time improvements and new feature rollouts, exemplify this approach.
The idea of OTA updates shifted the paradigm from static vehicles to dynamic platforms, much like smartphones. For early adopters, the concept of a car as a constantly evolving tech product resonated deeply. These customers are drawn to the novelty, the innovation, and the sense of participating in a beta-testing community. For better or worse, the Tesla model embraced the spirit of technological experimentation.
Startups like Tesla have excelled at capturing the early adopter market, but moving into the mainstream presents significant hurdles. One of the primary challenges is service accessibility. The direct-to-consumer model has some advantages but lacks the extensive service infrastructure that legacy automakers have built over decades. Traditional automakers, through their dealership networks, provide customers with nearby service centers, which startups struggle to match.
Another challenge is quality. Early Tesla models faced criticism for build quality issues, such as panel gaps and inconsistent paintwork. While early adopters might overlook such flaws in exchange for innovative features, mainstream buyers demand high standards of craftsmanship.
Legacy automakers face a different set of challenges as they enter the EV space. For these manufacturers, EVs represent not just a new propulsion option but a shift in how they must engage with customers. Unlike startups, legacy automakers are accustomed to serving a loyal customer base that values simplicity and convenience.
These companies must find ways to educate mainstream buyers about EV technology. Many consumers are unfamiliar with the requirements of EV ownership. Setting up a home charger is beyond the ken of many consumers and battery maintenance doesn’t compute. Dealerships, which have traditionally been transactional in nature, need to evolve into hubs for education and support. Legacy automakers also need to prioritize hassle-free ownership experiences. While startups emphasize cutting-edge features like OTA updates, traditional manufacturers must ensure that every aspect of EV ownership – charging, service, and reliability – is as seamless as possible.
The EV market now sits at a crossroads, appealing to two very different customer groups. On one side are the early adopters and tech enthusiasts who value cutting-edge technology. These folks, often drawn to startups like Tesla or Rivian, are excited by the innovation that EVs offer. They appreciate the concept of a vehicle as a gadget on wheels, offering frequent updates and technological advancements post-purchase. For this group, glitches or minor inconveniences are often forgiven, as they see themselves as pioneers in the tech ecosystem.
On the other side are the mainstream consumers who represent the bulk of car buyers. These customers prioritize reliability, convenience, and value. For them, a car is a practical tool, not a project. They are accustomed to the seamless service and hassle-free experience provided by legacy automakers. Mainstream buyers expect their vehicles to simply work, with minimal interruptions to their routines.
Some factors that currently limit EV adoption are common to both buyer groups. Purchase price remains a significant factor, since EVs still come at a premium compared to internal combustion engine (ICE) vehicles. Charging infrastructure is another major hurdle. Startups and legacy automakers alike must find ways to make charging faster, easier, and more reliable.
Automakers must adopt new strategies and address consumer concerns to accelerate EV adoption. Encouraging households to make their second vehicle an EV is one such approach. For many consumers, this offers a low-risk entry point into EV ownership while retaining an ICE vehicle for long trips or emergencies. By positioning EVs as complementary rather than replacement vehicles, automakers can attract hesitant buyers.
In addition, automakers need to invest in the EV ecosystem. This means improving charging infrastructure, expanding service networks, and ensuring that software and hardware support systems are reliable and easy to use. Battery innovation will also play a key role in the future of EVs. Advances in battery technology, such as solid-state batteries, promise greater range and faster charging, addressing two of the most significant concerns among potential buyers.
Finally, automakers must focus on reducing costs to eliminate the price premium associated with EVs. As production scales and battery costs decline, EVs will become more competitive with ICE vehicles, making them accessible to a broader audience.
The transition to electric vehicles is a monumental shift, akin to the adoption of automobiles themselves more than a century ago. Success will depend on the ability of automakers to not only produce innovative vehicles but also to understand and cater to the evolving needs of their varied customers.
Startups must learn to address the practical concerns of mainstream shoppers, while legacy manufacturers must embrace innovation and adopt a customer-first mindset. By addressing infrastructure challenges, prioritizing quality, and offering competitive pricing, the industry can bridge the gap between early adopters and the mass market.
The journey to widespread EV adoption will be challenging, more so with potential cuts to the Inflation Reduction Act based customer subsidies. However, with thoughtful strategies and collaboration, automakers can mitigate the challenges involved in the transition to a cleaner, more sustainable future.
Srini Rajagopalan is managing director and practice leader of automotive advisory & analytics at J.D. Power.
There’s a continued disconnect between what the broader automotive industry sees from growing, albeit slowly, EV sales and how U.S. dealers view this class of vehicles. At CDK, we wanted to uncover if anecdotes about a lack of enthusiasm on the retail level were real and to test our own hypothesis that it could be largely driven by where the dealers were located.
Why is geography so important? One word, or place: California.
More EVs are sold in California than anywhere else in the country. Nearly one-third of all battery electric vehicles (BEVS) in the first half of 2024 were sold in the Golden State. And the state of Washington is a major player too. That means dealers in those states likely view the technology much differently than clearly those in more rural areas but also populous areas in states from Michigan and Ohio to Tennessee and South Carolina.
In CDK’s Dealers Face the EV Transition white paper, the map is broken down not just regionally but at a subregional level. That allowed us to look at what’s happening on the ground for dealers, their sales teams, and what store leadership sees as the impact on their bottom line.
It was plain to see that Pacific shoppers were the most interested in EVs at 55 percent while the mid-Atlantic states of Pennsylvania, New York, and New Jersey saw far, far less interest at just 10 percent. That might seem counter to popular thinking, but dealers sell cars in every town, and from the suburbs on out, cars are a way of life that’s hard to change. The least interest came from West South Central – Arkansas, Oklahoma, Louisiana, and Texas at 3 percent. Yes, even though a lot of EV sales happen in Texas, dealers across the state and surrounding states aren’t feeling electric love from customers.
These results came before recent retreats from automakers on their EV plans. Dealer networks are the frontlines when it comes to sales and service, and leadership wasn’t rosy on how EVs would impact their bottom line.
Nearly three-quarters (73 percent) of dealers think EVs will have some negative impact on their bottom line with 53 percent saying they’ll have a negative impact on both their front and back end gross. Only 7 percent see EVs as having a positive financial impact.
Despite this pessimism, nearly three out of five dealers (59 percent) have already started transitioning their stores to sell and service EVs. Only 11 percent remain steadfast against EVs in the near future, saying they don’t plan any changes to adjust for selling and servicing EVs. But as we noted in our white paper: “Most of these EV-resistant dealers are generally smaller operators, with 75 percent saying they own one to two rooftops, and 89 percent are located in rural areas.”
With all these fluctuating conditions, the key stat of the white paper may actually not be as negative as it seems at first glance. When asked if they were optimistic or pessimistic about the EV transition, most (65 percent) fell into the pessimism camp with 19 percent being optimistic and the rest (16 percent) being neutral. The fact that the pessimism number comes below the number of dealers forecasting lower profits is a tiny sliver of a silver lining.
The thing to remember is that we’re indeed in a transitional period, shifting an entire national fleet of cars from something familiar (and often nostalgic) to an electric future that hasn’t made its case in every corner of the country. The nation’s car dealers are pragmatists and offer an unvarnished view of what they see in showrooms every day.
David Thomas is Director of Content Marketing at CDK Global, a leading provider of cloud-based software to dealerships and original equipment manufacturers across automotive and related industries.
People and goods traveling to and from homes, office buildings, stores, stadiums, factories, airports, and the rest of the built environment contribute to the largest single source (27%) of GHG emissions in the U.S. and the fastest growing source of global emissions. Published in January 2023, the U.S. National Blueprint for Transportation Decarbonization outlines important parts of the administration’s long-term strategy for reaching net-zero greenhouse gas emissions by 2050.
The blueprint was developed jointly by the U.S. departments of Energy, Transportation, Housing and Urban Development, and the Environmental Protection Agency – a notable level of coordination reflecting the urgency and the complexity of transitioning to a clean, carbon-free transportation sector. Three comprehensive strategies will guide policy decisions going forward and also help illustrate some of the ways the built environment can support transportation decarbonization: mobility that is convenient; efficient; and clean.
Even the greenest buildings imaginable induce travel demand, so owners, property managers, and developers of the built environment have both a strong interest in, and an opportunity for, accelerating the transition to zero-carbon mobility.
The U.S. Green Building Council’s (USGBC) suite of sustainability certification tools offers a playbook for those owners, managers, and developers to leverage their buildings to support the adoption of smarter mobility solutions.
LEED (Leadership in Energy and Environmental Design), the most widely used green building rating system across the globe, recognizes that green buildings are located, designed, and operated to maximize people’s access to active, public, shared, and electric transportation. Alongside tools for microgrids (PEER), parking structures (Parksmart), and existing building assets (Arc performance platform), USGBC and Green Building Certification Inc. (GBCI) programs offer a variety of ways to reduce transportation-related carbon emissions.
Local and regional land use planning is inextricably linked with travel demand and emissions. Communities that coordinate land use and transportation planning by prioritizing walkable and transit-oriented development can enable a more healthy and equitable transportation system that improves convenience and reduces vehicle miles traveled (VMT).
It’s not just about bikes anymore. Micromobility, especially e-bikes, are increasing the appeal of active travel to new users. Green buildings are designed for multimodal access, encouraging occupants who choose to walk, bike, or use micromobility.
EV sales in the U.S. is expected to grow tenfold by 2030, and all of those cars and trucks will need spaces to plug in. As adoption accelerates, equitable distribution of EV charging infrastructure is an important consideration. Meanwhile, a looming charging infrastructure gap could pose a significant obstacle for the EV transition.
Siting charging stations in workplace, retail, and multi-unit residential buildings is a critical part of meeting future charging demand. EV ready building codes are helping to “future proof” new commercial and residential buildings – installing EV charging infrastructure during new construction is up to 75% less expensive than retrofitting an existing building. Networked charging stations enable intelligent load sharing and energy management, further reducing infrastructure costs for developers, owners, and local jurisdictions.
The global transition to clean transportation and EVs will be complex and highly dependent on decarbonization of electricity generation. Fortunately, the International Energy Agency (IEA) recently published a policy guide for Grid Integration of Electric Vehicles that provides a framework for maximizing managed charging. As noted above, commercial buildings and parking structures are ideal for siting smart, networked charging stations. Additional passive (time-of-use signals) and active measures (demand response, load shifting, bidirectional charging) are key strategies for grid integration.
Travel induced by the built environment are a challenging source of Scope 3 GHG emissions to manage. Programs and tools, like Arc, assess the building performance, helping owners and managers of existing building assets measure, inventory, and reduce emissions through investments in sustainable transportation infrastructure and TDM.
The road to net-zero emissions is a long one that requires more than installing EV charging stations. It will require investments in our infrastructure and reimagining the way we build our communities to ensure convenient, healthy, and carbon-free mobility.
U.S. Green Building Council’s Kurt Steiner is a Transportation Planner/LEED Specialist and Paul Wessel is Director of Market Development, https://www.usgbc.org/.
The electric revolution is upon us, the Infrastructure is not.
With the recent signing of the Glasgow Declaration on Zero Emission Cars and Vans at the 2021 United Nations Climate Change Conference, multiple automakers and 33 countries are now officially working toward the goal of making all new cars and vans sold globally zero emission by 2040. ‘Zero emission’ in this case is defined as producing zero greenhouse gas emissions at the tailpipe, as accomplished by electric vehicles, for example.
While much has been reported about the ever-increasing number of EV offerings and the growing interest and demand, there are still major hurdles to mainstream adoption. One of the most pressing is the dire lack of charging infrastructure.
Today, there are less than 2 million EVs in operation within the United States, according to some estimates, and fewer than 100,000 charging stations to service them — nearly a third of them in California. With projections for EVs in operation within the U.S. exceeding 25 million by 2030, the calculus on what it will take to keep those zero-emission vehicles running is staggering: Approximately 13 million EV stations need to be installed by 2030, which equates to 120,000 a month in the United States alone.
The trillion-dollar infrastructure bill just signed into U.S. law does include $7.5 billion earmarked for building out EV charging networks. But given the anticipated growth rate of EVs versus today’s infrastructure, it’s going to take a lot more than that. This is where companies like Charge Enterprises come in.
From on-the-go power banks to micro-mobility and EV charging stations, we design and engineer, select and source equipment, install, and coordinate software selection and if the customer requires, implement remote maintenance and monitoring services. So whether it’s a ChargePoint system or a Blink system, or a third-party charging company, what we do is the infrastructure build-out and ecosystem planning of the site location. Servicing and educating the client is critical in establishing a reliable, safe, scalable and flexible site for future demands.
We are equipment- and software-agnostic, which means that we can provide custom solutions with careful consideration of various business use cases to ensure efficient, effective, design plans that not only satisfy current needs but also account for future scalability, growth, and ever-advancing technology. Our experienced team with nationwide scale offers turnkey engineering, design, equipment and software specifications, planning, sourcing, and installation for EV charging ecosystems.
As important as EV infrastructure is, true global sustainability isn’t confined to how we fuel our mobility. That’s why our recent strategic alliance with the National Community Renaissance, one of the nation’s largest nonprofit developers of LEED certified affordable housing, is such a critical compliment to Charge’s infrastructure solutions for intelligent wireless campuses. This partnership will further align with National CORE’s dedication to providing high-performance affordable housing that integrates energy and sustainability to reduce harmful emissions, making all communities more sustainable, healthy and equitable places to live, work, and play – especially historically disadvantaged communities.
The demand for clean, sustainable charging infrastructure is building, whether for commercial properties, fleet depots, truck/van centers, retail facilities, auto dealerships, government, or residential. Our strategy is to make it simple for everyone to switch to an EV and other electrified technology. We’re helping accelerate the transition away from fossil fuels toward a fully electric future.
Andrew Fox is Founder, CEO, and Chairman of Charge Enterprises, a portfolio of global businesses specializing in communications and electric-vehicle charging infrastructure.
Model year 2012 was a record breaking year for green cars. Average fuel economy (23.6 mpg), conventional hybrid sales (399,782), and plug-in electric sales (37,753) all hit historic highs. As a result of steadily rising fuel efficiency over the last five years, American drivers will use over two billion gallons less gasoline and cut their fuel bills by over $8 billion in 2012.
Unfortunately, in this sea of good news, there are still those who criticize the clearly successful government policies that have fostered this outcome.
Consider the case of plug-in electrics. Detractors like to focus on their sales as a percentage of total auto sales, but instead the focus should be on the incredible growth in sales this year in this sector and that the trends are in the right direction.
In the first nine months of 2012, electric vehicle sales increased an astounding 178 percent in the U.S. over the first nine months of 2011. The number of hybrid and electric models available on the market increased in 2012 by 10 and about 15 more models are expected in 2013.
Instead of focusing on the bankruptcy of A123 systems, the focus should on the fact that the U.S. now has a healthier advanced battery manufacturing industry and that the A123 automotive technology, products, customer contracts, and its two Michigan factories will stay in the U.S., thanks to its purchase by Johnson Controls.
The bottom line is that overall, the government strategy to support the market for green cars through consumer incentives, retooling loans and providing long-term pollution and fuel efficiency standards is already paying off.
But particularly with new technology such as plug-ins, it takes time to reach critical mass. When first introduced, cell phones were more rare than California Condors, but now they're more like pigeons – everywhere.
Survey after survey shows fuel efficiency is key to auto purchases. With electrics able to deliver the equivalent of running on $1 per gallon gasoline, consumers becoming more familiar with the technology, more models entering the market, and prices continuing to drop, the future is bright for electrics.
Roland Hwang is Transportation Program Director of the Natural Resources Defense Council
