The recent dramatic drop in oil prices to their lowest prices since 2009 has led some commentators to question the prospects for electric vehicles (EVs) in North America.
Lower prices at the gas pump, it could be argued, might dissuade consumers from making the switch to plug-in EVs. However, that analysis fails to account for the wider considerations of potential EV purchasers in the United States, when it comes to choosing a new vehicle. And that broader picture shows a future for EVs that looks bright indeed.
To date, the most significant barrier to buying a plug-in EV has been the significant upfront cost—the purchase price. However, with the current availability of state and local subsidies and decreasing costs of lithium batteries, new EV models are becoming available at prices that make them accessible to the majority of US automobile buyers. As those prices continue to fall and more manufacturers launch new models, the addressable market will continue to expand. What’s more, Accenture’s New Energy Consumer research shows that more than half of consumers are considering an electric vehicle for their next automobile purchase–with interest particularly strong among people in the 18-34-year age range. Our analysis also shows that EVs typically have a total cost of ownership lower than for any other form of automobile.
But financial considerations are not the only obstacle to broader EV adoption. Concerns about range anxiety—being out of reach of a charging point—have strongly influenced the reluctance to make the switch to EVs. But this concern is also starting to ease.
Not only are new vehicles capable of longer distances between charging stops, many new entrants to the charging market are creating business models that harness innovative digital technologies to help drivers locate and schedule their visits to a charging station. For example, Chargepoint—with more than 20,000 charging stations currently installed in North America— provides users with a smartphone app that locates the nearest charging point and updates EV owners about their charging status. The company is also developing queuing technology that will enable drivers to book a dedicated slot at a charging station.
With many of the (real and perceived) barriers to vehicle ownership coming down, the question of how EV owners want to charge their vehicles will become increasingly relevant for utilities. Accenture’s New Energy Consumer research shows that consumers would overwhelmingly prefer to purchase charging services from their existing energy providers. And that preference suggests a real business opportunity for utilities.
Many utilities are actively seeking opportunities to expand the purchase of plug-in EVs and technologies as part of their fleet. Some are already offering specific tariffs and rate structures for EV owners. Others provide charger rebates and incentives and are helping expedite permitting and installation processes for public charging stations.
By adding their support to the build out of the charging infrastructure and addressing current bottlenecks such as multi-occupancy units, utilities could play a key role in driving broader EV adoption, which in turn will have a positive impact on their bottom line.