Electric vehicles still face multiple obstacles

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Electric vehicles are poised for the biggest policy push in US history, but barriers remain before plugs replace gas pumps on a massive scale.

Why it matters: EVs are an important tool to reduce CO2 emissions from transportation, the largest source of global warming emissions in the US.

Fast overtaking: The Democrats’ energy deal would massively increase incentives if passed.

  • It ignores the per-manufacturer limit of the $7,500 consumer tax credit for EVs and makes them available as a point-of-sale discount.
  • There are also first-time credits for buying used EVs (up to $4,000) and commercial fleet purchases. UKTN’ Joann Muller has a deeper look.
  • Sales are already rising, but from a low starting point. According to the Alliance for Automotive Innovation, the major US auto industry trade group, electric vehicles accounted for nearly 6% of US passenger car sales in the first quarter of the year, although they still account for less than 1% of the fleet. make up the country.
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The big picture: Here’s what’s standing in the way of rapidly expanding that stock massively:

Sticker prices: The average price of electric vehicles in June was nearly $67,000, which is well above the average gas-powered car, according to Kelley Blue Book, a division of Cox Automotive.

  • “Our data shows that price is the biggest barrier to electric car adoption,” said Michelle Krebs, a top analyst at Cox, in an interview.
  • “We should get more affordable EVs, that’s what we’ve been promised by the automakers, but they’re not here now, not in large numbers,” she said.
  • That’s especially important because the Senate deal puts price limits on which vehicles qualify for credits: They can cost no more than $55,000 for sedans and $80,000 for pickups and SUVs.

Availability: As automakers ramp up production and roll out new models, EVs remain relatively scarce. Buyers often have long waiting times.

  • “Supply is currently the main limiting factor for electric vehicles,” iSeeCars.com executive analyst Karl Brauer told me via email.
  • “Currently high fuel prices are fueling a lot of new interest in electric cars, but automakers can’t produce them fast enough to meet demand.”
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acceptance and education. Surveys show that many consumers are at least EV curious, but taking the plunge may be another matter.

  • Switching from gas to electricity means changing fueling habits, often installing new home charging infrastructure (or accessing nearby ones) and more.
  • Edmunds analyst Jessica Caldwell notes in an interview that a lot of people are “just busy and don’t want to learn a new system,” so they’re going back to the status quo.

  • One thing to watch out for: How well federal officials and industry spread the word about broader incentives. A recent Consumer Reports poll showed that 46% of people are unaware of existing federal and state incentives.

Charging access. Drivers’ confidence that they can find enough charging points – and quickly – will be crucial.

  • Rural access is increasing, but there are still miles to go before charging is deeply intertwined with the fabric of U.S. transportation infrastructure.
  • Watch the progress of the Biden administration’s efforts to spend billions on the separate infrastructure bill for a major nationwide rollout.
  • In fact, states today have a UKTN to submit plans for using the main $5 billion pot under the plan, but there are still several steps in the process.
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The power of the establishment. People don’t often buy cars!

  • We just discussed new research showing that EV adoption rates in line with the goals of the Paris Agreement require much faster fleet turnover.
  • The average lifespan of an American gas-powered car is 16 years, the study said.

What we look at: Research groups and companies, such as BloombergNEF, are making careful market forecasts for the adoption of electric vehicles.

  • Watch this space as they weave the law into their models and update their work.

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