Technology has been the solution to sustainability for quite a long time and their coexistence has made them interdependent, widening the pavements for a promising alliance. According to the Allied Market Research, “The green technology and sustainability market size was valued at $6.85 billion in 2018, and is projected to reach $44.61 billion by 2026, growing at a CAGR of 26.5% from 2019 to 2026.”
The modern electric vehicle commercially went on business since 2000 called as a form of green technology. Though the facts and figures regarding this green technology needed to be checked and approved as a justifiable alternative to diesel and petrol vehicles, it Is known to be a path breaking technology in the automobile industry.
As per the electric vehicle category, there were primarily three that is taken into consideration in the group of electric powered vehicles, that are:
Hybrid Electric Vehicles (HEV)- Extracts energy in the form of electricity from the car’s battery, which is recharged by the car’s systems.
Plug-In Hybrid Electric Vehicles (PHEV)- Unlike the prior, PHEV extracts electricity from stationary power resources.
Battery Electric Vehicles (BEV)- It is the same as PHEV and uses stationary power resources.
These categories of Electric Vehicles have proved to provide abundant environmental benefits. Subsequently, the PHEVs and BEVs were highly appreciated to substitute the traditional internal combustion engines (ICE)- based light-duty vehicles (LDVs). Later in 2015, a statement by the National Academy of Sciences recognised the true potential of PEVs, acknowledging their extraordinary performance and thus helping them gain an upper hand over ICEs.
Consumer Behaviour influencing the purchase of Electric Vehicles
Electric Vehicles were an all-American idea until the rest of the world woke up to the prominent benefits that the EV provides. Lower operating costs, better acceleration, smoother operations, zero to none tailpipe emissions, easy maintenance etc, boomed the market for EVs and there has been no looking back then. However, there are still mixed reactions that were raised up to the occasion on various reports on EV sales for America and the rest of the world.
Why are people still sceptical about this new age technology that is versatile and favourable not just to the environment but also to one’s pocket? What are the factors that are affecting their purchase decision? Let’s dig a little deeper.
Cost and Battery Pricing - Though rapid evolution has promised competitive pricing for the Electric Vehicles, it is still a far fetched idea in terms of cost. As compared to other CNG or diesel powered vehicles, EV has a higher end of pricing. For example, the Ford Fusion is available to the consumers in ICE, HEV and PHEV variants. While the pricing is a factor that brings its HEV price $6000 more than the ICE variant and around $13000 more in terms of PHEV. A major survey done in 2011, stated that the pricing is a ‘major disadvantage’ that EVs are suffering from and 50% of its potential consumers agree with the fact.
Driving Range - Apart from the cost, EV also has a significantly lower driving range from other fuel power vehicles. While any fuel powered vehicle can last around 300 to 400 miles in a single tank of fuel, EV vehicles can only achieve 100 to 300 miles per charge. Referring to this article by EV adoption, the 2018 range of EV cars, still falls short in a median range of 300 miles when compared to diesel cars. That is an uninspiring range even for the world's best electric car manufacturer Tesla and do not forget the EV cars by Tesla falls into the category of luxury cars.
Charging Time - It is rather obnoxious to wait for your car to get charged in time of emergency. An EV takes anywhere from 30 minutes to more than 12 hours to charge by a 7kW charging point and has a 60kWh battery. Adding to the best of the best, a study by Hidrue et al. (2011) was conducted over prospective EV owners and it has been observed that an average person is ready to pay a sum of $6000 or more to reduce the time of charging from 10 hrs to 1 hour and around $8000 extra to reduce the time from 10hrs to 10 mins.
Fuel Prices - The ever-increasing fuel prices, be it petrol or diesel, can be considered the major reason for the rapid adoption of EVs. With fuel prices reaching the sky, EVs can be an alternative solution to the dilemma that stands erect. In an econometric study conducted by Diamond (2009), using both panel as well as cross-sectional data on HEV adoption between the various States in the U.S., it was found market share was strongly impacted by the gas price. “A 10% increase in the average price of gas would result in a 70-90% increase in state hybrid market share (depending on the vehicle)”. To quote an article from Forbes, “Petroleum prices that fall on the high end of EIA expectations increase the market share of EVs from 65% to 70% in 2050. Conversely, lower-than-expected oil prices could decrease EV market share to 61% in 2050.” This is a clear picture that demands no explanation over what is expected in the near times.
Environment sensitivity - As most of us worry over the depleting Ozone layer and the inflated environmental hazards choking the healthy atmosphere we live in, it won’t be wrong to say that this concern has been another major factor in the popularity of EVs. Whether Green Technology or sustainability, EVs tick all the checkboxes for being a saviour for the environment amidst all the smoke emitting fuel cars.
In Europe diesel vehicles are being banned from entering city centers. According to news reports, the European parliament is gearing up for revamping its laws concerning the automobile industry. While manufacturers are expected to cut down on CO2 pollution mandatorily by 2030, automakers are busy launching flagship EVs. This can be a major kickstart to the EV revolution in the market.
Though the world is still contemplating on the pros and cons of a major shift to Electric Vehicles, we are confident of the fact that these sustainable automobiles will emerge as one of the most in-demand technologies that would transform our lives. EVs, leveraging on their positive image driving sales, can soon be seen climbing the ladder of the ‘prestigious customer lifestyle’ of the decade.