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The Emergence of Electric Vehicles and their Impact on Consumer Behaviour.

EVs have been predicted as the blue-eyed baby of a futuristic, eco-centric world; the epitome of sustainable technology. The impact EVs have on a gasoline-driven, carbon-foot-printed world is immense, considering their positive influences on our environment, daily life and our wallets!

As per the 2015 report from Helms, Kamper, and Lambrecht,over 30% of energy consumption in Europe in 2010 was contributed by the transport system, of which around 70% was from road transport.” The overwhelming demand for gasoline fuelled by extremely dangerous peaks of carbon emissions have pushed the buttons for green technology as a sustainable travel solution.

To quote from the Allied Market Researchreport, “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.

Electric Vehicles as a greener and sustainable solution

The modern electric vehicle commercially went on business since 2000. With no-combustion and an absence of tailpipe emissions, EVs boast of lower emissions in their lifespan

compared to other vehicles that run on fossil fuels. This is regardless of their sources of electricity.

Further, as a huge part of their emissions are contained in the energy sources and the manufacturing process, EVs have been tagged on to the greener, environment-friendly norm.

Though the facts and figures regarding the feasibility of such green technology have 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.

Types of Electric Vehicles

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 recognized the true potential of PEVs, acknowledging their extraordinary performance and thus helping them gain an upper hand over ICEs.

Electric Vehicles and consumer behavior patterns 

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 skeptical about this new age technology that is versatile and favorable 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.

1.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.

With lithium-ion batteries not quite there yet in their costliness, buying an EV can still be quite expensive. As compared to other CNG or diesel-powered vehicles, EV has a higher end of pricing.

For instance, though Ford Fusion is available to the consumers in ICE, HEV, and PHEV variants, its HEV is priced $6000 more than the ICE variant and around $13,000 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.

2.Driving Range- Apart from the cost, EVs also have 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, Electric vehicles can only achieve 100 to 300 miles per charge.

Concerning the article from EV adoption, the 2018 range of EV cars still fall 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 fall into the category of luxury cars.

3.Charging Time- It is rather obnoxious to wait for your car to get charged in a 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, 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 minutes.

4.Fuel Prices- The rocketing 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 panels as well as cross-sectional data on HEV adoption between the various States in the U.S., it was found that the 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 on Forbes, on the future of EVs in the U.S., “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.”

5.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 it is Green Technology or sustainability, EVs apparently tick all the checkboxes for being an environment-saviour, amidst all the smoke-emitting fuel cars.

In Europe diesel vehicles are being banned from entering city centres. As per 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 kick-start to the EV revolution in the market.

Final Words

Yes, EVs are still ‘imperfect’ and may not seem a very affordable commodity, at least in the present days. But we must remember that the primary purpose and effect of EVs is to be an alternative, if not a substitute.

The intention has a bigger purpose and value: to save the Earth, to curb the premature draining of fossil fuels in the world, and overall a positive, eco-conscious attitude of “give-and-take” in our bio-spheres.

Though the world is contemplating the pros and cons of a major shift to Electric Vehicles, it is evident that these “green” automobiles will emerge as one of the most in-demand technologies that would transform our lives. EVs, still overshadowed by the power-sector of gasoline-driven vehicles, sooner or later, will gear up in the commercial market with its “sustainability” factor.

Leveraging on their ‘positive-image’ driving sales, EVs can soon be seen climbing the ladder of the ‘prestigious customer lifestyle’ of the decade.

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