A new global study has found that the cost of EVs is the biggest factor working against them

Tags: #ev-range #ev-cost-of-ownership

Worldwide researcher, Ipsos, has released the results of its latest 'Global Mobility Navigator' study, which surveyed 20,000 people from around the globe on their attitudes to future powertrains and mobility. When it came to barriers to adoption of EVs, it was the usual three rearing their heads: cost, range and charging infrastructure. But cost was the biggest factor.

For years we had it drummed into us by various media that a lack of range was the biggest reason why we might want to steer clear of an EV. Shows like Top Gear which perpetuated the myth that sub-100 miles of range meant that you'd run out of juice in the middle of Lincoln and have to run an extension cable through a window of an unwitting house or business to get going again.

However, Ipsos's latest Global Mobility Navigator Syndicate Study reinforced something we've known for a while; range anxiety isn't anywhere near as much of an issue as it once was. In fact, cost ranks far higher as a factor for the 20,000 people round the world who answered the Ipsos study.

It found that consumers have a narrow tolerance to paying more for an alternatively fuelled car. A 10 per cent premium is acceptable, but once that differential goes through 20 per cent, interest wanes quickly. Given that many EVs cost at least 20 per cent more than their ICE equivalents you can see where the issue lies. For example a Peugeot e-208 costs from £25,050, but a bog-spec petrol equivalent can be yours for £14,450. Similarly, a bottom-of-the-rung Volvo XC40 can be had for less than £25,000 and yet you'll pay double for the electric version.

Vice President of Mobility and Ipsos, Todd Markusic, said: “The primary barrier is price; regardless of the type of vehicle in question it is the most important factor when drivers are purchasing/leasing a new vehicle. This poses a huge hurdle for BEV manufacturers since the cost of batteries remains high and is then rolled into the asking price.”

However, whilst it's true that the cost of batteries remains significant in the immediate future, Bloomberg New Energy Finance (BNEF) reckons that by 2023 we'll reach the $100/kWh mark – down from $1100/kWh back in 2010. This will put electric powertrains on near parity with petrol or diesel and as we've reported in the past, price equity is seen as the tipping point for EVs by many, not least of which is VW Senior Vice President, Reinhard Fischer.

At the moment, however, the average new car buyer in the Ipsos survey reckoned it'd take 4.6 years until an EV that met their needs was available at their price point.

Infrastructure still a stumbling block

Range anxiety has essentially been replaced by ‘experience anxiety’, something that CEO at charging provider Engenie, Ian Johnston, told us previously: “Drivers will choose sites that not only offer amenities they can enjoy in comfortable surroundings, but also sites where they know the charges are reliable, where they are able to find an available connector, and where they are able to access the charger without any kind of registration or membership hurdles.”

Attitudes to EV charging seem to reflect this nervousness around infrastructure. In the USA, the Ipsos study found that 45 per cent people thought they'd need to charge an EV once a day – this despite the fact that an average American covers 170 miles per week and a typical EV will be able to cover that on a single charge.

The nervousness around not knowing whether a charge point will either be available or working can be instilled by bad past experiences or unfamiliarity with the technology. People's preference to charge at home is partly due to knowing that their wall box is reliable and available, and it's a big reason why in the UK EV drivers treat their car like their smartphone in that they get home and plug it in almost automatically.

Familiarity is key

One of the major findings in the Ipsos report points to the fact that as people are becoming more familiar with EVs, their openness towards buying one has increased. Tracking Ipsos' studies since 2011 shows that every year the buying public's consideration of alternatively powered cars has increased. In more recent years during which time EVs have really entered the spotlight, this consideration has been far higher and 'type of engine' is no longer a primary purchase attribute.

Markusic pointed out that there's still a very large group of people for whom EVs are still an unknown quantity: “Most consumers simply have not been exposed to a BEV with less than 10 per cent having any type of significant interaction with one, which includes driving, looking or riding in one. Many of the existing barriers could be resolved with messaged marketing and consumer education to resolve misconceptions.”

Discover EV's take

It may sound like a weird thing to be positive about, but the fact that price is now the biggest barrier to EV adoption among car buyers is a good thing. Whilst worries around range and infrastructure remain, if the numbers in the windscreen at the showroom are the most off-putting thing, it demonstrates that the public wants to vote with its wallet. Only its wallet isn't quite big enough – yet.

We're entering a virtuous cycle period for EVs now; prices are dropping so more people are buying them, which means more people become familiar with EVs, and more people want to buy them which will see costs tumble. We may not be at the tipping point just yet, but it feels like the race is really hotting up to get there.