Society | Electric Vehicles

Unpacking the slow-down in EV adoption

10 reasons why the EV adoption rate is slowing down

Published Nov, 2023

The buzz around electric vehicle (EV) adoption has been loud, often hailed as the future of eco-friendly transportation. Yet, as the electric car market expands and governments offer green incentives, there's a growing backlash against EVs that can't be ignored. Whilst the view that there is a slow-down is largely anecdotal, growing coverage across multiple mainstream media outlets has a way of turning anecdotes into perceived significant facts.

From initial costs to cultural attachment to internal combustion engines, here are ten factors fueling the resistance against electric cars. Whether you're an electric vehicle enthusiast or a skeptic, understanding these barriers can offer a nuanced look at the future of EVs.

Post-covid-19 inflationary environment persists

One significant hurdle affecting widespread electric vehicle adoption is the ongoing post-COVID-19 inflation. This inflationary environment impacts not just everyday goods but also hits hard on significant purchases like cars. Tesla CEO, Elon Musk, has singled out rising interest rates as one of the major headwinds facing the company as it tries to increase production and sales.

Interest rate rises are one of the go-to fiscal tools for fighting inflation across all economies. It also happens to be one of the most significant factors for consumers buying cars as most cars are still bought on finance, and a higher interest rate means higher overall cost of ownership. As well as putting off major purchases, those that are pressed to buy a car would favor cheaper cars, very few of which are EVs at the moment.

Consumers are not the only ones feeling the squeeze; corporations are also facing the impacts of high inflationary economic environment. At its Q3 Earnings call, Tesla CEO indicated the company was hesitating ongoing full tilt on the construction of a new gigafactory in Mexico.

Hertz is scaling back its highly publicised EV ambitions. Mercedes-Benz has linked its concerns to competing price cuts by other manufacturers which is itself brought on by rising interest rates and falling demand. Battery manufacturer Panasonic scaled down its battery production plans on the backs of projected weaker demands from Tesla which blames higher interest rates that ties back to government-led fiscal actions to fight inflation.

Range anxiety and lackluster charging infrastructure

One of the most commonly cited reasons deterring the transition to electric vehicles is range anxiety—the fear that an electric vehicle won't have enough battery range to complete a journey. Despite improvements in battery technology, range anxiety remains a significant psychological barrier affecting EV adoption rates.

Moreover, range anxiety isn't just about the technical capabilities of electric cars; it's also fueled by the lack of a robust EV-charging infrastructure. Without adequate access to quick and convenient charging stations, potential buyers hesitate to make the switch to electric vehicles, keeping the adoption rates lower than expected.

In the weeks after I bought an EV as my main car, I had to make adjustments to my weekly schedule. Given that I opted not to charge at home, and my nearest Tesla supercharger was over 25km away, I had to rely on the slower chargers at the local shopping mall. That has meant rearranging my schedule to fit these charging sessions in.

Driving an EV must mean a lot to put up with such inconveniences, and for me, it does. However, until battery range and charging infrastructure improve significantly, EVs will struggle to appeal to newer buyers.

Manufacturers are still pushing ICE

Another overlooked factor influencing the dip in electric vehicle adoption rates is the continued push from traditional car manufacturers towards internal combustion engine (ICE) vehicles. Many of these companies have substantial investments in ICE technology and are not quick to transition entirely to electric vehicles.

Transitioning from a profit-making ICE business with standardised designs, optimised assembly lines and a mature ecosystem of assembly, delivery and after-sales servicing to an EV market that involves steep investment and a high learning curve is a truly herculean task for most car manufacturers. No wonder, Toyota Australia continues making its case, that its hybrid vehicles represent better value for the Australian consumer than Battery Electric Vehicles.

EVs are still more expensive than ICE Vehicles

One of the most straightforward challenges affecting electric vehicle adoption rates is the initial cost. Despite the long-term savings potential on fuel and maintenance, the upfront costs of electric vehicles are still significantly higher compared to their Internal Combustion Engine (ICE) counterparts. This financial barrier is especially pronounced for consumers who are not eligible for government subsidies or tax incentives for electric vehicles, making the initial cost a substantial deterrent in opting for an EV.

For those that just need to get from A to B, there are a lot of cheaper alternatives to EVs and that is unlikely to change anytime soon. As EVs get cheaper, these established ICE cars will get even cheaper as manufacturers join a price race to the bottom.

Used EV market remains in its infancy

Another factor contributing to the slow uptake of electric vehicles is the underdeveloped used EV market. Many consumers prefer to buy used cars due to their lower prices and slower depreciation rates. Warren Buffett, arguably one of the smartest and richest investors of all time, never buys new cars on the basis that they depreciate more than used cars. He and millions of people who prefer used cars like him will not be jumping into an EV any time soon. The stock of used EVs is just too low as to be insignificant in the used car markets.

The long-term durability of EVs is still untested

Another concern that keeps potential buyers on the fence about electric vehicles is the unknown aspect of their long-term durability. Unlike ICE vehicles, which have been around for over a century and have established records for longevity, electric vehicles are relatively new to the market. Questions about the lifespan of EV batteries, long-term maintenance costs, and overall durability are still largely unanswered, contributing to hesitancy in the adoption of electric vehicles.

This is a problem that cannot be wished away or solved by any craft that we know. Only time will tell. As more EVs age, all will be revealed. News of decade-old Tesla that's racked up a million miles with some battery / motor replacement along the way bodes well for Teslas and maybe for EVs. Again, we just have to wait and see how well EVs perform with age.

EVs greendentials are still being debated

While electric vehicles are generally considered more eco-friendly than their Internal Combustion Engine (ICE) counterparts, the full extent of their environmental impact is still under debate. Concerns about the carbon footprint of manufacturing EV batteries, sourcing raw materials, and the electricity generation for charging these vehicles are increasingly becoming talking points. These debates create some confusion among consumers, making them less sure about the green credentials of electric vehicles, which in turn impacts EV adoption rates.

Sterawatt and almost every other media outlet on the planet have written a piece about whether EVs are greener than ICE vehicles. Universities and government departments have all added their contributions to the debate. Some have said EVs are greener, others have said they are not, and some have said that they are and not at the same time - just search ‘are evs greener’ on Google.

Politicians smell fuel, not blood for once

Unlike leaders, politicians rise on the backs of societal trends, including those they engineer themselves. They read the room, and when they smell blood, they pounce. When the UK conservative party narrowly won bye-elections in the seat vacated by the former prime minister, Boris Johnson, upon his resignation, their strategists saw an opportunity to win votes by "siding with motorists" and gutting environmentally friendly regulations.

In the US, conservative politicians are also taking the knife to environmentally friendly policies on a significant scale.

These political positions are not without merit. Their proponents do state the thinking behind their positions. From protecting the ordinary citizen from the burden of the cost of climate change to seeing a better alternative to current legislations, their positions should be part of an informed debate involving the members of the public that will all be affected by the impacts of climate change.

Our task as citizens is to steer those debates away from emotionally anchored arguments to fact-based intellectual discourses. After all, estimating the amount of carbon emissions a process pumps into the atmosphere is an empirically verifiable task that no amount of emotion can affect. So when climate scientists and technologists conclude that EVs produce fewer emissions and are therefore better for the environment, we should judge that at an intellectual level and not on whether we like or dislike the politicians basing their policies on it.

Journalists see news fillers

When I was a kid, my father got all his news from the newspapers, and he could only afford to read a few before the next day’s edition was published and delivered. By the time I became a regular consumer of news, we already had 24-hour news channels. My personal experiment to see just how they filled those 24 hours with news didn't end well - dry eyes, lost time and a pessimistic view of the future or humanity.

The advent of fast-moving, personalised, à la carte news curated to individual taste that abounds today has only made things worse. Horror EV ownership stories make for great reads when feelings are prioritised above facts and analysis. They help fill news pages and programme slots, especially on slow news days. They also form fodder for radio talk show hosts. The fact that they are based on individual experiences gives them a validity that cannot be impugned.

My first EV suffered relatively major issues within the first fortnight of owning it. My concerns were addressed by the manufacturer, and although it was a frustrating experience, my user experience has so far been very positive. Good experiences like mine are also abound in the media. Your task is to see these stories for what they are - just anecdotes. For empirical ownership experiences, you are better off reading empirically sound studies from reputable industry bodies.

Change is never even anyway

Finally, it's worth noting that change is a constant, but adopting something new—especially something as significant as a different type of vehicle—takes time and adjustment. As with any major societal shift, the move to electric vehicles will experience its fair share of challenges and resistance, from both institutional structures and individual consumers.

Even when linear, change often happens with a few steps backwards every now and then. The transition to EVs has gathered enough momentum to see it through. There will be setbacks, retrograde steps, and the general sense of doubt that we all like to pack along when we embark on change. There will be minor players with mega platforms pushing emotionally anchored opinions on something that requires intellectual analysis.

In the end, EVs would replace ICE vehicles in the same way ICE vehicles replaced the horse-drawn carriages. It is part of the future we are all headed toward.

Now what?

In conclusion, the transition to electric vehicles (EVs) is a complex journey marked by various economic, technological, and psychological hurdles. From the persistent post-COVID-19 inflation affecting affordability to the cultural and infrastructural inertia favoring internal combustion engines, these challenges create a multifaceted resistance to the widespread adoption of EVs. Moreover, the high initial costs of EVs, coupled with the nascent state of the used EV market and concerns over their long-term durability, add layers of financial and practical considerations for potential buyers.

The environmental credentials of EVs, while generally positive, are still under scrutiny, adding to the consumer's dilemma. Politically, the landscape is mixed, with some leaders advocating for greener policies while others retreat to more traditional stances, influenced by economic and societal pressures. In the realm of media, the sensationalisation of EV-related issues often overshadows empirical data and nuanced discussion, further complicating public perception.

For the average individual, navigating this landscape requires a balanced view. It involves recognising that while EVs are a critical component of a sustainable future, their path to dominance is not straightforward or uniform. Start by recognising that the consumer is king and can play a significant role in pushing this transition through. Stay informed, weighing the pros and cons carefully, and considering whether an EV fits your current lifestyle and budget. Join the early adopters if you can. As the cohort of early adopters becomes a critical mass of EV users, our collective support sends a clear message to car manufacturers about our preferences.

Additionally, by initiating and maintaining dialogue with our elected officials about green policies, we signal the importance of these issues for the legacy we plan to leave to future generations. Ultimately, the shift to EVs represents a significant part of a broader narrative of progress and adaptation, where every step, no matter the size, contributes to a more sustainable mode of transportation and energy sourcing.