Electric Vehicles: The Tipping Point

Electric Vehicles: The Tipping Point
Chris Hill has been a fleet manager and consultant with some of Canada’s best known companies, several municipalities and the Ontario government, and served twice as chair of NAFA Ontario Chapter.

McMaster University presented a number of new findings about what drives (or doesn’t drive) consumer interest in electric vehicles at Electric Mobility Canada’s 2017 conference in May.

The McMaster Institute for Transportation and Logistics began a substantial research project in 2013 called “The Social Costs and Benefits of Electric Mobility in Canada” that is nearing completion. This is getting a lot of attention and support from the automotive and electricity industries as well as governments.

Although EV sales are still less than one percent of all new vehicle sales, a report by McKinsey & Co. earlier this year shows that 30 to 40 percent of consumers are beginning to include an EV as a possible choice for their next car. McMaster has surveyed over 20,000 Canadian households to get a better picture of where the interest is strongest.

Main motivators

Residents in major cities across Canada are more likely to be interested in an EV than rural drivers, not surprising given the limited range of many EVs and the sparse availability of public charging stations in most of the country. The most common reason given for considering an EV was not having to do as much maintenance as a conventional car. Relief from the endless sentence of replacing parts as the consequence of car ownership is a major incentive.

Size matters in making an EV fit into consumer choice. Pickup truck owners are so invested in the image of what they drive that EVs don’t even enter into their consideration. The luxury car market, which is least sensitive to price, is often persuaded to buy an EV because of a government incentive. This is regarded as a reward for god citizenship. Tesla’s approach to the market is validated by this finding.

EVs for fleet

McMaster looked at the fleet market with the help of Fleet Challenge, receiving more than one thousand survey responses. Battery-only vehicles are of interest to 11 percent of fleets, and about two-thirds in total say they would use hybrid-electric vehicles.

One factor in considering an EV was conspicuous by its absence in the McMaster session: the price of gasoline. When the Nissan LEAF, Mitsubishi i-MiEV and Chevy Volt were introduced in 2011, the price of gasoline was predicted to double over the next year and likely be the main reason for EV adoption. It hasn’t happened; in fact, gas prices in 2017 are almost the same as they were in 2011.

This may be the major reason that consumers are sticking with gas-only cars. They don’t think it will save them enough money to be “worth switching supermarkets for,” as an advertising slogan says.

Although many of those surveyed by McMaster said, “I think owning an EV is more cost effective”, it doesn’t seem that they are really convinced this is still true with today’s gas prices.

Progress has been made towards making EVs more popular. There are many more models and manufacturers to choose from. There are more public charging stations, and the cost to use those remains very low.

But the marketing of EVs in mainstream media is almost non-existent. This may be holding EVs well back from reaching a tipping point.

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