There’s no doubt that battery electric vehicles (BEVs) are set to play a huge part in the future of the automobile industry, but right now it appears they’re just not selling that well.
Although they’re still seen as a bit of a novelty, BEVs have been part of the auto-market for the past decade, yet they and hybrid plug-in vehicles (PHEVs) still only combine to make up around 2% of the global total.
As the electric car market continues to shift the ratio further from PHEVs to BEVs, what are the biggest challenges facing the electric movement?
Government Interference
Moving into 2019, the biggest issue for the BEV market has been government intervention.
In the US, the government are dropping tax credits that were previously available to their two biggest BEV manufacturers, Tesla and GM, after they surpassed volume thresholds.
In China, where the plug-in market share is significantly higher than anywhere else in the world, the government are lowering industry subsidies by a third in 2019, with the intention of fully phasing them out by 2020.
What this means is that BEV manufacturers are having to enact price hikes on their vehicles to compensate for their loss of subsidies. As economic experts expected, sales have fallen sharply in 2019 after a strong (pre-increase) final quarter of 2018.
No One Else Can Get It Right
In the US, Tesla have a dominant 75% share of the BEV market. This should present an appealing target to the likes of Ford, VW and other global competitors, however, it appears no one is really getting their BEV product right.
The Nissan Leaf, one of the better electric models on the market outside of Tesla’s offerings, has experienced poor sales through the start of 2019, along with the likes of GM’s Chevrolet Bolt.
As far as other brands go, some reports suggest car companies aren’t making much of an effort to sell their electric models, with low advertising spend and lack of knowledge in dealerships affecting buyer awareness and, of course, sales.
In China, it’s proposed that the government is utilizing the removal of subsidies to eliminate some of the weaker players in the market in order to restructure the industry. China’s BEV market is dominated by its own brands, with eight out of ten of the top manufacturers being domestic names barely whispered outside of Chinese borders.
A lack of legitimate global competition negatively impacts product innovation, awareness and competitive pricing in the market. For now, it’s more or less up to Tesla to keep BEVs interesting and relevant.
The Best Option?
Finally, for the consumer, it’s not apparently clear that electric vehicles are the best route to take when buying a new car. When it comes to the auto-market, consumers tend to be savvy and considered with their cash, and these factors will come into play:
- Economics: Whilst BEVs are cheaper to run than their fossil fuel consuming counterparts, they are significantly more expensive to buy up front. The initial sale price can be off-putting for many, and the potential future savings on fuel consumption are not enough to offset the initial balance.
- Convenience: Charging stations are still relatively hard to come by when out and about. At home or otherwise, they also don’t offer the fill-up-and-go solution of a diesel or petrol car, taking at least a few hours to fully charge. Outside of Tesla models, most BEVs offer a limited range compared to a normal vehicle. Combine these three factors together and you have a practical issue that many would rather avoid.
- Environmental Concerns: Simply put, not enough people truly care enough about the eco-friendly benefits of an electric vehicle to make the purchase. It’s an unfortunate reality of the current market, but most consumers prioritize performance, upfront costs and sticking to what they know when it comes to buying a car.
So, there are numerous issues currently floating around the electric market. What’s important to note, however, is that these issues are current and should be resolved in the long term. Competition in the market will improve, meaning more choice for consumers and better pricing.
Once a truly competitive price point has been found, the industry should accelerate significantly, meaning more BEVs on roads and more accessibility options for them, removing today’s consumer concerns. In the meantime, retailers like Imperial Cars will continue to offer a variety of electric, diesel and petrol vehicles.
It would appear the electric revolution is still on the way, just not quite yet.
