September 14, 2022 - Podcast

Episode 305 — U.S consumer acceptance of electric vehicles

The United States government has set an ambitious national goal of reaching 50 percent penetration of plug-in electric vehicles by 2030. However, a new study by Indiana University researchers shows that the U.S. is unlikely to meet this goal unless electric vehicles become more affordable for consumers. The study was authored by Professor John D. Graham and Research Assistant Eva Brungard. It was recently published in the journal Frontiers. Graham says the study is important because we need to focus policy makers, automakers, and electric utilities on how to stimulate consumer demand for -- and automaker offerings of --affordable electric vehicles. In 2021, President Joe Biden pledged to achieve net zero carbon emissions economy-wide by 2050, a commitment that is now a formal U.S. submission under the 2015 Paris Accords of the United Nations Framework Convention on Climate Change. As it stands, transportation is the largest contributor to U.S. greenhouse gas emissions, and 58 percent of transportation emissions come from light-duty passenger vehicles, such as cars and light trucks. Reaching Biden’s goal to cut emissions requires a transition from internal combustion engines to zero-emission vehicles, such as plug-in electric, but a number of factors are slowing that transition, including the price of plug-in electric vehicles, which tend to cost $10,000-$20,000 more than their internal combustion engine counterparts. Graham and Brungard found that the midpoint of prices of all new vehicles sold in the U.S. in 2021 was roughly $45,000. Of the 108 total plug-in electric vehicle models offered to U.S. consumers in 2022, only 17 featured a base price below $46,000. The good news is that the number of affordable plug-in electric vehicles on the market are increasing. However, the dominate U.S. producer of electric vehicles -- Tesla -- is not prioritizing affordable models. Graham says that without more rapid penetration of plug-in vehicles into the affordable end of the new vehicle market, achieving Biden’s goals could be impossible. However, the commercialization of plug-in models in Europe provide hope for reaching the benchmarks, but it will require sufficiently favorable public policies to spur greater consumer acceptance. Graham says that instead of relying on unrealistic mandates from California and other states, the federal government needs a comprehensive electric-vehicle policy, including performance standards and incentives, similar to what has been adopted in the European Union.