Automakers are embracing electric vehicles, but what about buyers?

The world’s major automakers have made something very clear: They believe electric vehicles will dominate their industry for years to come.

Still, for that to happen, they’ll have to sell the idea to people like Steve Bock.

When Bock recently replaced his family’s 2013 Honda Pilot SUV, he considered – and then rejected – the idea of ​​buying an electric vehicle. An electric vehicle with enough space to carry his two dogs would be too expensive, he decided. And he would worry about traveling long distances with too few charging stations.

“I would consider that if the prices go down,” Bock said, leaving open the possibility of buying an electric vehicle next time around.

Instead, Bock, from a suburb of Raleigh, North Carolina, opted for a Subaru Outback. Like the majority of other vehicles sold in the United States, it runs on gasoline.

Opinion polls show that a large majority of Americans are aligned with Bock. An electric vehicle could be on their shopping list if it costs less, if there are more charging stations, and if a greater variety of models are available. In other words, now is not the time.

All of this represents a significant risk for the largest automakers. Most of them stake their futures on the idea that consumers will soon be ready to buy vehicles that do not run on the internal combustion engines that have powered cars and trucks for over a century, but on l electricity stored in a battery.

General Motors, Ford and Volkswagen plan to spend a total of $ 77 billion to develop global electric vehicles over the next five years, with models ranging from pickup trucks to small SUVs. GM has gone so far as to announce its goal to end gasoline and diesel passenger vehicles entirely by 2035 – and become carbon neutral by 2040.

For automakers, the risk is as dangerous as it is simple: what if American consumers refused electric vehicles for many years?

Companies would have no choice but to rule them out and, in the meantime, hope that their profits from gasoline vehicles would still cover their costs – at least until large proportions of buyers turn to them. electric vehicles.

If they don’t, the financial blow could be heavy. So far, electric vehicles represent less than 2% of new vehicle sales in the United States and around 3% globally.

“It’s still an industry that doesn’t have massive appeal to the general population,” said Jeff Schuster, president of global vehicle forecasting for LMC Automotive, a consulting firm. “It could be a financial drain if consumers don’t buy at the same level.”

Yet unlike the United States, sales of electric vehicles have taken off in Europe and China, in large part due to much stricter pollution regulations and government incentives. These stricter environmental regulations are forcing the industry to sell more electric vehicles.

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In Europe, automakers have unveiled a slew of new electric models ahead of the EU’s lower limits on average emissions of carbon dioxide, the main greenhouse gas responsible for climate change, which took full effect early of this year. Government-backed incentives can reduce the cost to near that of an internal combustion vehicle.

As a result, nearly 730,000 battery-powered vehicles were sold in Europe in 2020, including more than 300,000 in the last three months of the year. The market share of electric vehicles – battery-only and plug-in hybrids – rose from 3% to 10.5%. In December, their share was almost one in four.

Among the new owners is Kerstin Griese of Essen, Germany, who bought a battery-powered Peugeot 208 after driving electric cars in the fleet to work. Griese found that they provided the acceleration needed to reach the freeway safely for its 40-kilometer (25-mile) journey to the city of Solingen’s public works department.

“I thought to myself, when they cost around 30,000 euros ($ 36,263) and have over 300 kilometers of range, and the incentives are high, then I’m there. And it happened last year.

After a government grant of 6,000 euros and the automaker’s share of 3,000 euros, his new car will cost around 24,000 euros ($ 29,000). The car can use fast-charging stations along motorways, where it can recharge within half an hour when making longer trips, like shopping trips to neighboring Netherlands, around 65 kilometers (40 miles).

“I found it very attractive,” she said.

In China, which accounts for about 40% of global EV sales, purchases have accelerated due to limits on the number of internal combustion cars that can be registered in six major cities, said Arndt Ellinghorst, analyst at research firm Sanford C. Bernstein. .

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Automakers, including startups Lucid, Bollinger, Rivian and Workhorse, plan to introduce 22 new models of electric vehicles in the United States this year after rolling out six last year, according to LMC.

Stricter regulations – and, perhaps with it, higher sales of electric vehicles – could also come to the United States if the Biden administration is successful in promoting electric vehicles as part of a broad plan to combat it. climate change.

Still, it could prove to be an uphill battle. Only 260,000 fully electric vehicles were sold last year in the United States. That’s on a total new vehicle market of 14.6 million. In fact, Americans still generally reject cars in favor of less fuel-efficient trucks and SUVs.

Two polls late last year provided insight into Americans’ appetite for electric vehicles. One, by Consumer Reports, showed that only 4% of adults with a driver’s license plan to acquire an electric vehicle the next time they buy a vehicle. Another 27% said they would consider one. About 40% express some interest – but not in their next purchase. About 29% don’t want an EV at all.

Likewise, when JD Power surveyed people who intended to buy or lease a new vehicle in the next 18 months, only around 20% said they were likely to buy an electric vehicle. About 21% were unlikely. The others were undecided.

“For every new vehicle buyer who is seriously considering (battery electric vehicles), there is one on the opposite end of the spectrum,” said Stewart Stropp, senior director of automotive retail at JD Power.

On the one hand, Stropp said, most buyers are unfamiliar with EVs and haven’t driven one. Those who have, however, are about three times more likely to consider them, he said. People want chargers as many as gas stations, Stropp said, but don’t seem to realize that most recharging can be done at home.

The task of breaking the reluctance of the American public to invest in a fully electric vehicle could prove problematic. And the automakers clearly recognize this. Last year, General Motors planned a major public campaign featuring test drives and engineers to answer customer questions at events across the country. The viral pandemic, however, forced him to abandon the plan.

GM is making experts available virtually this summer as it begins selling a small electric Chevrolet Bolt SUV for just under $ 34,000, its first electric entry into the most popular segment of the US market. But Tony Johnson, chief marketing officer of Chevy electric vehicles, agrees that there is no substitute for “putting seats in the seats”.

Johnson optimistically notes that polls for GM show that the number of people who would consider an electric vehicle is much higher than it was five years ago. GM is keeping the price of the revamped Bolt sedan under $ 32,000, he said, and is offering free in-home charging stations.

Schuster predicts that sales in the United States will increase this year to 359,000, take off in 2022, and reach over one million next year. By 2030, LMC expects US sales of more than 4 million electric vehicles. Yet even that would only represent a quarter of the overall market.

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Still, encouraging signs emerged in February, when sales of electric vehicles rose 55% from a year ago to 18,969, according to Edmunds.com. The variety of models, along with additional incentives and the expectation of tighter pollution limits from the Biden administration, helped boost sales, Schuster said. Biden is in favor of expanding a tax credit for the purchase of electric vehicles and has pledged to help build an additional 500,000 charging stations and increase fuel efficiency requirements.

Currently, a federal tax credit of $ 7,500 is being phased out after an automaker reaches 200,000 sales of electric vehicles. GM and Tesla have both passed that level, and Nissan is close. A Democrats’ bill would raise the cap to 600,000.

The market will switch to electric vehicles, Schuster predicts, when all of these forces align.

“There is more choice, more competitive pressure,” he said. “A new generation of technology will bring prices down. We are getting there. “