Utilities should first invest in electric vehicle marketing and focus on those drivers who don’t need public charging infrastructure
What if most of the so-called “barriers to EV adoption” aren’t barriers at all once you focus on the question of who can use the currently available EVs without lifestyle changes? In other words, much of the electric vehicle adoption discussion focuses on why many people can’t use today’s EVs as they are – but fail to discuss who are the customers who would be better off with an EV that can be bought from a nearby dealer today. We are suggesting that the “how to increase EV adoption” conversation should focus on two things:
- What is the profile of a vehicle owner who would be better of with an EV that can be found at a nearby dealer today rather than with a gasoline vehicle?
- How to best sell them EVs?
Here is a number to remember: 18 million. That is the approximate number of U.S. suburban and rural commuters who drive to work alone, have access to two or more vehicles and whose commutes are less than 45 minutes long – and whose current vehicles have readily available plug-in electric vehicle substitutes.
In other words, there are something in the order of 9 million vehicles (or half of 18 million suburban commuters with access to two or more vehicles) that could be replaced with an already available plug-in electric vehicle and it would not require any behavioral changes on their part. They could still have a second gasoline vehicle for any long distance travel, but use the electric vehicle for commuting. These are customers who do not need any additional public charging infrastructure to meet their driving needs because they can charge their cars at home. Many of these 9 million vehicles already have direct plug-in hybrid of battery electric vehicle replacements that do not require any lifestyle changes. And, the group of long range battery electric vehicles is growing rapidly as the minimum range of the most popular new EVs already exceed 200 miles.
These EVs are often the lowest cost vehicles to purchase thanks to various subsidies and EV discount price information websites such as ev-vin.blog.com. It is not unusual to find discounts as large as $10,000 on electric vehicles. On top of it, EVs cost less to drive than their gasoline counterparts in nearly every U.S. state, and in some cases the savings can amount to thousands of dollars per year. In fact, the longer the commute, the larger the savings.
So, if we have a large buying segment to whom the existing EVs are a good fit, the vehicles are inexpensive to acquire and inexpensive operate, and who do not need public charging infrastructure to meet their driving needs, then why aren’t people buying them in equally large numbers? We would suggest that this is simply due to lack of marketing. Our experience marketing electric vehicles in programs suggests that marketing campaigns are more effective in driving EV sales than other measures and increase EV adoption more than any rebate programs or public charging infrastructure investments.
But why should an electric utility market electric vehicles? For a simple reason, because they reduce electric rates and vehicle emissions. In fact, EVs represent one of the largest rate reduction opportunities for utilities, where many large utilities in the U.S. could generate several hundred million dollars in annual contribution margin that could be used to lower electric rates.
If increasing EV adoption is the goal, then the cars have to be marketed actively like any other consumer product. The focus needs to be marketing the products that are available today to buyers to whom the cars are suitable as they are today. The kWh sales and environmental benefits will follow from the sale of cars to people who will use them every day and not from the sale of chargers. There is a place for installing public chargers but it is not a prerequisite for selling EVs to this target customer segment. If the promise of strategic electrification is to be realized, we need to make the most of the resources we have.
1 U.S. Census American Commuter Survey https://www.census.gov/programs-surveys/acs/. Calculated as % of commuters who drive alone and commute less than 45 minutes * % commuters who drive alone and have more than 1 car * total commuters [=99 million people]* % of urban and suburban commuters (74%) * % of vehicles with a plug-in substitute (~25%). Nationally, 26 percent of Americans described where they live as urban, 53 percent said suburban and 21 percent said rural. https://fivethirtyeight.com/features/how-suburban-are-big-american-cities/
