Even though flying cars have not arrived, as we thought they would by 2020, electric cars are making a play for the car of the future. The transition to electric cars has been somewhat slow, but they did reach a milestone in 2017, with more than one million sold, according to the International Energy Agency (IEA).
Consumers will be even more intrigued by the idea of an electric car, as by 2022, electric cars will be as cheap as owning vehicles that run off of fossil fuels, per a Deloitte report. This tipping point goes beyond just the sticker price, including total cost of ownership. The report further suggests that by 2024, they will make up at least 10 percent of total car sales.
With all this good news, there is still apprehension that more drivers will make the move. The cost to purchase an electric car will be less in the years to come, as the cost of batteries should continue to fall. So, how can car manufacturers ensure the investment in electric cars is one that will yield returns?
Many manufacturers are already betting big on electric cars. Volkswagen is planning to spend about $50 billion in electric car production, expecting to make at least 15 million battery-powered cars. This significant investment will mean more choices for consumers, as currently there are only a handful of electric cars on the market in the U.S. Other manufacturers are making similar bets including Porsche, Volvo, GM, Mercedes-Benz, and Ford.
Will government incentives entice drivers? One thing that has influenced many electric car purchasers is government incentives. Some countries are looking to ban the sale of gas and diesel cars; however, the U.S. has not, but the government does offer incentives.
In the U.S., a tax credit of $2,500 to $7,500 is now available. The size of the tax credit is related to the size of the vehicle and its battery capacity. Additional incentives may also be offered at the state level.
While all of this sounds great on paper, what will really make drivers switch to electric cars? Fundamentally, many would say that it has to do with how a person looks at their carbon footprint and whether or not they are serious about reducing it. Incentives and tax credits are great, but it may require a completely new approach to driving. Ultimately, not transitioning could impact climate change and the earth’s ozone. The U.S. may see electric cars move faster in younger generations that are more in tune with protecting the planet.
One of the biggest challenges ahead for the transformation of driving is charging station infrastructure. While they are plentiful in big cities in California like San Francisco and San Diego, they are scarce in many rural areas. Thus, there must be an investment in charging stations to reach the scale of the investment in the cars themselves. Consumers will not flock to buy something that is not viable for them. Until this is resolved, it would be hard to see such a surge in electric car purchases. The need for more charging stations could impact the design of cities and access. Consider that where every gas station now stands, electric chargers could be added.
The electric car outlook is certainly positive. It just needs the infrastructure to sustain it, and current and upcoming drivers need to understand the impact of transitioning and how it could save them money and preserve the Earth’s resources.
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