Do You Want An Electric Vehicle? What May Be Holding You Back

Do you own an electric vehicle yet? Are you considering buying one? Why or why not?

Bonnie Datta, Senior Director of Regulatory Affairs and Market Development, Americas and Southeast Asia at Siemens, has been on the front lines of the electric vehicle industry for the past several years and has a unique perspective on why these eco-friendly vehicles are still only a fraction of the total vehicle market.

As of July 2019, there are about 1.3 million EVs on U.S. roads and about 3 million across the globe. Sales of EVs are definitely on the move, with a 33% spike in both June and July over last year, and about 40 new models from almost all the automakers expected on the roads by 2025. 

There are now about 22, 250 EV charging stations and about 66,400 EV charging outlets today, and it’s growing daily; 80% of charging happens in the residence.  Add to that the increase in climate change-related weather and news coverage, and EV growth seems to have momentum. But that momentum seems to only be moving at about 10 mph. However, they are still only inching up to 2% of the total vehicle market today, and the future remains to be seen.  Why?

“It’s going to happen,” Datta told me recently in an extended interview. “It’s not so much a matter of ‘if’ it’s going to happen, but ‘when.’ But we need a strategic roadmap and a policy framework….EVs are one of the most complex systems, just because it cuts across multiple stakeholders.”  

Datta says we need a holistic, coordinated approach between policymakers/regulators, utilities, automakers and consumers. It has to be both a top-down and a bottom-up approach, because, well, it’s complicated.  Each one has a critical role to play. “It’s an industry issue and we all need to come together to do it.”

Why is Minnesota a model for EVs?  Spoiler alert: Innovative utilities matter.

As the hub of the wheel in the power generation ecosystem, utilities can either support or hinder EV adoption. If EV owners can’t charge their cars conveniently and relatively quickly, they won’t buy them. If utilities won’t cooperate with charging station companies and sites, EV owners won’t have the charging access they need. It’s literally all connected.  

Datta said they need to be more innovative, like Minnesota.

Wait, Minnesota?  Considering that California is by far the largest EV market – with about 61% of EV sales as of July 2019 – and the home of Silicon Valley creatives, I fully anticipated her example of an innovative EV ecosystem to come from there, not from one of the coldest states in the union. However, EV sales grew in Minnesota by 103% from 2017-2018, compared to 81% nationwide, (so much for concerns about how these vehicles might perform in very cold weather!).

Datta thinks that Xcel Energy’s new “turnkey solution” in Minnesota – where she said owners will pay only $34/month to charge their EVs – might be a game-changer for both utilities and EV owners, because owners will know what powering their EV will cost, just as they know generally what they pay to fuel-up their gas vehicle.

“It’s a great example of how a utility can play such a critical role in adoption and animating the market, which is what we want more and more utilities to consider.” 

But utilities are highly regulated and Datta says regulators are the logjam.

Regulators need to be more innovative

“I think regulators have a very, very important role to play to support the utilities in this evolution,” Datta emphasized. Their job is to keep rates low, but they need a 21^st century way to do it.

“Regulators have not designed a clear policy framework, therefore, it’s been very ad hoc,” she explained. This leaves utilities unable to innovate in response to rapidly-evolving energy, storage and power-generation technologies, and the growing EV industry.

“Regulators are staying in a very narrow business model,“ she added, saying they need to be more innovative, like they are in Minnesota.  

Working with regulators every day, Datta sees their side too. “Regulators have a really hard job to keep up with the technology revolution…(the energy revolution) and now here comes EVs, and so that involves the transport agencies as well, and then you have the cities as well.” As I said, it’s complicated.

When policymakers/regulators adopt EV-supportive standards, they enable the market to grow – by lowering costs, and ensuring customers can pay how they want and use whichever EV charging system they choose – as they did in California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont.

Automakers need to promote EVs the way they do SUVs or luxury cars

A key point Datta stressed repeatedly is the need to educate the consumer, who can be the manager of a small facility, plant, or small shopping mall or library, for example, or an average driver like you and me.

She says the primary responsibility for that lies with the automaker (OEMs). “Let’s face it, you crave a Porsche or a nice SUV just because you’ve seen it on some billboard or television ad or social media feed… and OEMs need to do the same for electric vehicles.” They also have to get the cost of a new EV down. 

For adoption to grow exponentially, Datta stressed, “We have to lower the cost of ownership for the customer, the (charging) site owner, and for the end-user, the driver,” across the ecosystem.

That requires that all the stakeholders move in sync, like a top-performing car mastering winding roads.