Published on June 23rd, 2020 | by Carolyn Fortuna0
How Tesla’s Allure Increases Consumer Readiness For EVs
June 23rd, 2020 by Carolyn Fortuna
Before we know it, 2020 second quarter results will be in for automakers. By far, Tesla has been the winner, with stockholders increasing their faith in the all-electric car company and its future. Consumer readiness for EVs is generally dictated by personal experience with EVs, especially positive experience, and high satisfaction rates seem to be pivotal for EV sales.
Earlier this year, the Consumer Reports Owner Satisfaction Survey announced that Tesla is the car brand with the highest owner satisfaction. Yet the JD Power 2020 Q1 Mobility Confidence Index Study concluded that most aren’t ready for electric vehicles. Can Tesla’s allure on the stock market and on city streets inspire more consumers to take the EV plunge? Of course it can. The bigger question is, how many will feel ready in the coming year? We don’t know, but let’s explore some of the underlying issues.
US transportation accounts for 29% of total energy use per year, and the transportation sector is beginning either a gradual but consistent shift from fossil fuel to electric power or a sharp shift. Forecasts vary widely, depending on assumptions of how quickly consumers warm to electric vehicles, how strong policies supporting them are, and availability of key materials/supplies.
Already, we see gals charging in public garages and wide-eyed teenagers circling Teslas at shopping malls. The cars are getting out there and getting into mainstream consciousness. More and more people are seeing them at the grocery store, and getting into conversations with happy owners.
2020 has been a strange year for automakers, with COVID-19 changing everything we know about consumerism and travel. Yet many new individuals and constituents are finally joining the call to go electric nonetheless, with Tesla leading the way in soaking up their interest. Will a surge in electric vehicle sales into 2021 occur as new global programs encourage consumers to buy battery-powered vehicles, as costs continue to come down, and as production capacity increases?
Many carmakers moan that they can’t generate a profit on EVs, but Tesla can, due to continuous production process upgrades, quality improvements, and cost cutting. An interesting article from our friends over at EV Annex suggests that Tesla’s innovations are a result of the company’s vertical integration and economies of scale — another plus that puts Tesla ahead of its competitors in this bold new EV world.
Superchargers Are the Model for the EV Charging Field
Tesla started building a web of Supercharger stations as it launched the Model S in 2012, recognizing that the success of the all-electric car was contingent on reliable access to charging — even if each Supercharger cost Tesla about $300,000. Since that time, Tesla has expanded and improved its network. Innovation in its liquid-cooled cables and charging stations in the latest significant update doubled the peak charge rate to 250 kilowatts.
Even Car and Driver says that the Tesla Supercharger experience is “seamless” and alleviates the frequent experience at other chargers of “fumbling with credit cards or phone apps.” Recalling the Field of Dreams allusion, their conclusion is that, because a Tesla Supercharger is so easy to use, “people will use it.”
A 2019 paper in Transportation Research concludes that access to private charging infrastructure influences people’s willingness to purchase EVs. As Tesla Superchargers become more ubiquitous, though, charging angst around the need to charge at home may lessen. Furthermore, charging options are going up across the country (and world) every day. The Edison Electric Institute (EEI) forecasts almost 10 million chargers of various types will be located at workplaces, commercial yards, apartment buildings, municipal parking lots, and transit depots across the US by 2030.
More Reasons Tesla Inspires Consumer Readiness for EVs
Tesla’s first quarter earnings report for 2020 indicated many ways that Tesla’s all-electric vehicles are creating consumer readiness for EVs.
A positive $16 million profit was logged even during the unprecedented economic challenges of the COVID-19 pandemic. Elon Musk rallied to reopen the Model 3 factory in Fremont, Alameda County, California, and it doesn’t look like it will be shut down again. Tesla keeps developing a neural network that continuously collects data and updates the driving experience of Tesla drivers using Autopilot every couple of weeks. A “Full Self Driving” feature can now detect and stop at traffic lights and stop signs. Model Y deliveries started a full 3 months ahead of schedule.
Predictions are that there is consumer readiness for EVs bubbling under the surface and a surge in EV sales will make that desire quite visible in 2021.
Maybe all we need to do is look to trends in Europe, which is far ahead of the US in terms of EV market share. Despite the pandemic — or in part because of it — EV market share has been spiking in countries across the Old Continent. January through May, EV market share was 7.2% in the UK, 7.6% in Germany, 9.2% in France, 12% in the Netherlands, and 56% in Norway. The US is still around 1% to 2%. With growing awareness and more competitive models, we could see that really grow in the coming year. Tesla now offers not only the mass-market Model 3, which was the best selling passenger vehicle of any type in California in the 1st quarter of 2020, but also the Model Y crossover/SUV, which is primed to compete with the best selling crossovers/SUVs in the US as production increases. Here’s a photo and a short video of a brand new Model Y at a Supercharger earlier today:
Saw a Model Y in the wild today! pic.twitter.com/56xiEmabZ6
— Zach Shahan (@zshahan3) June 24, 2020
— Zach Shahan (@zshahan3) June 24, 2020