For any country’s net-zero emissions pathway, transport is an early and key sector to de-carbonise. So key, in fact, that some countries have begun to impose future deadlines prohibiting the sale of internal combustion engine (ICE) vehicles–a very strong signal for the adoption of electric vehicles (EVs).
Recent research from the IBM Institute for Business Value (IBV) reveals that consumer demand for electric vehicles is increasing, but roadblocks persist in advancing the EV transition.
The study – An on-ramp to sustainable mobility: Accelerating the shift to electric vehicles – found that 50% of surveyed customers are considering getting an EV in the next three years. However, only 13% of surveyed industry executives anticipate that their countries will be ready to support the EV fleet by 2030.
This is a significant gap that could potentially slow down the rate of EV adoption needed to meet net-zero targets.
The findings amplify global sentiment around the demand for more sustainable transportation and bring a greater sense of urgency to understanding the barriers to EV adoption. Key factors like charge point availability, reliability, EV and energy costs, network connectivity, and digital experience are considerations impacting EV adoption.
To meet the growing consumer demand and infrastructure need, companies and governments must gear up now.
Consumers are getting ready to own an electric vehicle
With more than 16,5-million EVs on the road in 2021 alone, governments have taken note and passed climate-centred legislation like the European Commission’s Fit for 55 legislation, requiring all new cars and vans registered in Europe to be zero-emission by 2035. This impacts businesses across all industries, including power and electricity networks businesses, not just the automotive industry.
This type of legislation is a reminder that sustainability goals cannot be achieved by a single company, geography or industry; they are delivered through a collaborative ecosystem.
The IBM study reveals that executives estimate that 40% of new car sales will be all-electric by 2030. Executives surveyed believe that most consumers are motivated to obtain an EV due to widespread access to charge points (67%), environmental awareness (66%), and the ability to charge at home (63%).
The study also found that while 31% of surveyed consumers globally ranked pricing as their top purchasing consideration for EVs (with respect to total cost of ownership for EVs), 52% of these respondents are expecting to pay equal or less than ICE cars.
Despite the potential barriers of the EV home-charging expenses–around $1 000 for upfront equipment installation and $100 per month in energy costs–consumers are still willing to invest. Only about half (53%) of consumer respondents expect to primarily charge at home This makes destination charge points (at work locations, shopping and travel destinations), shared charging stations near homes, and en route fast-charging stations more necessary as EV adoption goes mainstream.
Now, take into consideration that none of the executives surveyed believed that ICE cars will be sold after 2040. This raises an important question: As the EV transition reaches an inflection point, what will it take to make these widespread EV dreams a reality?
Charting a course for more sustainable power sources
Sustainability matters, and this EV transition also requires a sustainable grid network that can meet and exceed the expected demands. More EVs on the road means increased demand for electricity, strain on the grid and, in turn, rising pressure on energy and utility companies to become more resilient and efficient.
Businesses are taking note. Fifty percent of executives surveyed believe that EV charging networks will become essential transportation infrastructure, and 43% indicated that EVs will become a critical component of the energy network and power grid.
While interest and demand continue to grow, 57% of surveyed consumers cited lack of public charge stations as the top concern. A tremendous gap exists between consumer ambitions and the perception of the ability of governments and companies to support a more sustainable means of transportation.
It will take an ecosystem of partners to meet this demand – a network of companies across industries, governments and other stakeholders – and the time to accelerate action is now. Depending on geographical location and market structure, different companies are responsible for the charging infrastructure rollout, but network utility companies are key as the provider and connector for electrification and the energy that will drive a low-carbon transport system.
When it comes to the power grid, response time for new connection requests will be critical, as is the ability to deliver resilience and security of supply in a highly distributed and decentralised electricity network.
The journey to sustainability isn’t a solo trip–it requires an ecosystem of partners, and even consumers, to help drive change.