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Getting the EV Industry Charged Up

Consumers’ confidence with electric vehicles — and the ultimate success of the EV industry — depends upon the building of a network of charging stations.

2021 Auto/Aero Site Guide
Electric vehicles (EVs) have had a good year. According to Cox Automotive, EV sales accounted for 7.8 percent of total sales in the first quarter of this year, a significant increase over their 4.8 percent share during the same period in 2020. And though that increase translates to a relatively small number of EVs actually hitting the road, at least compared to traditional internal combustion engine (ICE) powered vehicles, opinion research and buying patterns show a rising interest in EVs from American consumers.

At least some of that rising interest is attributable to concern about the environmental impact of ICE vehicles, leading some states to take more action to encourage change. The vast majority of states — 45 and the District of Columbia at last count — offer incentives of one kind or another for the purchase of certain EVs, including tax credits, rebates, reduced registration fees, and exemption from vehicle inspection regulations. Those actions have taken a more overt turn in the last two years. California and Massachusetts have recently committed to requiring all sales of new passenger vehicles be zero-emission by 2035, effectively banning the in-state sale of ICE vehicles. New York is poised to follow, with legislation mandating the shift by 2035 passing both houses of that state’s legislature in April 2021. And these states are only the early adopters. Washington, New Jersey, and Colorado have all expressed interested in an EV-only shift, and other states appear poised to follow.

Consumer Comfort Levels One big stumbling block to achieving these aims and in furthering consumer comfort with EVs is charging. Assuming EVs achieve price parity in 2024, as some reports have suggested, there remains the need to achieve “convenience” parity before EVs will be accepted. Consumers have been reluctant to buy EVs because of the range limits imposed by battery life.

Opinion research and buying patterns show a rising interest in EVs from American consumers. A Consumer Reports survey late last year, for example, asked respondents who did not already “definitely” plan to buy an EV for their next vehicle what factors were holding them back. Forty-two percent of respondents identified insufficient driving range. The top response, at nearly half of respondents, was lack of public charging stations, a concept that goes hand-in-hand with driving range.

The American Jobs Plan, as originally unveiled by the Biden administration, included $174 billion to promote electric vehicles and EV charging stations, including $15 billion to install a half a million chargers across the country by 2030. The scaled-down Bipartisan Infrastructure Framework retained about $7.5 billion in funding for public infrastructure devoted to charging, primarily focused on interstates and highways in lower-income and rural communities. That’s good news for consumers who live outside of major U.S. cities, where public charging stations are largely concentrated. While $7.5 billion is a lot of money in an absolute sense, it will be nowhere near enough to install enough public charging stations in all of the 19,500 cities, towns, and villages in the United States, as well as provide adequate coverage across the more than four million miles in the U.S. highway network

. Manufacturers’ Role
This puts auto manufacturers in a challenging position. With the notable exception of a few new EV entrants, auto manufacturers have traditionally engineered and manufactured vehicles, not developed and deployed the means for powering them. However, the push toward EVs may force traditional automakers in that direction, as it has EV-only market entrants.

It may be time for traditional auto manufacturers to take a more prominent position in encouraging the construction of new charging stations. Some EV-only manufacturers have invested in the development of a network of fast-charging stations for their vehicles. In the case of Tesla, part of that decision is driven by the simple fact that Tesla relies on its own proprietary Supercharger system. But the downstream effect of employing a proprietary system is the more fascinating one. Tesla customers, and potential customers, are confident that after a full day of driving they will be able to find a charger when they need one. In other words, instead of focusing only on the vehicle, Tesla also focuses on the bigger picture of what that vehicle and its driver need to hit the road and stay on it.

Traditional auto manufacturers have played a much smaller role in the development and deployment of charging stations, largely ceding the space to Tesla and third-party companies like ChargePoint, EVgo, and Electrify America, some of which have been the beneficiaries of modest investments from traditional automakers. That strategy has worked in a modest way so far; EV sales are up, private investment has stepped in to provide charging stations in the most profitable locations, and public funding for lower-served locations is on the horizon. It may be time, however, for traditional auto manufacturers to take a more prominent position in encouraging the construction of new charging stations, whether through partnerships with third parties or by direct investment in public charging stations.

Prevailing Connection Standards
Wading into the work of more actively ensuring the breadth of the nation’s network of charging stations also would allow auto manufacturers to ensure the charging stations that are deployed meet their own technological needs.

One issue that remains is what connection standard (or standards) for EVs will prevail in the United States. For example, one issue that remains is what connection standard (or standards) for EVs will prevail in the United States. EVs can charge using alternating current (AC) available at homes and offices, and automakers appear to have landed on uniform plug standards for this slower type of charging. But manufacturers have diverged on connection standards for direct current (DC) fast charging, which can recharge the typical EV battery in 30 minutes or less. Japanese EVs use the CHAdeMO standard and German and American EVs use the SAE Combined Charging System (CCS) standard, while Tesla uses its own Supercharger standard.

As of July 2021, the U.S. Department of Energy Alternative Fuels Data Center reported 3,742 public stations with 5,147 CHAdeMO connectors; 3,624 public stations with 6,984 CCS connectors; and 5,650 public stations with 22,191 Tesla outlets in the United States. Whether driven by industry competition or presidential politics, the emergence of a national network of private and public DC charging stations to support long-range driving will be critical to consumer acceptance of EV technology. Traditional auto manufacturers should consider whether it is in their own economic best interest to take more direct action to ensure that happens as quickly as possible.

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