Video: How to accelerate the adoption of electric vehicles

Watch EY leader Steve Patton discuss what can be done to speed up the adoption of EVs, and how infrastructure can support this transition.

In brief

• Adoption of electric vehicles (EVs) offers a rapid path towards providing more sustainable mobility.
• With growing consumer demand for EVs, sectors need to collaborate to smooth the transition.

As tech makes its way into every industry, many are focused on the automotive industry and electric vehicles (EVs). With every major car manufacturer starting to roll out EVs, there are a lot of questions about what the future will look like, with regards to adoption and regulation of these vehicles as well as the impact on the climate. There are four major determinants: product availability, consumer demand, government regulation and infrastructure.

Right now, the EV is a status symbol because of the high sticker price, but the economics are becoming vastly more favorable for mass adoption. If you look at the car manufacturers, they are introducing enough vehicles over the coming 18 months to more than double the current product selection. EY’s Mobility Consumer Index study indicates that 41% of consumers globally and 28% of American consumers who plan on purchasing a vehicle in the next 12 months will consider an EV.

Another consideration is infrastructure, including locations where EVs can be charged. Today, you see gas stations everywhere, but not charging stations. The early infrastructure has been focused on in-home charging and in some cases parking garages or retail points. While individual consumers are important in the long-term transition to EVs, the transition will be more concentrated in corporate fleets rather than passenger vehicles. Fleet transition makes sense from both an environmental and financial perspective; owners can buy in bulk, have predictable milage rates and can charge in a central location. All these factors plus government incentives will lower costs of fleet ownership and the cost of EV batteries.

Cross-sector collaboration will be key in leading the transition to EVs; governments and private industry must collaborate, with incentives driving both demand and supply. The ecosystem surrounding EVs is forming incredibly fast. With petrol-based vehicles, we had about 100 years to get our system in place, but now, you must convert to EVs in a fraction of that time. Governments will have to support through regulation as well as incentives to purchase or create new vehicles.

When it comes to the future of EVs, sustainability and financial viability must co-exist. Many of the business model challenges that EVs present to us today are based on the current state of technology, however, we are making enormous strides in the technology, application, and efficiency. By 2024, it is estimated that we are going to be at an 85% reduction of per kilowatt-hour costs for batteries.