As we enter the beginning weeks of 2022 a number of significant developments are occurring in the electric vehicle (EV) segment of the auto industry.
These and other recent trends prompted us to prepare this review of the short-term outlook for EV’s and their supporting infrastructure. We also consider how each trend might affect business owners who install charging stations for the use of their customers or tenants.
In the next 12-24 months, we can expect the following:
The Infrastructure Bill Will Fund Thousands of Charging Stations
Signed by the President on November 15, a new infrastructure investment bill provides $15 billion for. This is split roughly in half: $7.5 billion for EV buses and ferries, and $7.5 billion for a nationwide network of up to 500,000 charging stations along major highways.
What This Means For You: One obstacle to widespread adoption of personal EV’s has been concerns about access to charging stations on long road trips. A nationwide network will make these trips as easy as in a gas-powered car, making EV adoption an easier sell and generating more need for your own stations.
EV Adoption is Likely to Surge
Congress is also considering the Build Back Better bill, an omnibus that includes tax credit programs. One provision is an increase in the tax credit for EV purchases, raising it to $12,500 for new vehicles and $4,000 for used models.
What This Means For You: The cost of EV’s is already trending down, and this initiative will drive the real cost to the owner far below the sticker price. More of your customers will be driving these vehicles and in need of charging stations.
Manufacturers Will Continue to Go All In
Mainstream car companies are rolling out more EV models, and GM, Hyundai, and Volkswagen have all committed to electric-only production by 2035. Many of these rollouts include major steps forward in capability and/or marketability, such as GM’s Ultium batteries, which cost 40% less to produce than the previous generation while delivering a 400-mile range.
What This Means For You: This will be another adoption boost. As more potential owners see cars that cost less, do more and are the type of vehicle—sedan, minivan, light truck, SUV, etc.—they like to drive, more will consider and buy EV’s. You’ll benefit from the massive marketing presence of household name auto manufacturers.
For a Year or Two, Production Will Be Slowed
EV manufacturers are dealing with the same supply chain issues that have affected gas powered vehicles, especially a shortage of microchips. This has led to production being suspended temporarily at some plants, including two of Volkswagen’s facilities.
What This Means For You: Though this may slow down an EV purchases for the individual buyer, it will likely not slow EV adoption significantly any more than microchip shortages have made buyers less interested in gas and diesel cars.
The EV Driver Demographic Will Expand
The largest segment of current EV owners (43%) are in their prime earning and spending years (24-54 years of age), and the top demographic are men whose households include a wife and young children, with multiple vehicles. With growing adoption and robust financial incentives, it’s far more likely that those multiple vehicles will be EV’s, adding more women to the ranks of EV drivers. In addition, these incentives will push the minimum income and age of first-time EV purchasers downward and make them easier for older citizens to afford.
What This Means For You: Wider adoption means your potential EV driver customer is from a larger pool than before, and more likely to be making daily family purchasing decisions. These trends will also skew the pool of owners younger, but even young EV owners will usually be in their prime earning years.
If you’re ready to take advantage of this new wave of change, or even just have some questions, we’re glad to be your advisers. Get in touch with Thayer Energy Solutions, and we’ll help you create a strategy to power you to greater profitability.