Replacing traditional combustion engine vehicles with electric vehicles is seen as a critical component of transitioning away from a fossil fuel-based economy, but recent proposals for adoption will be difficult if not impossible to reach unless price barriers are lowered for consumers.
During an episode of the O’Neill Speaks podcast, the official podcast of the Paul H. O’Neill School of Public and Environmental Affairs at Indiana University, Professor John Graham outlined what it will take for consumers to fully embrace EVs and their possibilities.
“The tipping point is when you find an automaker who can offer an electric vehicle to the U.S. market for less than $40,000 and make money,” Graham said. “If we can get to that point, you’re going to see this market change very rapidly. The companies that have offered electric vehicles for less than $40,000 have usually not been able to sell more than 30,000 of them in a year. To make money in the car business, you have to sell at least 100,000 of them, so (the companies) are losing money on them.”
General Motors recently announced it would be discontinuing the Chevrolet Bolt, its most popular electric vehicle and second-best-selling non-Tesla branded EV in the American market, a blow to the dream of low-priced, consumer-friendly vehicles. Meanwhile, EV prices, which had been in decline over the previous decade, actually went up last year due to increases in the cost of raw materials used in the lithium-ion batteries that power the vehicles.
A recent proposal from the Biden Administration set a goal of having 50 percent of all new vehicles sold to be EVs by 2030, but Graham suggests a different option may be more realistic.
“From a policy standpoint, one thing that would be good would be to remove the disincentives for a plug-in hybrid vehicle,” Graham said. “There are a lot of families that can meet their needs with a plug-in hybrid. It’s going to be a decade or two before we can get public charging networks to small towns and rural areas of America, but a plug-in hybrid is a pretty good solution.”
Graham said the government proposal focusing on EVs, however, is discouraging manufacturers from investing in the development of plug-in hybrids.
O’Neill Speaks can be found on Apple Podcasts, Spotify, or your favorite podcast service.
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