Viewpoint: US EV adoption remains a distant vision

Lower fuel costs, higher vehicle costs and 'range anxiety' caused by a lack of refueling infrastructure will likely continue to curb widespread use of electric vehicles (EVs) in the US.

EVs — including all-battery powered cars and gasoline-battery hybrids — have become less attractive in recent years as lower fuel costs and increased fuel efficiency among traditional vehicles have cut how much US drivers spend on gasoline. The average annual US household fuel spend has dropped since the 2008 peak of $2,715, according to Energy Information Administration (EIA) data. It has hovered near $2,000 between 2015 and 2017, according to Bureau of Labor Statistics (BLS) data, accounting for about 2.5pc of mean household incomes.

Even during times of lower gasoline prices, EVs are typically more economical from a fuel efficiency perspective. A 2018 study by the University of Michigan Transportation Research Institute found that the average annual cost of driving a gasoline-powered vehicle in the US was $1,117 in 2017 while the average annual cost of driving an EV in the US was just $485. Gasoline-fueled vehicles would need to exceed a fuel efficiency of 57.6mpg for them to be a cheaper alternative to EVs, according to the study.

But even with better fuel economy, the adoption of EVs in the US has been gradual at best. Between 2012 and 2017, EVs accounted for just 2.5-4pc of total light-duty vehicle sales per year, according to EIA data. During that same time period, the number of EV options on the market grew from 58 to 95.

Resistance has also stemmed from sticker price. The average transaction price (ATP) for an EV in the US was $63,857 in November 2018, according to Kelly Blue Book data. Including EVs, the ATP for all light duty vehicles was nearly 45pc lower than that at $36,978. This price difference more than negates the increased fuel efficiency of EVs.

The US' relatively new status as a net exporter of crude and refined products, coupled with lower retail gasoline prices, means domestic gasoline demand and consumption is expected to remain unaffected by the light duty EV market — at least until EV prices are more comparable to traditional combustion-engine counterparts.

Retail gasoline prices are expected to average $2.50/USG in 2019, according to EIA data, down by 23¢/USG from the 2018 average. Motor gasoline consumption is expected to rise by 0.6pc to 9.4mn b/d.

Consumer concerns over a shortage of public locations to refuel EVs may be partially addressed through efforts by companies such as the Volkswagen subsidiary Electrify America (EA), which was created as part of its settlement of charges of emissions test cheating. EA plans to invest $2bn in EV recharging infrastructure, access and education programs in the US by 2027, with $800mn earmarked for California.

Eventually, EA plans to build a national system for zero-emission vehicles (ZEVs) that will include charging stations no more than 120 miles apart, with an average distance of 70 miles in between each. EA hopes to partner with convenience store operators for this eventual rollout, partially to offset with longer wait-times for recharging compared to gasoline refueling. Between 12 and 15 minutes are needed to fully charge an EV with the most powerful chargers, according to EA data, compared with the three-to-four minutes needed to fill up a petroleum-based engine. Factoring in the time drivers would spend inside a c-store, EA said the additional time should not be a significant deterrent for more EV ownership.