It’s time for the famously difficult sophomore album. Since most automakers have at least one all-electric vehicle on the road today, attention is turning to the follow-up(s).
Electric vehicles didn’t exactly go triple platinum on their debut. There’s plenty of room for improvement, and major automakers are doubling down on EV strategies in the hopes of finding mainstream success this time around. Think: more Beyoncé, less Solange.
“We are fully committed to an electric future. We’re investing heavily because we believe that it’s important for the brand and also for the planet,” says Daniel Weissland, president of Audi America. Globally, Audi plans to have 12 fully electric vehicles in its lineup by 2025.
Audi’s sophomore album is the e-tron Sportback, recently unveiled at the Los Angeles Auto Show. It’s a sleeker, fastback electric SUV with slightly more range (an estimated 350 kilometres) compared to the first e-tron. To date, Audi has delivered nearly 20,000 electric vehicles to customers.
This year has also seen the debut of second or third EVs from Ford, Volkswagen, Volvo/Polestar, BMW, Mini, Honda, Porsche, Hyundai and others. With many automakers promising more electric models and much higher sales by 2025, the next few years will see the biggest wave of new EVs yet.
“It's fair to say that we've moved beyond the environmentally-committed and high-performance demographics; there are increasingly a lot of pragmatic people choosing EVs,” says Matthew Klippenstein, a Canadian EV market analyst and founder of the consulting firm Electron Communications.
1. Government incentives boost sales
In Canada, sales of EVs and PHEVs spiked in May, 2019, as soon as the $5,000 federal incentive program kicked in, according to Klippenstein’s data.
“Federal incentives have certainly helped,” he says. “There’s definitely been a step change in sales, as the rebates help put [zero-emissions vehicles, or ZEVs] within the sticker-price reach of more car buyers”
2. Price is still the key consideration
For many people, the price is still too high for electric vehicles. It can be double what you’d pay for a similar gas-powered vehicle (see Hyundai Kona or Chevrolet Bolt).
The hefty price premium for EVs is still the biggest concern among consumers, according to a 2018 Deloitte study (the second and third biggest concerns being a lack of charging infrastructure and driving range, respectively).
VW has said it will soon offer EVs that match gasoline cars in terms of total cost of ownership over the lifetime of a vehicle, although we’ve yet to see proof.
3. Drivers want more choice
Audi’s Daniel Weissland says that offering a wider variety of EVs will push sales growth. Consumers still have relatively few options, but that will change over the coming years.
“We got a lot of positive feedback around the globe. Obviously, there’s demand for more, for different [electrified] vehicles or different derivatives,” Weissland says. “You have to offer different segments for different customers. And that’s what we want to do.”
After the e-tron Sportback, Audi’s e-tron GT sport sedan will arrive in 2021.
BMW, too, will offer a steady stream of new EVs, starting in 2020. “We will also provide new, fully-electric vehicles: next year, the iX3, and following in 2021, the iNext and also the i4,” says Pieter Nota, a member of BMW’s board of management, during an interview in L.A.
4. Popularity varies by region
“I wouldn’t talk about the U.S. market as one homogenous market,” Nota says. “We see quite a lot of difference across the U.S.”
California and East Coast cities are where demand is highest.
Quebec is the largest market for ZEVs in Canada, followed closely by Ontario, according to Klippenstein’s data. While Alberta and B.C. have populations of 4.4 million and 5.1 million, respectively, ZEV sales in B.C. are nine times more than in Alberta.
The extent to which customers prefer EVs, PHEVs or combustion engine vehicles in a given region depends on charging infrastructure, tax incentives and regulations, Nota says.
5. Better safe than sorry on batteries (or why cars don’t have more range)
“Given that batteries degrade over time and concerns about range anxiety with early electric vehicles, I think OEMs would prefer to be conservative with their range estimates,” Klippenstein says.
Unlike phones, cars need to work reliably for 10 or more years.
“The solution?” Klippenstein says. “Aim for a nice, round range number and give yourself plenty of ‘margin of safety’ to ensure that the customer always gets at least what’s promised.”
Any company would want to avoid the controversy Tesla currently finds itself in. The NHTSA is looking into owner complaints that Tesla remotely reduced the range of some older models, as well as other potential battery defects.
6. Profitability is key moving forward
“It was also very heartening having Ford explain at its Mustang Mach-E unveiling that the vehicle would be profitable from Day 1,” Klippenstein says.
As fuel economy and emissions targets ratchet up around the world, automakers need to sell more EVs, and are therefore having to find ways to make EVs both popular and profitable – hence the sudden rise of the electric pickup and a greater variety of electric SUVs, from Audi’s e-tron Sportback to Volvo’s XC40 Recharge.
7. It takes time to work out the kinks
Every automaker, big and small, putting electric cars into mass production has faced delays and setbacks. Sometimes, it’s a supply-chain or quality-control issue, but the fact is, it’s very difficult to make electric cars after a century of gasoline ones. They say practice makes perfect, so you can be sure the next wave of electric vehicles will be better (and more affordable) than the first.
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