Will consumers afford EVs before permanent climate change?

Consumers are concerned about climate change, but they’re also conscious of their bank balances and the overwhelming price of an electric vehicle (EV), and the cost of using the relevant infrastructure, is likely what holds them back from switching. 

While consumers across the globe anticipate their next energy bill, it’s likely they’ll also be phased by the cost of charging an EV. In the UK, this is despite the energy price guarantee (EPG), which is set at 34p per kWh.

Although the cost of fuel has increased to record highs, almost doubling on average since the low 99p prices back in 2016, charging is also rising, with small city cars now costing up to 10.5p per mile, medium-sized vehicles and compact SUVs up to 12p, and full-size SUVs reaching 14.2p—and days have passed when Brits could charge up at their local Tesco supermarket for free. 

In the US, it costs up to US$30 using a level 3 charger, and prices can vary between each one, but consumers are judging the performance of EVs from a different angle—range. Previously, the cost of operating an EV was its selling point aside from the overarching sustainability aspect, but with prices increasing, the weigh-up comes from the potential range of a car, but also the speed at which it can be charged. 

This begs the question: Is it feasible for consumers to drive EVs in the current economic climate? Will the argument for electrification work in its favour? 

Data from the Internal Energy Agency’s Global EV Outlook 2022 suggests something positive over the past few years, recording that, in 2021, the total number of light EVs on the road exceeded 16.5 million, the majority of them in China and Europe. 

This growth was helped by further use of hybrid-electric vehicles (HEVs) as almost half of those adopted in Europe, and almost a third of those in the US, were of this kind. 

Are carmakers building too many ICE vehicles?

The automotive giants have significant roles to play in proving EV benefits. With capabilities for higher vehicle output, the majority of leading companies want to direct their efforts towards manufacturing more sustainable vehicles—many of them are  succeeding. 

Stellantis soon electrified its Fiat 500 model, which is known to be one of the cheapest light EV models to run. The car even took the lead for European EV sales from Tesla. However, the pioneering mass-production EV manufacturer still attributes much of its success to the efficiency of its Model 3, which is one of the cheapest to run in its medium-sized EV category. 

But the excitement of electrification often takes away the focus from the underlying concerns of fossil-fuel-powered cars as it’s believed that some of the largest carmakers are producing too many for the planet to handle. Research collated into a Greenpeace report suggests that there is only 53 gigatonnes of carbon budget left (the amount of emissions that can be produced before the point of no return). 

The carbon budget is enough for 315 million ICE vehicles at most, but according to the projections of the leading manufacturers (the likes of Toyota, Volkswagen, Hyundai, and General Motors (GM)), the total is expected to reach between 645 million and 778 million cars. 

There are too many ICE vehicles in the pipeline, and alternative vehicles are required fast, so will automakers be able to shift their attention to the consumer in order to decarbonise?