EV sales are up, but the road to wider EV adoption will be a bumpy one
You don’t have to look too far these days to find any one of a number of “Chicken Littles” proclaiming that the sky is falling.
To be more specific, the EV sky, that is. To be sure there are plenty of company forecast revisions, plenty of product launch date revisions, plenty of battery and components suppliers recalibrating their investments and/or investment intentions, but does that mean that the sky is falling?
The thing about all of these activities that I find surprising is that they are actually surprising to anyone, except perhaps to some of my friends in the environmental community.
These folks always seemed to believe that the transition to zero emission vehicles was going to be akin to the theme of the movie “Field of Dreams” — that is “if you build it, they will come.”
The thinking, of course, has traditionally been that if only vehicle manufacturers had EVs available they would be all snapped up by eager consumers as quickly as they could be built resulting in the steep, unfaltering upward curve of EV adoption. But that’s not how reality has panned out, and again I ask, why is anyone surprised by this?
The “one step forward, two steps back” in the ZEV ecosystem that we are witnessing now is society trying to find its legs to appropriately cross the chasm of ZEV innovation adoption from the Early Market to the Mainstream Market.
Sure, the innovators and early adopters salivated at the opportunity to get into an EV — any EV. Many buyers had their names on multiple waiting lists prepared to sign on the dotted line with whichever manufacturer could get them an EV the fastest.
It didn’t necessarily matter the colour, the options or even the price for this cohort because it was all about adopting the latest and greatest technology.
Nor did it matter how long it took to charge on the road (you can always read a book or do some work) the cost of installing a home charger, or the extra time and inconvenience it took to find charging infrastructure and more importantly charging infrastructure that worked (you just need to plan out your trip ahead of time and there are apps that can show you which charging stations are operational and which are not).
But, these folks are not the vast majority of consumers according to the Rogers and Moore Technology Adoption Lifecycle Model, which is essentially a sociological model that maps out the consumer adoption of any new technology.
Visually it is a bit of a segmented bell curve with five segments. The first two segments, the innovators and early adopters, in fact, represent collectively about 16 per cent and are referred to as the “Early Market” according to that model. Conversely, the early majority, the late majority and the laggards comprise the “Mainstream Market” and represent the other 84 per cent.
Now, many are suggesting that we are growing the EV market beyond the innovators and early adopters and into the early majority of purchasers.
However, another component of the model that I have not mentioned is the gap that exists between the segments that comprise the Early Market (the innovators and early adopters) and the Mainstream Market (the early majority, the late majority, and the laggards).
This gap in the model is called the “chasm” and it is very challenging in the adoption of new technology to be able to figure out how to cross the chasm, because the wants, needs and desires of those in the Mainstream Market are significantly different from those in the Early Market and this is what is leading to the bumpiness in the movement up the curve of EV adoption.
Despite what the federal government and the government’s of British Columbia and Quebec may believe, at the end of the day ZEV adoption is going to come down to one thing and only one thing — the consumer — not the zero emission vehicle mandates that each of these jurisdictions have in place.
More than 75 different model variants of BEVs and PHEVs are available in Canada currently. Availability for most ZEVs is not the challenge it once used to be, but the “one step forward, two steps back” in the ZEV ecosystem that we are witnessing now is society trying to find its legs to appropriately cross the chasm of ZEV innovation adoption from the Early Market to the Mainstream Market.
The consumers in each of those markets are very different with those in the Mainstream Market being much more pragmatic than the risk takers in the Early Market. Those in the Mainstream Market need to more often be convinced of the merits and benefits to them of adopting the new technology.
Paying more money upfront for the new technology with constant awareness from all quarters that charging infrastructure isn’t where it necessarily should be to support fueling in the way they need it, when they need it and where they need it does not inspire those in the Mainstream Market to want to go out and purchase a ZEV.
The incentives will be necessary to convince the pragmatists to rationalize the move to adopt the new technology.
It does not help that the two provinces with the most aggressive ZEV mandates in North America have also scaled back purchase incentive eligibility (B.C.) or laid down the track to eliminate the incentive (Quebec).
The incentives will be necessary to convince the pragmatists to rationalize the move to adopt the new technology. So, to the extent that the technology doesn’t make their lives easier or better in some regard, it is a much tougher sell.
All of that said, let’s be clear about two things: ZEV sales are growing and manufacturers are fully committed to decarbonize their vehicle fleets.
There are about 1.5 trillion reasons why there is no going back for the industry. But this transition is entirely new for everyone, and manufacturers could also be accused of overestimating consumer uptake of ZEVs and are now having to recalibrate plans as a costly consequence.
Nonetheless, in the second quarter of this year ZEV sales grew 37.9 per cent from the same period last year and represented 12.9 per cent of vehicles sold compared to 10.1 per cent for the second quarter in 2023, according to recently released Statistics Canada data.
The problem is that ZEV sales are not growing fast enough to meet the stringent targets under the ZEV mandate programs. We will get there, but just not on the hard target dates outlined under the ZEV mandates.
Unless adjustments are made by governments in this regard there is going to be a day of reckoning for industry and, consequently consumers which will in all likelihood result in a smaller overall automotive market in Canada and higher prices for vehicles — both of which should be avoided for the sake of our economy and Canadian consumers.
