Hooman Shahidi is CEO and cofounder of EVPassport, a technology-driven, EV charging hardware and software platform.
The recent buzz about the electric vehicle (EV) market has been pretty grim, with research organizations, media outlets and others suggesting that the industry is starting to spiral downward. Some have pointed to a recent slowdown in vehicle sales, falling prices and workforce reductions at EV leader Tesla as evidence that the EV boom is over.
But I think this approach is misreading the market. It fails to grasp that as the EV industry evolves, with the emergence of next-generation companies and changing behaviors among consumers, the methods for judging and measuring the market have shifted. It’s time to evaluate EVs through a capitalistic lens, considering things like competitor growth, business opportunities, evolving customer needs and the market’s potential.
Outdated Perceptions Drive Misconceptions
Those saying the EV market is fading have noted several developments during the industry’s underwhelming start to 2024. And taken on their own, the signs aren’t good: First-quarter sales overall were pretty flat. Tesla reportedly laid off about 14% of its workers, and Ford scaled back some of its EV expansion plan.
However, sales weren’t down across the board. In fact, in the first quarter, four of the biggest EV makers in the United States saw year-over-year sales grow by more than 50%. And Ford saw an 86% increase in EV sales. While the market is fluctuating, it’s easy to cherry-pick disappointing developments among established, seemingly monopolistic companies and use that to define the state of the market. But that’s a poor indicator of the industry’s overall health. The reality is that the EV industry is in the midst of a moment that is driving innovation.
The industry is growing from within because vehicle manufacturers and infrastructure companies are introducing new products and services that solve many of the problems caused by first-generation companies. In the process, they are taking market share, revenue and profits away from more established companies. This is the capitalistic moment—the agility of next-gen organizations and the evolution of consumer practices are changing the market by creating new business opportunities.
The Evolving Consumer
Consumers are developing a practical mindset when it comes to EVs. Rather than fixating on the apparent convenience of gas-powered vehicles and dismissing EVs out of hand, drivers are embracing the differences and recognizing the benefits of EVs.
A few factors are encouraging them to look at EVs in a new light, including expanded tax credits, a growing variety of EV models and MSRPs for some vehicles that are 25% less than the national average for a gas-powered car. And studies have found that operating an EV costs less than operating a gas-powered car. From a consumer viewpoint, owning an EV is just good business, and drivers are showing a willingness to implement behavioral changes to reap the benefits of getting behind the wheel of an EV.
A prime example is in how they charge their vehicles. The traditional approach—for as long as there have been internal combustion engines—is to drive a vehicle until the tank is just about empty, then fill it up at a gas station. EVs aren’t traditional cars, however, and people are adopting a new approach, treating battery-powered EVs like a cell phone and keeping them charged while on the go.
When was the last time you left the house with your phone’s battery at 1%? Rather than concerning themselves only with whether the fuel gauge reads F or E, many drivers are using destination chargers to top off their EVs whenever they have the opportunity, such as when shopping, visiting a restaurant, going to the movies or working at the office.
The industry needs to continue expanding the availability of charging stations, striking a balance between supercharging stations and destination charging as more drivers shift their charging mindset and forgo the traditional gas station approach.
The Road Ahead
The EV industry is long past the startup phase; it’s an adolescent market poised for another growth spurt. A fundamental component of this evolution is behavioral change, which applies even more to manufacturers than consumers. Organizations need to look past the issue of convenience and work to make customers’ lives easier through a personalized experience—whether driving or charging—that adds value to their day-to-day lives.
I think the biggest challenge is education—helping companies understand what consumers need, informing drivers about how they can utilize next-generation infrastructure and advising third parties on how to generate new forms of ancillary income and create new opportunities for their organizations.
Recalibrating our perception of the EV industry could create cascading benefits throughout the economy. By embracing where the market is, companies can create more jobs, generate more consumer savings and introduce opportunities for innovative, customer-centric businesses to thrive by disrupting traditional approaches to transportation, infrastructure and customer service.
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