As EV sales skyrocket across Europe, America needs to think about how it can achieve the same numbers
According to a December 2020 Consumer Reports survey, 7 out of 10 American adults with a driver’s license are interested in purchasing an EV in the future. However, there are still barriers to adoption that are discouraging them from making the switch, including high entry costs and the limited charging infrastructure. Perhaps encouragingly, the story is a bit different across the pond, where consumers are displaying more confidence in EVs.
Scandinavia has always been at the center of technological innovation, so it should come as no surprise that Norway became the very first country in which electric vehicle sales surpassed fossil-fuel-powered cars. In fact, at the end of 2020, electric car sales outnumbered petrol, hybrid, and diesel cars combined, accounting for two-thirds of total sales in the final months of the year and 54 percent for the total year.
Norway was not the only European country to experience a surge of EV sales in 2020; the Netherlands sold 34 percent more plug-in cars in December 2020 than it did in December 2019 for a total of 30,860 vehicles. Plug-ins account for 72 percent of the Netherland’s car market, and 69 percent of those are BEVs. Overall, the country registered 89,362 new passenger plug-in cars, which accounted for 25 percent of the market.
Norway and the Netherlands stand out as leaders in the electrification initiative, but Europe as a whole has witnessed substantial growth, with electric car sales more than tripling in 2020, accounting for 10 percent of total vehicle sales, versus only 2 percent in 2019. That figure is expected to reach 15 percent in 2021.
Meanwhile, EV sales in America increased by only 4 percent in 2020. Although electric sales outperformed the automobile market as a whole, which declined by 15 percent, much of that growth can be directly attributed to the Tesla Model Y, rather than a broader trend. And while sales are projected to continue increasing in the US post-pandemic, the question still remains – what is Europe doing that America is not?
Barriers to Entry
According to the survey, more than 7 out of 10 American drivers want to have more EV choices, an area in which Europe thrives. More than 130 electric models are currently on the market in Europe, compared to 56 in the United States. More electric SUV and pickup options will likely spur adoption in America.
The charging infrastructure will also need to improve for more Americans to purchase EVs. Fifty-five percent of drivers want the government to invest in public fast-charging stations, especially along highways. And while Europe will also need to expand its infrastructure to keep pace with its recent surge in EV sales, Norway’s extensive charging network has effectively perpetuated its transition to electric. The Norwegian government has been ramping up its infrastructure since 2015, when it committed to having at least one fast-charging station every 31 miles along major highways. Today, Norway has more than 15,000 public charging stations.
Sixty percent of US drivers also believe state and federal incentives and tax rebates should be available to consumers to help lower upfront costs. This strategy has been extremely successful in Norway, where there is no purchase tax, VAT, or road tax on EVs, despite the nation having one of the highest tax rates on luxury goods – including cars – in the world. Norway has had this strategy in place since the late 1990s to increase EV production, and it has paid off tremendously.
The European Union has imposed CO2 emissions limits for passenger vehicles, and stricter regulations went into effect at the beginning of 2020, which correlated with the triple in EV sales over the year. CO2 emissions from new passenger cars in the EU are now restricted to 95 g/km, down from 130 g/km under the previous regulation.
It will be nearly impossible for the EU to comply to these new regulations without EVs, and this stringent requirement is sure to accelerate adoption for years to come. While the US also has emissions regulations issued by the EPA, they are not yet this strict at the federal level. Instead, California has been leading the charge to impose stricter regulations, and a handful of other states have adopted California’s protocols. To accelerate EV adoption, the federal government may have to implement uniform regulations rather than relying on patchwork policies across the country.
America’s Best Game Plan America’s EV sales are undoubtedly lagging behind Europe’s, and industry-wide losses induced by the pandemic are not the culprit. If the US wants to catch up to its neighbors across the pond, the federal government will need to issue uniform policies to drive the initiative. Emissions regulations, nationwide tax incentives, and an improved charging infrastructure will accelerate the transition. The interest is already ingrained in consumers. Now, the feasibility just needs to catch up.