Correction: In the original version of this post, David Townsend’s title was listed as assistant professor of economics.
With $300,000 invested and 29 charging stations installed, Raleigh is poised to embrace a new wave of electric vehicles. Whether that wave is really coming, though, is still a question for the fortune tellers.
Transportation leaders from across eight states gathered in the capitol city last week to discuss how they might grease the tracks for the anticipated advent of the electric vehicle or EV.
While they weren’t sure of the strategy public agencies should employ to get more EVs on the road, how much the electric car makes sense was not up for debate.
It costs around one-fourth as much to charge an EV as it does to gas up a hybrid. EVs have a higher purchase cost than gas cars. But depending on a person’s monthly gasoline bill, in some cases, an electric vehicle would result in a lower monthly total vehicle bill.
Not only do EVs reduce greenhouse gases and make the air we breathe cleaner, they reduce the nation’s dependence on foreign oil—the most critical component in guaranteeing national security, according to the Department of Defense.
EVs also help utilize the power grid. Power stations are built to handle peak capacity, which happens during the day. That means at other times, power plants aren’t running nearly as hard as they could.
“The economic drivers are there. The technology is ready,” said Jeff Barghout, the Director of Transportation Initiatives at Advanced Energy in Raleigh.“All the stars, in essence, have lined up more than with most other technologies.”
Around 30,000 EVs have been sold in the U.S. in the past year, according to Judi Greenwald with the Center for Climate and Energy Solutions.
That’s faster than the Prius sold when it hit the market, she said.
Perhaps the biggest incentive pushing sales is a $7,500 federal tax credit.
That puts Mitsubishi’s EV at less than $22,000. Versions from Chevy, Nissan and Ford come in anywhere from the high 20s to the low 30s. And Tesla, which makes a range of Evs, starts at around $50,000 after the tax credit.
Baseline EVs tend to get around 100 miles per charge. Most batteries take around six or seven hours to charge from empty.
EVs became widely available in North Carolina last fall and the NCDOT currently estimates that 293 electric cars are on the road statewide.
That’s about one percent of the national figure, no small sum considering most plug-ins are sold on the west coast.
Wake County is home to 132 of those cars, according to the DOT. Only three other counties—Durham, Orange and Mecklenberg—even have EVs registered in the double digits.
Crossing the Chasm
“In Silicon Valley they joke about the ‘20-year, overnight success,” said David Townsend, an assistant professor of entrepreneurship at NC State University.
The theory goes that a product might be on a relatively steady course of growth, but at a certain point that growth looks more like an explosion.
If EV sales double each year, it might not be noticeable as we approach 60,000, 120,000 and 240,000 but when the volume gets big enough, growth can have the appearance of an overnight explosion.
Right now, electric cars are only being purchased by what economists refer to as “early adopters.”
“In general, they only represent about 13 to 14 percent of the market,” Townsend said.
The next step for electric carmakers is breaking into the “early majority,” who, Townsend said, represent another 34 percent of the market.
“The difficulty for tech companies is getting to the early majority,” Townsend said. “Most companies fail at this stage.”
For early adopters, tech companies don’t need to provide practicality, just novelty. It’s the opposite for the early majority.
“At this stage I don’t know if [the carmakers] have a selling enough proposition for the early majority,” Townsend said. “I think price points would have to come down … People still have concerns like ‘Where can I charge my car? How far can I drive?’”
As far as the “where can I charge my car” proposition goes, initiatives like Raleigh’s can have a major impact in consumer confidence, he said.
Matching the Private and Public Investment
The best thing government organizations can do to not get their heads below water is continue to match the investment of businesses and the public, said Greenwald, who facilitated the summit.
Based on the number of EVs in Wake County, Raleigh’s investment stands at around $2,000 per car on the road. Raleigh taxpayers have only footed $125,000 of the cost for infrastructure so far. The rest of the $300,000 has come from federal grants.
Map of Raleigh Electric Car Charging Stations
The city has also added around a dozen electric vehicles to its fleet. Some businesses, like Progress Energy, have done the same thing.
Progress is currently partnering with the city to test a solar-powered charging station adjacent from the convention center. It’ currently generating enough power to actually add back to the grid.
In Greenwald’s mind, the best thing Raleigh has done is streamline regulations. The Center for Climate and Energy Solutions recognized Raleigh for making it easier for EV owners to get a permit to install home chargers.
“We want to be sure that our community, from a regulatory standpoint, makes it as easy as possible [to own an EV],” said Assistant City Manager Julian Prosser. “We’re not part of the bureaucratic problem; we’re part of the bureaucratic solution.”
Other public agencies across the country have bet bigger.
“We’re at the tipping point with our fingers crossed, hoping this thing is actually going to take off,” said Art James of the Oregon DOT. “We hope we’re doing the right thing [by building infrastructure] and we’ll keep doing it until somebody tells us to stop.”
For Now, a Niche Market
It’s still early in the process, admitted Greenwald.
“Electric vehicles are a reality,” she said. “But they are a small reality at this point. It takes a long time for new technology to penetrate the market.”
Jeff Barghout designed electric cars in the 90s. He thinks this time around, it’s not a question of if, but when.
“It’s coming,” Barghout said. “Every major auto maker has said this is the direction they are going.”
And according to Townsend, the economist, it’s the major automakers that have the most to lose.
If EVs don’t catch on fast enough it could put the major automakers, who have invested a great deal of production capacity, in a cash flow bind.
“In that sense, Tesla may be the best positioned,” Townsend said.“If I were betting on the individual car companies, I don’t think any are a safe bet. But I think the technology makes sense.”
Whether we’ll get from that day to a time when electric cars are plugged in at every street corner, is still up in the air.