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article imageWhy are most electric vehicles still unprofitable?

By Tim Sandle     Sep 25, 2020 in Business
The growth in electric cars has not been as great as some market analysts have predicted. A new study shows that prices have been cut but demand has yet to compensate for the price reduction.
The automotive industry, as with other sectors of the economy, is under pressure to reduce emissions, both from government regulations and from consumers who are growing more conscious about the environmental impact of their vehicles. Electrified powertrains are a promising avenue to reduce or eliminate vehicle emissions for automakers.
According to a new Lux Research’s report, “The Electric Vehicle Inflection Tracker: 2020 Edition,” most of automakers’ attention has been focused on making battery electric vehicles (BEVs) that are profitable while addressing consumer pain points related to charging speed and range.
An electric vehicle can be powered through a collector system by electricity from off-vehicle sources. Alternatively, vehicles can be be self-contained through the use of a battery, solar panels, fuel cells or an electric generator to convert fuel to electricity.
The research reveals that the typical electric vehicle price declined to $33,901 in 2019 compared to $42,189 in 2016. At the same time, the range of vehicles on offer increased at 13.7 percent (on average, year-on-year since 2011).
Despite the drop in price, the take up of electric vehicles has not been as greater as expected. The fundamental reasons for this, according to the research, are 'range anxiety'. This is the fear that an electric vehicle will not have enough range to complete all or most trips consumers need their vehicles to make. The second area is 'charge time trauma'. This is the concern that a vehicle will take too long to charge, potentially stranding electric vehicle users on the road for extended periods of time.
In order to push electric car taken up further, these are the types of issues that car manufacturers need to contend with. In other words, efficiency will need to emerge as the next big focus in electric vehicle design.
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