The Slope of EV Enlightenment

The federal credit for EVs expired at the end of September. Paradoxically, this deadline caused a spike in EV sales—well, for everyone except Tesla, which is still reeling from Elon’s antics earlier this year—though prices and volumes remain depressed compared to the peak of EV excitement a few years back. It’s a continuation, albeit less acute, of the pullback on electric vehicles that began last year, not the least of which is reflected in those cars’ brutal depreciation.

But given that car manufacturing and research cycles are measured in years and decades, the forward-looking indicator to look for isn’t current EV sales, but what carmakers are now investing in for their next generations of vehicles. The signs are mixed: Toyota and Honda have pulled back from their previously aggressive plans to electrify their fleets1, BMW is still producing and iterating on its iX series, while Mercedes is discontinuing its underperforming EQ line but will hedge against a future beyond combustion engines by outfitting their mainstay cars with electric drivetrain options. Pretty much all of the major car companies have released an EV or have dedicated a subbrand or line to electricification.

At the same time, the newer generation of automotive manufacturers is EV by default. Tesla’s success as the first American car company to scale in almost a century had inspired a multitude of transportation startups around the world. Though most have already failed in the US, a handful—Rivian and Lucid come to mind—are left standing, and there are still some attempts to try something new, like the Slate Auto modular truck. Meanwhile, the number of car manufacturers in China has exploded this decade2, and their industry has seen success both domestically and abroad. The Chinese auto manufacturers now comprise some 70% of global production of EVs, though they’re conspicuously absent on US roads as a result of tariffs and federal regulations, plus persistent lobbying from their American counterparts.

All this suggests that we’re making steady, albeit no longer exponential, progress towards vehicle electrification—the “slope of enlightenment” part of the Gartner hype cycle. Electric motors and drivetrains are commodities, and battery tech has come along far enough now that their costs constitute a small premium over their combustion engine cousins, but firmly priced to the mainstream instead of the early adopter crowd. Range has also improved from the early Chevy Volt and BMW i3 days; carbuyers have been looking for 200+ miles of range per charge, and carmakers have repeatedly iterated their engineering to finally, consistently satisfy that requirement. Our charging infrastructure is slowly but steadily improving; it helps that charging stations are easy to set up and maintain, and the gradual standardization around the NACS port can only help accelerate the transition.

As with credit cards and digital payments, where the incumbent technology is already established, the upstart new tech has to be many times better to make inroads. Conversely, areas that have gone without the precursor network can leapfrog directly onto the new systems and avoid having to compete with mature technologies altogether. Contrast how, in the US, digital wallets took many years to ramp up to significant use when credit and debit cards were usually just as easy to use, while mobile money networks like M-Pesa in Kenya spread virally as it became the central network for an underbanked population.

So it was probably overly optimistic to expect that EVs would steadily grow in adoption and rapidly overtake fossil fuel vehicles in volume and market share. Americans have built a strong car culture—for commuting, road-tripping, racing, and all manners of utility—and our resistance to EVs blends economical, political, practical, and cultural factors into a simple contrarianism. Every new vehicle and technological advancement, though, removes another tradeoff or disadvantage for electric cars, and we will eventually reach that next phase in the product adoption curve.