Wednesday, September 4, 2024

EVs go the distance

Thanks for reading Hyperdrive, Bloomberg's newsletter on the future of the auto world.Electric vehicle detractors often point to their drivi

Thanks for reading Hyperdrive, Bloomberg's newsletter on the future of the auto world.

Winning Over Active Drivers

Electric vehicle detractors often point to their driving-range limitations compared to internal combustion engine vehicles, and the still-limited access to charging infrastructure in many parts of the world.

But in markets where EVs are establishing an early foothold, there's a growing body of evidence that EVs are winning over the most active drivers, and racking up more kilometers on an annual basis than internal combustion engine vehicles.

In China and the Netherlands, the trend is particularly strong, with battery-electric vehicles traveling 66% and 56% more than ICE vehicles, respectively.

In less mature EV markets, the trend isn't as clear.

In the US, for instance, BEVs are driven about 40% less than ICE cars, while plug-in hybrid electric vehicles do 5% fewer kilometers, according to a 2023 study by George Washington University. That said, the standout state in the US for EV adoption – California – has EV usage numbers closer to what can be observed in markets like Sweden.

The busiest drivers are choosing EVs

The driving range of fully electric vehicles has been steadily increasing, closing the range gap with ICE vehicles. Charging infrastructure is also increasingly available.

However, the most likely motivating factor in EVs traveling further each year is that, on a per-kilometer or per-mile basis, EVs are cheaper to power. This offers the most active drivers the largest incentive to go electric, as they save the most money.

Higher-mileage vehicles, such as company cars or models used by ride-hailing drivers, have switched over to electric at rates that far exceed the general population. In China, for example, 87% of vehicles purchased by ride-hailing and taxi drivers last year were EVs.

There are other reasons these types of vehicle users would be more inclined to buy electric, such as tax incentives on electric company cars and road-use tax exemptions for working drivers in EVs that ICE drivers can't access. But the improved economics are a powerful motivator.

Driving is easier with assistance

Users of driver-assistance features, such as adaptive cruise control, autosteer and branded packages like Tesla's Autopilot and Ford's Co-Pilot 360 have reported doing more long-distance travel when these features are active.

While the impact of these features on local travel is less significant, EVs with driver-assistance capabilities tend to be driven further on an annual basis. Tesla vehicles, for instance, were driven around 27,000 kilometers last year in the UK and the US, almost double the distance of other EV brands.

In China, EVs that are marketed heavily on their digital features, such as Nio, Xpeng and Li Auto, drive around 20,000 kilometers per year, which is around 60% more than ICE vehicles.

BYD seized a lot of attention when it unveiled a new plug-in hybrid back in May that it said would be capable of driving more than 2,000 kilometers (1,250 miles) without recharging or refueling. But the way people are using EVs that are currently in the market seems to indicate that range may not matter as much as people think.

It could be that for most drivers, purchasing a car is not about the size of the battery — it's how you use it.

— By Andrew Grant

News Briefs

Before You Go

Volkswagen CEO Oliver Blume. Photographer: Krisztian Bocsi/Bloomberg

When Oliver Blume took charge of Volkswagen two years ago, the company veteran was seen as a peacemaker after the tumultuous tenure of his predecessor. This week, the CEO embarked on a collision course with VW's powerful unions — a path that's toppled previous bosses of the German auto giant. On Wednesday, Blume will get the first taste of the wrath triggered by a plan to potentially close factories in Germany and end job guarantees that date back to the 1990s. In the cavernous halls of its main factory in Wolfsburg, Blume will be present at an employee assembly and give a short speech in what's likely to turn into an all-day barrage of anger and fear. For the most part, CFO Arno Antlitz and Thomas Schäfer, head of the namesake VW brand, will make management's case as to why unprecedented cuts are needed.

Read more on VW:

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