We all know what S-curves look like when we are talking about roads or racecourses. Now, think about an S-curve as a graph of business sales. Like most other new products, electric vehicles sell in an S-curve – beginning at a slow start with oversupply, then comes fastest growth (with supply sometimes unable to keep up with demand) and then comes saturation.

Take pure-electric buses as an example. China rapidly deployed 400,000 electric buses – 99% of the total number in the world, then it collapsed governmental subsidies, causing a collapse in deliveries – and sadly, it now mainly makes smoking buses again. *

The US may be mirroring the same graphic results. In 2011, then President Barack Obama set the goal for the U.S. to have one million pure-electric vehicles (PEVs) on the road by 2015. Only about 400,000 plug-in electric cars were sold in the United States by the end of December 2015. Nissan Leaf and Chevrolet Volt sales during that period illustrate our slow start with their noted oversupply. Even though both vehicles qualified for the maximum IRS tax credit of $7, 500. By fall of 2018, the U.S. finally reached one million electric vehicles sold.

With all the hype and desire for the proposed, $35,000 Tesla Model 3, one could argue that the U.S. has finally reached a point of fastest growth for PEVs, coupled with its unfulfilled demand. Supplies for the Chevrolet Bolt are also tight, albeit with some of the demand coming from overseas. The demand for Nissan’s LEAF also outstrips supply. Even newcomers like the Kia Niro are in short supply.

It is well understood that despite the fervent increase in demand, PEVs still only account for only slightly more than 1% of vehicles on the road in the US. But even with more than 50 models of electric cars currently available, demand may finally be at the growth point where it typically exceeds supply.

Will the U.S. ever reach its saturation point for PEVs? For China to reach that point with buses, the government not only offered incentives and subsidies, it (along with other countries) invested in 10-second charging supercapacitor (large) buses, and non-stop-top-up charging in many forms; from solar bodywork to intermittent catenary, and even rails and coils in the road along with stationary forms with gantries, etc., at bus stops. Oddly, much of that infrastructure is reminiscent of the electric bus and trolley systems found in U.S. cities during the middle of the last century.

So, where is the U.S. investment in electric vehicles today? Again, we are oddly positioned to meet this growth environment. This year, both Chevrolet and Tesla met the sales targets of more than 200,000 PEVs sold, eligible IRS tax incentives will be eliminated by 2020.

Will U.S. buyers simply shift their desire from a Tesla model to a Mitsubishi PEV in order to earn the tax credit? Or, as incentives wane, so will the public’s interest in pure electric vehicles? As a country, the U.S. must decide to either put up (our tax money) or shut up about becoming an electric vehicle propelled society. Or, are we ready to pull the plug on electric vehicles?

Early in April 2019, a bipartisan group of U.S. lawmakers introduced legislation to expand the electric vehicle tax credit by 400,000 vehicles per manufacturer (or indefinitely), a provision that would give a boost to Tesla Inc. and General Motors before the existing credit comes to an end for them.

S. 1094 is being called the "Driving America Forward Act." The bill could lift electric vehicle sales in a boost for automakers that have committed tens of billions of dollars toward meeting global emissions requirements. Note that when a PEV is leased – not purchased, the tax incentive dollars go to the car company not the motorist. And, because range anxiety is compounded by resale value dropping at twice the rate of the other vehicles, many opt to lease their PEVs.

Many worry that the burgeoning Chinese car manufacturing market will begin leasing PEVs in the U.S. market and take a large share of your tax dollars funded by the Driving America Forward Act. China is expected to dominate global manufacturing of pure electric cars just as it has grown to be the biggest global manufacturer of conventional vehicles.

On the other hand, with China entering the market, some believe that smaller, pure-electric cars will have lower up-front prices than internal combustion equivalents around 2023 – making subsidies less critical.

Don’t look to this scribe for an answer… I’m more of a “drive a stick-shift, carbureted car without any computers because the aliens might be coming” kind of a guy.

But what about you? What are your opinions on how the U.S. should further approach the electrification of vehicles in America? How will it affect your business? Are PEVs something, for which you want your tax dollars to be spent? Send your comments via email to editor@undercardigest.com and we’ll publish your thoughts in an upcoming issue.

*Source: IDTechEx Research