Global car makers are moving to energize the electric car market — exemplified by recent moves by auto giants like Ford and Volvo, which announced over the summer that it would stop making gas-only cars after 2019.
So is the death of the internal combustion engine ahead?
“I would not say it’s imminent,” Michelle Krebs, executive analyst of AutoTrader, told CNBC’s “On the Money” in a recent interview. “There are some things that have to happen before we see this big surge to electric vehicles.”
That suggests that while big car makers are speeding toward the future, American drivers have yet to warm up to “plug-in” vehicles en masse, she said.
“The consumer acceptance is not there,” Krebs told CNBC. Consumers “say ‘yes, they’re interested,’ when we survey them. But when it gets right down to it, they end up buying a gasoline engine,” she added.
Although U.S. electric vehicle (EV) sales have surged—the category saw a nearly 50 percent rise in July 2017 versus the comparable year ago period, according to EV Obsession figures—Krebs insisted that EVs “are not ubiquitous,” at least not yet.
“They remain only about one percent of total sales in the U.S,” the analyst said. “We focus on consumer acceptance, and we’re not there yet.”
Still, automakers are continuing to invest in EV technology for future transportation.
Ford is planning to invest $4.5 billion in electric vehicles, and plans to launch 13 new EV models over the next five years. Separately, General Motors (GM) said it will have more than 20 EVs available by 2023.
Krebs, however, stressed that many more charging stations are needed. “In most places, except California, there isn’t an infrastructure for charging just yet.”
Calling it a “‘chicken and egg’ thing,” the analyst said that “when more electric vehicles get out there, there will be more infrastructure. But you need the infrastructure to lure people into buying the electric vehicles. So, we’re just not quite there yet at that inflection point.”
She added that vehicle costs also need to come down, and driving range has to increase. The Chevrolet Bolt EV costs $37,495, which excludes a $7,500 federal government tax incentive. Meanwhile, the 2018 Bolt has a range of 238 miles on a single charge, which is actually more than the Nissan Leaf’s 150 mile range.
“There’s a lot of focus on the battery, bringing down the cost. Bringing down the size, so it can be packaged into different vehicles. Bringing down the weight, because more weight doesn’t help your mileage,” she explained.
Plus, most EVs are sedans, while trucks and SUVs are among the most popular vehicles, Krebs added.
Last year, the top three best-selling vehicles were all pickups: Ford F-Series, Chevrolet Silverado and Dodge Ram.
And if gas is still cheap when new EV models begin appearing in showrooms in 2020, it will be difficult for buyers to give up their gas powered cars to go electric. “It’s about the economics, and does it enhance a person’s life? Does it make travel easier?” Krebs asked.
“Any kind of new technology, those are the things have to be in place before there’s full acceptance,” she added.
On the Money airs on CNBC Saturday at 5:30 am ET, or check listings for air times in local markets.