Navigating the Road Ahead: The Case for Investing in Electric Vehicles over Plug-In Hybrid EVs
Widespread EV adoption is not unrealistic. While Plug-In Hybrid EVs (PHEVs) may seem like a compromise between electric and traditional vehicles, they represent a transitional technology at best. Below, we outline a few counterarguments to points made in the Washington Post’s article on PHEVs.
National and state EV sales are strong: Contrary to reports of slowing EV adoption, US EV sales data from the Alliance for Automotive Innovation shows continued and significant growth from 2021 through Q3 2023. Since Q3 2021, EV sales have increased every quarter, and the share of total light-duty vehicle sales that EVs represent isn’t shrinking either. The share of new EV sales increased from about 3% in Q1 2021 to about 7% in 2022 and reached more than 10% in Q3 2023. Additionally, state-level data shows New Jersey is ahead of the national averages at 13.24% EV sales market share as of Q3 2023.
There’s growing consumer interest in EVs: The latest EY Mobility Consumer Index (MCI) — a global EY survey of more than 15,000 consumers from 20 countries — reveals that of the US consumers planning on purchasing a new vehicle in the next 24 months, nearly half (48%) intend to buy an EV – up 19% from 29% in the 2022 EY MCI.
Similarly, many have recently cited the Rutgers-Eagleton poll to stand up consumer disinterest in EVs, quoting how 56% of those polled would “not very likely” and “not at all likely” purchase an EV. Looking at it from a glass-half-full perspective, that suggests that 44% of those polled were at least somewhat interested in buying an EV, which, for comparison, surpasses the Advanced Clean Cars II requirement of 35% ZEV sales for model year 2026. Moreover, many of those who say they wouldn’t likely consider an EV cited associated costs (29%), charging time/frequency (12%), and a lack of charging infrastructure (10%), all factors aggressively being addressed by the state and federal governments (more below).
The build-out of fast charging stations is happening across the country: Charging infrastructure is expanding rapidly to meet the growing demand for EVs. This is in part due to the significant investment by the federal government, such as the NEVI Formula Program, injecting $5 billion across all 50 states, the District of Columbia, and Puerto Rico to build chargers along key travel routes. New Jersey was also just awarded $10 million in the first round of funding for the Charging and Fueling Infrastructure Grant Program (CFI), designed to fill gaps in the charging network and prioritize rural, low-moderate income communities and multi-unit dwellings.
Moreover, private companies are heavily investing in the EV transition, with many staple fuel stations, like Wawa, quickly integrating charging stations. Tesla’s supercharger network, along with other OEMs adopting its charging standard, also further enhances accessibility.
Comparing gas stations and EV fuel stations is NOT apples to apples: Traditional vehicles’ fueling habits differ from those of EVs, so you cannot compare fuel stations and gas stations one to one. Importantly, and often left out of the narrative, 95% of charging occurs at home or the workplace with a Level 2 charger, not just for cost purposes but to ensure the health of the battery. This means that public DCFC charging stations primarily serve occasional longer trips or top-offs for long-range drivers.
The fact that the average American drives less than 40 miles a day makes those people strong candidates for full-battery EVs: Less vehicle miles traveled means less time spent charging your EV. This means most EV drivers will not have to charge their vehicle every day, will be able to charge at home, and will rarely have to rely on public charging.
Cost efficiencies are lost by driving a PHEV: PHEVs still rely on an internal combustion engine that requires regular maintenance and, due to the smaller battery, assumes both gas and electricity costs. In contrast, full-battery EVs have fewer moving parts, resulting in lower consumer maintenance costs over the vehicle’s lifetime and more cost-effective refueling.
Looking Ahead: Today, there are many stories about major vehicle OEMs pulling back on their full electrification strategy and favoring investment in PHEVs. We understand that this decision stems from their eagerness to remain profitable, as PHEVs are more cost-effective for the OEMs to build, and they are attractive to consumers with range anxiety.
While battery costs remain a significant factor in EV pricing, substantial federal funding has been allocated to domestic battery production, driving advancements in battery technology. As production scales up, the OEM’s cost of building EVs will decrease, making them more accessible and affordable to consumers.
Moreover, focusing on EVs enables New Jersey to prioritize charging infrastructure development, especially in harder-to-reach areas like rural towns and densely populated urban areas. By expanding the charging networks, incentivizing businesses, homeowners, and renters to install charging stations, and investing in a robust statewide charging campaign, the state can further alleviate range anxiety and bolster EV market growth.