Two weeks ago, I described the chasm before mass-market electric vehicle adoption. The chasm, as shown in Figure 1 and depicted in the EV Rant as a moat, is the gap between enthusiastic nerds and mainstream curmudgeons. I’m often among the mainstream curmudgeons, but not always. I could be considered an early adopter of smart thermostats and cold-climate heat pumps purchased 11 and 7 years ago, respectively.
Figure 1 Market Adoption Curve
For automobiles, I have gone out of my way for years, decades even, to find ones with manual transmissions – why? Energy efficiency, for one. There is less waste in a manual transmission. More importantly, I can’t stand the weee, waauh, weee, waauh as automatic transmissions upshift and downshift repeatedly when climbing hills or even accelerating from a stop. They are unresponsive and sluggish, like the brand-new Toyota Corolla I rented this summer. It clocked excellent gas mileage and was perfect for long hauls, but city and country road driving, no. And I get it: responsiveness is a significant advantage for EVs.
My point is I value the driving experience of the manual transmission over the weee, waaaauh, weeeeeee of the rubber band automatic transmission.
On the other hand, engineering geniuses at Porsche developed the Doppelkupplungsgetriebe (PDK) double-clutch automatic transmission to rifle through gears with continuous power to the drivetrain. The transmission was developed in the 1980s for racing. Stomp on the accelerator and enjoy the compression into the firm seat that fits like a glove.
Toys
Table 1 shows drivers’ top reasons for choosing electric vehicles, per Deloitte’s 2024 Global Automotive Consumer Study. The top reasons include lower fuel costs, environmental considerations, and less maintenance. Not mentioned is the toy factor, as with sports cars.
Table 1 Top Reasons to Choose EVs
It’s fair to say that sports cars have saturated the market. In 2021, sports cars made up 1.5% of the market, down from 2.0% in 2016. Because they are expensive, sports cars represented 5.6% of global automotive revenue in 2022. Top makes, according to Statista, included McLaren (revenue of US$30 billion), followed by BMW (US$ 10.5 billion) and Tesla (US$9.4 billion). Toys.
Jumping the Moat
Like sports cars, I cannot see battery electric vehicles (BEV) gaining much additional market share. Like manual transmissions, they are not for the mass market, while both may be preferred by nerds like me.
The market solution for environmentalists is the plug-in hybrid electric vehicle, PHEV. If I were a betting man, and I am sometimes, I would put my chips on Tetsuo (Ted) Ogawa and his car company known as Toyota North America[1]. Ogawa is guiding the company with “a strategy that puts hybrids first – and always has – while rivals falter by focusing on battery-electrics.”
Ogawa: “Our philosophy is there is no such thing as ‘perfection,’ only ‘ever better’ in all we do, and that applies to our management philosophy as well.”
Knowing The Customer
Ogawa says, “This boils down to customer demand. We don’t want to get ahead of customer needs. If we overproduce BEVs and nobody wants them, we have a real problem. That means the materials for one BEV could have instead produced six plug-in hybrids or 90 hybrids. So, if the BEVs are sitting on dealer lots, we, and our customers, lost the opportunity to help reduce carbon as much as possible, as quickly as possible.”
That is a wise man. “I don’t deny BEVs are a great solution, but they’re not the only solution. We need to combine a powertrain to fit customer needs with the final target of reducing carbon.”
I pulled price, efficiency, range, and acceleration data from the www and compiled it in Table 2[2][3][4][5]. The average round-trip commute to work in the U.S. is about 24 miles and 52 minutes.
Table 2 PHEV v BEV
Which design will win the mass market?
Cars like the Prius Prime can quickly reduce gasoline consumption by one gallon per day per vehicle – about average daily fuel consumption for personally owned automobiles. Furthermore, it’s a backup or reserve in case of power outages. Has anyone considered how millions of people may evacuate Florida to escape death and destruction of a hurricane when all or even half the population is stuck with BEVs? The grid would break, and there might not even be power to pump gasoline or transact any commerce for that matter.
In less dire conditions, PHEVs can more easily provide grid services, avoiding the need to charge at all during peak day/time events. They are the way forward to decarbonize personal transportation. They can be every person’s mode of transportation and not just the nerds’ preferred mode.
Conclusion
I suggest not letting purity be the enemy of the ideal: customer needs, performance, and flexibility matter. Also, consider scenarios at scale if electrified technologies grow and what that means for the grid.
[1] Buss, DB. (2024, Summer). There is No Such Thing As Perfection. CEO Magazine, Pages 23-27
[2] https://www.toyota.com/priusprime/features/mpg_other_price/1235/1237/1239
[3] https://www.walsertoyota.com/2023-toyota-prius/
[4] https://www.caranddriver.com/tesla/model-3
[5] For Prius Prime, mpge represents “EPA-estimated mileage combined“
