At the start of the COVID-19 pandemic, it seemed as if automotive innovations would be stymied by stagnating sales, as well as a largely assumed consumer appetite for automotive innovations (and their price tags) would be diminished during this period of economic uncertainty. But against all odds, the opposite happened. In 2020, electric vehicle registrations in the US reached a record market share of 1.8% according to IHS Markit, and over half of consumers say they are interested in purchasing a hybrid or electric vehicle, according to Mintel research on mobility.
Incentivizing electric vehicle consumers
One of the challenges in normalizing electric and autonomous vehicles in the US has been the significant lack of government support in terms of introducing infrastructure bills, as well as measures to tackle vehicle affordability. However, the current administration has thrown its weight behind the future of mobility with President Biden’s pledge to have an all-electric federal fleet in addition to his proposed infrastructure bill that calls for more electric vehicle chargers, in addition, to incentivize buyers.
While the plan offers limited information regarding how it will affect autonomous vehicles, it pairs nicely with original equipment manufacturer’s (OEM) pledges to offer more sustainable vehicles. This year alone, the automotive industry is poised to bring more electric vehicles to the market than ever seen before. An infrastructure plan that seeks to bring price parity to electric vehicles will aim to help overcome one of the larger barriers to purchase: vehicle affordability.
Currently, there is a federal tax credit of up to $7,500 for electric vehicle buyers but consumers will find that depending on which OEM they purchase from, their vehicle is ineligible. This is because after automakers sell 200,000 electric vehicles, their cars no longer qualify for the incentive. Under the new proposed plan, the ceiling may not only be removed but new parameters might be introduced to extend the credit.
Looking beyond a world with more sustainable vehicles, electric vehicles also offer up a wide variety of new technological features to be introduced due to how they are manufactured. While vaccination efforts are underway, consumers’ attitudes towards health and safety have largely shifted – even when it comes to their vehicles. Nearly two-thirds of consumers are interested in technology that self-cleans their vehicles. Aside from helping consumers keep their vehicles tidier, automakers are looking into futuristic interior vehicle features such as biometric ignition switches that have consumers utilize a fingerprint reader to start their vehicles, as well as emotional monitoring technology that would change the interior of the cabin to improve consumer’s mood, reducing the likelihood of road rage.
What we think
So while we may not have flying vehicles in 2021, there are a plethora of automotive innovations underway that seek to not only make vehicles safer and more sustainable but more enjoyable to ride as well. With government assistance, it is likely that these innovations should become more palatable and financially feasible to the everyday consumer, making mass adoption more realistic.
