Electric vehicle drivers are missing out. This is according to a recent European study conducted by Delta-EE which discovered that:
- 42% of electric vehicle (EV) drivers are not on the best charging tariffs for their vehicles because they are not using a dedicated home charging point to charge their car
- Less than 50% of people have a time-of-use tariff, enabling them to take advantage of cheaper overnight electricity prices, and
- Just three in 10 EV owners have a specific EV tariff with their energy provider
The research points to significant missed opportunities in engaging new EV owners in smart charging and maximising their car’s potential to cut their costs and carbon emissions. By charging their vehicle through a smart domestic charger able to optimise charging to times of low demand when energy is cheapest and greenest, customers can not only save on their energy bills but reduce their carbon footprint.
In fact, if a customer buys an EV and home charger they typically reduce their car running costs by ~50% and triple their CO2 savings per kilometre. Add smart charging or bidirectional vehicle-to-grid technology and emissions can be decreased by a further 30% with customers able to actually earn money – up to £800 a year – for importing cheap energy and selling it back to the grid. At scale, this technology can accelerate the energy transition by increasing the use of renewable power and preventing fossil fuel backup generation to be switched on at peak times, and do so in an affordable way for customers.
EV uptake in Europe
While only ~2% of drivers in the UK and France drive an EV, acting now to improve the EV buyer journey and ensure drivers are offered the most cost and carbon-saving tariffs will prevent cost spikes in the future. This is true not only for drivers, but also for grid operators and utilities / retailers, by avoiding or delaying network reinforcement and reducing the cost of electricity.
The time is now as the EV market is due to boom with the UK and France jumping from 2% penetration to over 25% by 2030. Across Europe, forecasts show that by 2030 there will be ~40m Battery Electric Vehicles (BEV) customers consuming 80 TWh of additional electricity per year.
EV uptake in the US
EV uptake is also accelerating in the US, with several states moving to ignite demand. California, for example, has effectively banned the sale of new gasoline-powered cars by 2035 meaning ~70% of all new vehicles sold by 2030 will be electric.
The problem today is the journey from buying an EV and set-up to the driving and charging experience itself remains disjointed and complex for customers.
The volume of information and required actions from the customer can be overwhelming and is largely due to the current complexity of the EV ecosystem and the number of different players involved at each stage of the journey. An average customer needs to interact with at least six different parties at various points of their journey in order to receive the full EV experience.
The diversity of these ecosystem participants contributes to the disjointed nature of the EV customer experience. Two key entities involved are auto OEMs and energy suppliers – two industries which have historically been unrelated. To improve the customer experience, the interaction between these two stakeholders will need to be increasingly seamless.
In this blog series we will discuss a hypothetical prospective EV driver called Alex, and examine each step along her journey. We can broadly segment the journey into three steps:
- Research and purchase
- Set-up and onboarding, and
- In-life EV driver experience
This first blog will focus on the first of these steps – research and purchase – where the customer decides which EV is right for them and how they are going to acquire the car.
1a. The EV Research phase
Alex’s EV journey starts with her decision to buy. This decision is driven by a number of things including the availability of government incentives and the actual experience of riding in or driving an EV. These, among other factors, mean the switch to EVs is now an active consideration among many drivers. According to Shell Recharge, 76% of EU drivers are considering a battery electric vehicle (BEV) as their next vehicle.
So, let’s assume Alex has taken the plunge. She now needs to figure out which EV is best for her. Although Alex can compare manufacturer information on car models fairly easily, the number of options makes evaluation challenging.
Alex is bombarded with new terminology and a multitude of questions about her needs including:
- What range will she need?
- Should she buy second hand or new?
- Is it best to lease or buy outright?
- Is she taking full advantage of all the available grants and tax breaks?
She will be able to assess her options against these questions on a wide variety of digital marketplaces and comparison sites, such as the one below. However she will most likely need to visit multiple sites for different aspects of the car purchase package (EV, charger, electricity tariff, insurance etc.), and often some of these websites can show an incomplete picture of the market. It would surely be easier for Alex if all of this information was available from one trusted place which allowed her to easily compare whole packages.
While almost all car shopping experiences start online, and indeed ~10% of customers are reportedly now prepared to complete their whole car purchase online, taking a test drive is still critical to the buying decision for the vast majority of drivers. This is especially true of EVs, as many customers aren’t familiar with them. Test drives typically take 10-15 minutes at the local dealership. However, increasing numbers of customers now want longer, unaccompanied test drives to try out an EV around familiar, preferred routes. It’s not hard to envision a future where test drives allow customers to temporarily integrate the car into their everyday life, utilising vehicle telematics to better understand their EV driving and charging behaviour in order to answer many of the questions Alex has about her EV needs such as required range, or the optimal energy tariff.
1b. The EV Purchase phase
On the question of how Alex then buys her EV, she might firstly consider her purchase options, which range from buying outright, to leasing, to even opting for a subscription-type model.
The upfront cost of an EV can be ~£5,000 – £10,000 more than a petrol equivalent. As a result, more buyers like Alex could opt for a financing deal rather than buying outright, which would require additional touchpoints with an entity offering car finance.
A recent survey of car buyers in the US, China and Germany found that ~65% would want to purchase their EV via a financial service – e.g. leasing or car subscription. This preference for paying for an EV via ongoing payments could explain the success of companies such as Onto – a UK based EV subscription service, which recently secured funding to expand into Europe. Onto says its most popular subscription models are those that are all-inclusive of miles, insurance, and free charging at public charging networks. Bundled together, this kind of service minimises the friction customers like Alex experience when choosing an EV.
Alex also has the option to buy a dedicated EV home charger (electrical vehicle supply equipment or EVSE). Charging tends not to be a consideration until the purchasing phase is well underway, or even completed, and tends not to be a barrier to the purchase of an EV.
Since vehicle providers – both dealers or the automakers themselve – tend to be different from the charger providers, there are again multiple touchpoints for Alex to deal with in this phase of the journey, compared to just one with a traditional ICE vehicle. The customer has multiple opportunities to ‘drop off’ the charger purchase pathway, due to the volume of additional actions she is required to complete. Along this pathway, Alex needs to consider things such as:
- Does she need a home charger or will public charge points suffice?
- What is her budget?
- What features are important to her?
- Technical evaluations such as: is Alex’s home currently capable of supporting a charge point?
- Which company should she choose to complete the installation?
These considerations could again be ‘bundled’ simply into the initial EV research phase – laying them out clearly alongside car options. This smooths the process for Alex – creating a single point for car and charger order, installation and delivery, maintenance and invoicing.
Technology has the power to revolutionise the way Alex chooses, purchases and acquires her new EV and charger, and to dramatically improve conversions to EV as well as overall experience during this initial step. Right from the start, more could be done to streamline Alex’s journey to acquiring an EV and reduce the complexity that currently surrounds the process. The options presented to Alex could be personalised specifically to her, using data at the test drive stage and other touch points.
At Kaluza, we are aiming to make the customer EV journey a road more easily travelled. Our goal is to smooth out complexity and remove unnecessary steps and touchpoints, in order to create the positive experience that customers like Alex will increasingly value and grow to expect. Stay tuned for our next blog which analyses the challenges facing new EV drivers at the next stage in their journey and how they could be solved.