As gas prices hit record highs this quarter—topping off above $4 a gallon for most U.S. drivers—one has to really ponder the electric vehicle as a viable option. Electric vehicles (EVs) certainly promise energy efficiency, but all of the exact savings varies depending on the vehicle you’re considering. Sure, it’s not going to cost you in exorbitantly-priced fossil fuels at the pump, but other expenditures factor into juicing up the EV. For example, the MSRP of an EV often prohibits the purchase of many would-be car shoppers from the get-go.
According to the Deloitte 2022 Global Automotive Study, 69% of Americans still aren’t ready to pull the plug on their gas-powered motors and said their next vehicle won’t have any kind of electricity involved.
In this blog, we will consider what roadblocks are preventing most people from going electric, and how blockchain might ease the transition.
Roadblocks to Purchasing EVs
There are a variety of pain points for consumers that must be addressed for EVs to go mainstream. The most significant hangups in the minds of consumers fall into two categories: the affordability of EVs and the scarcity of charging stations.
Are EVs Cost-Effective?
For those who are considering an EV for merely cost savings and not emissions savings, a savvy consumer should always look at the total cost of ownership for a vehicle, and not at just the initial purchase price. Whether it’s gas or electric-powered, knowing how much it costs to drive your dream car should factor into your buying decision. The folks over at AAA do a good job of analyzing a lineup of vehicle types and compare their operating cost (maintenance and fuel prices) and ownership (depreciation, license, insurance, etc.) cost.
EVs are one of the vehicle categories included in the cost analysis, and if you’re in the market for a new car, check out the 2021 report to see how much it really costs to drive an EV. When it comes to operating costs alone, the report favors the EV with a hefty savings per mile over its gasoline-powered counterparts. If you’re really curious about specific models and savings, head on over to this vehicle cost calculator by the Alternative Fuels Data Center (AFDC), which calculates the total cost of ownership and emissions for makes and models of most vehicles to see if your EV hits your budget.
According to the reports, once you get over the slightly higher sticker shock of an EV, the longevity of savings in terms of maintenance and fuel costs stacks considerably in the EV’s favor
Range Anxiety: Fear of Running on Empty
Range anxiety. It’s a real concern for drivers out there who may or may not be considering an EV as their next purchase. While gas-powered vehicle owners often push their vehicles past the dreaded “low fuel” light with a little trepidation, the comfort lies in the fact that there are gas stations to be found on about every busy street corner. On the flip side, many consumers are hesitant to buy an EV based on fear of running out of battery charge before they reach their destination and/or not finding a charging station in their vicinity. EV owners can charge their cars at home, yet the number of public charging stations, critical for mass EV adoption, is lacking.
There are fewer than 46,000 EV public charging sites currently in the U.S., according to Department of Energy data. In comparison, the number of gasoline fueling stations in the country totals more than 150,000.
The infrastructure needed to support public and even workspace EV charging needs to be addressed to grease the wheels of widespread adoption.
Blockchain, Electrified.
Carnomaly is always looking at how blockchain can innovate the automotive industry, so it’s no surprise that we’ve uncovered ways companies are already utilizing blockchain to expand the EV ecosystem and make them more attractive to consumers.
Blockchain: Offline is the New Luxury
According to its website, Xeal is a company that provides the most advanced EV charging stations designed for progressive multi-family apartments and businesses. The problem Xeal addressed? Lack of Internet connectivity for drivers wishing to charge EVs in underground parking. Xeal’s self-reliant charging solution is accessible to EV drivers with or without internet connectivity. There’s no dependence, no downtime, and no Internet needed to run Xeal’s charging system. That’s because it’s based on a blockchain-based platform.
To use Xeal, drivers must first download the app and provide their payment as well as vehicle information. Drivers are then given a cryptographic token that allows them to use all of the company’s public charging stations. When the driver arrives, the station identifies the token embedded in the phone without the need for Wi-Fi.
Xeal plans on expanding its solution to make clean energy available to more drivers by deploying over 10,000 chargers in the next couple of years. While we’re excited by this company’s development, we’re even more pumped by the premise behind it. Blockchain has the potential to bring more electrical charging stations to places all over the country—with or without Internet connectivity.
Blockchain Driving Down Supply Chain Costs
Some major car brands have begun to use blockchain technology to reduce paper trails, improve efficiency, and cut costs in the automotive manufacturing supply chain. Global giants BMW, Mercedes Benz, and Toyota started the trend and China’s auto industry is taking notes.
SAIC-GM-Wuling is a Liuzhou-based automaker that has been tapped by China’s pilot program to utilize blockchain projects to more effectively manage operations. SAIC-GM-Wuling has begun to use blockchain supply chain innovations and expects to reduce paper usage by as much as 10 million sheets a year and cut costs by around $2.5 million.
For a large company, that might not seem like huge cost savings, but the automaker produces the country’s top-selling EV, the Hongguang Mini EV, for a pint-sized $5000. One way it continues to keep its pricing competitively lower is by tracking its production costs sharply. By utilizing blockchain in its supply chain management, the company has been better enabled to realize those cost-cutting strategies.
Looking at the example above, when automakers who produce EVS incorporate blockchain technology into their supply chain equation, the cost savings can add up tremendously. Think about the millions of components, chips, and parts that must be managed and transacted through multitudes of suppliers in an automotive supply chain. The risk of human error and inefficiency in a paper-based system can cost time and money in an already competitive market. Less time can be spent validating data and more can be spent on delivering goods and services, which ultimately means driving down the MSRP to an affordable level for potential buyers. If automakers who produce EVs continue to find ways to manage their production costs through blockchain innovation and pass those savings onto the consumers, the notion of owning an EV might actually gain some traction.
Conclusion
While EVs haven’t hit the main highways and remote byways of the U.S. in a far-reaching way, blockchain has shown promise in several use cases alleviating some of the roadblocks behind EV adoption, namely in charging reliability and up-front affordability.
We know that blockchain offers innovative applications to make life easier for car companies, dealers, and motorists alike. For more information on how Carnomaly is leading the way with its own suite of innovative solutions in the space, follow us on social media.