cars and charging stations of EVs amidst city backdrop

Are EVs Really the Future?

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May 10, 2024

From perfectly clean cities out of imagination to roads filled with the whispers of electric motors instead of whirring engines, the vibrant setting of many futuristic movies still seems, in fact… futuristic. As for us in modern times? Our climate projections have much more room for improvement. 

In the next 30 years, the Energy Information Administration projects the global demand for energy to grow by nearly 47%.1 While increased energy usage isn’t inherently harmful, our continued dependence on fossil fuels is. TDL research analyst Jestine Cabiles previously metaphorized unchecked greenhouse gas emissions and deteriorating climate stability as a “dragon” that must be tamed. My investigation will go further into the heart of one of the potential solutions capable of conquering this beast: electric vehicles (EVs)

Our Objective

In response to dangers regarding biogeochemical cycles and environmental cleanliness, nations across the world have begun electrifying ground transportation. By the end of last year, 31 countries had over 5% of new car sales go electric—a pivotal EV threshold.2 Nonetheless, despite the online buzz about electrification and seemingly widespread support for sustainability, the cold, hard data on actual electric vehicle adoption metrics don’t live up to expectations. The question is why?  

By the end, I hope this nuanced analysis of EV’s psychological barriers and proposed solutions will clarify if EV is truly “the future”—and if so, how long it will take us to get there.

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Understanding EV Viability and Psychological Resistance Once and For All

Exhibit A: Overconsumption in the Pursuit of Conservation

Before we dive into the main psychological barriers, I want to start by playing devil’s advocate to add context behind the key underlying limitations of EV expansion.

Back in the 1900s, a paradox coined “Jevons paradox” argued that improvements toward efficiency often lead to more consumption rather than intended conservation.3 William Stanley Jevons himself witnessed this firsthand, discovering the paradox through how Great Britain's evolving steam engines increased its demand for coal, rather than decreasing it. Now, as electric vehicles incite a new revolution, we reface the question of whether the demand spikes in energy from more efficient energy sources truly combat climate change as expected.

We can find a key example of Jevons paradox in the lithium-ion batteries powering EVs. As battery efficiency per unit of lithium increases with innovation, so does the demand for high-carbon-emitting lithium mining. Compared to the production of generic batteries for cars, the average lithium-ion battery uses three times more electrical energy and can emit 74% more CO2 than conventional cars.4 And, even though the lifecycle of an electric vehicle will in the long term lead to fewer carbon emissions, the paradox sets in again its fair share of nationwide consequences. 

The first downside includes hedonistic behavior by consumers resulting in them being more open to using cars for nearly everything in the pursuit of “saving the environment.” In the end, this behavior upholds Jevons paradox of dangerous consumption rather than conservation. Even beyond just energy consumption, EV consumers have often overlooked the fact that the overuse of relatively heavier EV cars (by nearly 30% compared to gas-powered ones) will lead to a pervasiveness of road damage, and thus, higher overall taxes and energy required to fix road damage.5

While this argument does add a touch of cynicism, it underscores the importance of consumers holistically considering their purchasing decisions, rather than falling into the “hype” around EVs. To solve these consumer choices, we can’t exactly rewire our brains; instead, we have to ensure our energy consumption and manufacturing operations are as green as possible. 

Exhibit B: Chargers, Batteries, and the Catch-22 of Fear

Now that our first exhibit has demonstrated key limitations in whether EVs can truly be our future, we’ll shift our focus to the main driving barriers behind EV adoption itself: the chargers. 

Given the shorter mileage and current limitations in many EV cars, a negative feedback cycle with charging stations has become a psychological Catch-22. Underutilized, unprofitable, and scarce, charging stations lead to fewer people adopting EVs. In turn, charging stations have less demand to maintain themselves, thus leading to even more people fearing charging station malfunctions. At the beginning of 2023, for example, a study by J.D. Power reported that “20.8% of EV drivers using public charging stations experienced charging failures or equipment malfunctions that left them unable to charge their vehicles.”6

This so-called charging anxiety is only exacerbated when taking into account consumers' gross underestimation of battery longevity. A research study now posted in Nature Energy discovered that a lack of information has left a stark 30% underestimation of how well current EV batteries could cover daily requirements.7 Battery longevity aside, even more issues arise with chargers given their much slower speeds.

Even now, average electric vehicles take about eight hours to go from empty to full on a typical charging point. While EV owners can always charge overnight, the real scare comes from maintaining enough fuel to get through longer trips with scarce charging infrastructure. For many, without a factor to overcome this psychological inertia, it's easy for many customers to fall back onto the anchoring bias. Given our preexisting anchoring to the familiarity of a gas-powered car, the drastic shift in security and maintenance of EVs is bound to skew our judgment.

Some of this concern is justified. After all,compared to regular cars, EVs hold a plethora of problems for the average customer. For example, nearly 2% yearly battery degradation alongside safety concerns over dangerous EV fire hazards are sometimes just not worth the hassle of switching away from gas power.8 It’s difficult to fight such historic stability and consistency, and most times, only one factor can truly tip the scale: costs.

Exhibit C: Costs, Social Norms, and Other Psychoeconomic Factors

Other than the large inefficiency that EVs still face, the double-edged growth driver and barrier for EVs has been their changing costs and power as a social symbol.

In Deloitte’s 2024 Global Automotive Consumer Study, despite many U.S. respondents sharing concerns about driving range and charging time previously mentioned, a leading 59% of them cited cost as the main driver for their next vehicle over any other factor.9 When money is involved, our anchoring bias again comes into play. After all, given the other problems already associated with EVs, it can be hard to cough up another $3,000 to purchase an EV over a gas-powered car, even if an EV will be more environmentally clean in the long term. At times like these, emotional rationale becomes influenced by things such as time discounting, which can make current costs incredibly more salient than long-term savings.

Beyond just costs, however, status quo and social norm biases may offer us psychological insights into EV adoption. For instance, motivated reasoning stemming from new technology can offer us the strongest example of a social norm bias. This can be seen in the uptick of social media trends or app integrations for the “next big thing,” where EV is included. Speaking from personal experience, those with EVs sometimes put themselves in a higher moral regard. An analysis of the effect of EV adoption only confirms these compensatory beliefs of undertaking costly and sometimes difficult shifts toward eco-friendly vehicles to find a self-sense of environmental justice.10

Nonetheless, many environmental skeptics, as well as those who tend not to want to break out of this social quo bias, will only perpetuate a cycle of continued usage of gas-powered vehicles without even considering electricity. However, as the consumption curves of both costs and moral responsibility converge in the coming years, EV adoption will possibly, and hopefully, become the cheaper, easier option.

Solutions to Psychological Resistance:

While wider trends to continue making EVs and batteries more efficient and clean are already underway, a key catalyst for everyday consumers would be to appeal to their cognitive biases. In particular, marketing strategies and education or awareness campaigns can be a strong start toward allowing the general public to make more informed decisions on their automobile purchases.

Positive Paradigm Shift Through Nudging and Education

One small way to set off this paradigm shift is by embracing nudging techniques to improve social approval and overall societal norms toward adopting energy-efficient and conserving technologies. Consumers at home can also begin looking to make their next purchase by embracing educational promotions by companies such as Mercedes Benz, which has been producing in-depth blog posts to help consumers understand and mitigate range and battery anxiety.11 Further applications in fleet managers also open up the possibility of helping large distribution companies push past barriers and integrate EVs into their networks.

Overlooked Market Opportunities

Another way that EV manufacturers and policymakers can further dive into this market is by appealing to women, a historically underrepresented audience in the EV revolution. Currently, surveys reveal that women are twice as likely to be concerned about their safety at public charging stations thanks to long charging times and more isolated locations.12 One mother, in particular, noted that “she wouldn’t feel comfortable if either of [her two daughters] had to charge the car at night or in an isolated place.” To counteract these sentiments, manufacturers can work toward making more strategic location selections for charging stations and even potentially work with mobile applications for safety to address concerns and dispel any apprehensions.

As manufacturers learn to become more inclusive of their audiences, catering to psychological factors beyond just economic ones presents a key area for improvement. Additionally, as larger macroeconomic regulation shifts occur in the coming months due to the upcoming U.S. election possibly affecting the Inflation Reduction Act, I suggest all readers keep their eyes peeled on how EV adoption will possibly progress, evolve, or perhaps even halt. 

Final Thoughts

Even just by looking around, it's plain to see the world still faces many challenges on its road toward EV adoption. Nonetheless, suppose each of us becomes just a little more informed on the psychological factors and interventions behind this shift. We would be more encouraged to think about whether it’s time to contribute to this sustainable future—one electric car at a time.

References

  1. Kahan, A. (2019, September 24) EIA projects nearly 50% increase in world energy usage by 2050, led by growth in Asia. U.S. Energy Information Administration (EIA). https://www.eia.gov/todayinenergy/detail.php?id=41433
  2. Randal T.  (2024, March 28). Electric Cars Pass the Tipping Point to Mass Adoption in 31 Countries. Bloomberg.com. https://www.bloomberg.com/news/articles/2024-03-28/electric-cars-pass-adoption-tipping-point-in-31-countries
  3. Marchand, P. (2023, January 26). The Jevons’ Paradox Applied to Electromobility. Transport Energy Strategies. https://www.transportenergystrategies.com/2023/01/26/the-jevons-paradox-applied-to-electromobility/
  4. Zhao, E., Walker, P. D., Surawski, N. C., & Bennett, N. S. (2021). Assessing the life cycle cumulative energy demand and greenhouse gas emissions of lithium-ion batteries. Journal of Energy Storage, 43, 103193. https://doi.org/10.1016/j.est.2021.103193
  5. Kertscher T. (2023, June 21). Carry that weight? Electric vehicles outweigh gas cars but aren’t main culprit of road wear. PolitiFact. https://www.politifact.com/article/2023/jun/21/carry-that-weight-electric-vehicles-outweigh-gas-c/
  6. EV Leasing Volumes Poised to Surge as Tax Rule Makes It Cheaper to Lease than Buy. (2023, May 25). J.D. Power. https://www.jdpower.com/business/resources/ev-leasing-volumes-poised-surge-tax-rule-makes-it-cheaper-lease-buy
  7. Ryan, G. (2022, May 20). Overcoming psychological barriers to electric vehicle adoption. Innovation News Network. https://www.innovationnewsnetwork.com/overcoming-psychological-barriers-electric-vehicle-adoption/21672/
  8. Winton, N. (2023, November 1). Electric Vehicles Not Guilty Of Excess Short-Term Fire Risk Charges. Forbes. https://www.forbes.com/sites/neilwinton/2024/04/21/electric-vehicles-not-guilty-of-excess-short-term-fire-risk-charges/
  9. 2024 Global Automotive Consumer Study. (2024 January). Deloitte US.
    https://www2.deloitte.com/us/en/pages/consumer-business/articles/global-automotive-consumer-study.html
  10. Nayum A. & Thøgersen J. (2022 July). I did my bit! The impact of electric vehicle adoption on compensatory beliefs and norms in Norway. ScienceDirect https://www.sciencedirect.com/science/article/pii/S2214629622000482#s0085
  11. AMSI, D. (2023, June 30). Understanding Range Anxiety in Electric Vehicles: An EV Car FAQ. Mercedes-Benz of Naples. https://www.mercedesbenznaples.com/understanding-range-anxiety-in-electric-vehicles-an-ev-car-faq/
  12. Kutz, J. (2023, March 22). Women are less likely to buy electric vehicles than men. Here’s what’s holding them back. The 19th.https://19thnews.org/2023/03/electric-vehicles-gender-gap/

About the Author

Ian Hartana

Ian Hartana is a student at the University of California, Berkley. He is also an experienced researcher with a background in investing and behavioral finance. Prior to writing for The Decision Lab, he has posted investment analysis on Seeking Alpha and Yahoo Finance. He also writes under Insider Finance to unearth investment psychology and implications of macroeconomic pressures on consumer choices. He often leads webinars to financial literacy nonprofits such as Finatic and Finclusion and has worked on research with a mentor from Capital Group.

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