If the new film “Revenge of the Electric Car” is to be believed, electric vehicles have finally established a permanent toehold — not to be discarded by the major manufacturers as they have been in the past. Today, it appears as though independent companies like Tesla Motors, Coda Automotive and Fisker have successfully catalyzed the Goliath auto industry to purse a greener transportation system. Look no further than the Nissan Leaf and Chevy Volt.
But that doesn’t mean that consumers have fully embraced the revolution. Many are still skeptical. And this skepticism usually falls into three categories: range, recharging and price. A lot of myths about electric cars have been busted — they don’t electrocute drivers when it rains, and they don’t explode in the desert heat. But range, recharging time and the high price point have been a little harder for the burgeoning EV industry to debunk.
That said, the high price doesn’t seem to have rattled as many early adopters as analysts have anticipated. Early buyers of cars like the Chevy Volt and the $109,000 Tesla Roadster seem to be fine shelling out for their EVs. These companies do a good job of making their customers feel like early investors in the biggest transition in transportation since the Model-T. People like to see themselves as part of this exciting solution.
But other green technologies aren’t seeing the same level of uptake. Indeed, electric cars seem to be the exception in the green sector. For example, Tesla Motors was able to IPO last year for a whopping $226 million, but every other greentech public sale before and after was lackluster to say the least. Even when it comes to the media, EV headlines drive traffic in droves, while solar, goethermal and wind energy stories attract a less robust audience. A lot of the industry’s success has to do with its sex appeal and the U.S.’s incumbent car culture that already represents billions and billions of dollars.
Other green companies, especially those with high manufacturing and capital costs — solar panel makers, wind turbine installers, biofuel brewers — have similarly high startup costs but far fewer investors and customers willing to pay up. For this reason, a lot of the startups focused on these technologies are finding it extremely difficult — in some cases impossible — to develop more advanced technology, make a major impact on the market, or scale up fast enough.
Yes, there are the stray early adopters who enthusiastically plate their roofs with solar panels, investing tens of thousands of dollars in elaborate home solar systems. But they don’t do it as visibly, as often, or with as much gusto as early electric car owners. On top of that, solar is the only industry that even works in this analogy, because close to no one is installing their own wind turbines or geothermal wells. Because this initial adoption cycle is so anemic, other greentech companies are missing out on the infusion of cash from committed early investors that has kept the wheels turning for EV automakers.
When you survey the markets where different green technologies are likely to take root fastest, EVs clearly have the best shot from a cost perspective. People who are buying new cars have an established level of income — even if it’s lower middle class. People who could benefit from other technologies, especially wind and solar, don’t necessarily fall into this bracket.
In fact, the bulk of the population that would benefit the most from alternative energy systems live in the developing world where new, rapidly deployed sources of energy are increasingly necessary. The biggest markets for distributed solar panels could very well be villages in Africa and Asia that lack centralized power and other modes of generation. But these regions can’t bear the high price tags attached to brand-new technologies.
The upshot is that EVs will continue to lead public interest and spur investment in the public sector while other green consumer plays lag behind waiting for technology at a solar pace until it becomes more practical for the masses.