Nonetheless, to further expedite the widespread adoption of electric vehicles, the industry must address significant psychological barriers that potential customers encounter when contemplating switching from internal combustion engines (ICE) to EVs. These key factors encompass:
Range Anxiety and Charging Time: Concerns about running out of battery power (range anxiety) and the time required for recharging.
Charging Infrastructure:The availability and accessibility of charging stations play a crucial role in the feasibility of EV ownership.
Technological Obsolescence and Battery Life: Apprehensions about the longevity of batteries and the pace of technological advancements in the EV industry.
Resale Value Uncertainty: Lack of clarity regarding the future resale value of electric vehicles.
Higher Upfront Costs: The relatively higher initial investment required for purchasing an electric vehicle than traditional ICE vehicles.
While the industry is solving some of the above points by creating more contiguous public charging networks and working on innovative options like fast charging and swapping, other points need specialised independent entities focused on Asset Lifecycle Management to emerge. EV financing is not like typical ICE vehicle financing since a large part of the cost of an EV is the lithiumbattery (will continue to be so even if chemistry changes and with indigenisation). Furthermore, these batteries have a usage beyond automotive and hence need to be managed across their lifecycle due to the higher cost and the scarce metals they are made of.
EV financing will be the most critical catalyst for EV adoption to accelerate. This will need the emergence of specialised EV financing entities that can manage the EV and the batteries across their lifecycle.By doing asset lifecycle management, these entities can bring down the cost for each user segment and remove barriers to adoption, as pointed out above. This further embellishes the benefits of circularity thereby.