When I moved my older daughter to Washington, DC, a year ago, we piled all her worldly possessions into a 16-foot truck and made the 2,982-mile trip from northern California in 72 hours. While we weren't exactly a Formula 1 pit crew when we refueled, we could fill up the tank and get on the road again for the next 400 miles in 10 minutes.
Now imagine how this might look in 25 years in an all-electric future if she returns the favor and moves me into a retirement home. It could take an hour or more to recharge a battery big enough to move a truck hundreds of miles. My daughter is great company, and all, but we were already getting plenty of together time and didn't need to be sitting across from each other at a recharging station.
And trucks don't really lend themselves to electrification, anyway. Those using internal combustion engines (ICEs) are already plenty heavy -- even without my daughter's 20 boxes of books -- and the huge batteries needed to move all that weight make EVs far heavier. That means less range, which means more frequent recharging, which means even more time on a plastic chair at the recharging station, drinking bad coffee.
While many people have assumed that EVs would steadily take market share, more and more rapidly, until ICE vehicles disappeared, that thinking was based on the idea that EVs could be a one-for-one replacement for ICEs. But mulling the before and after versions of a cross-country moving trip made me realize that the path to the future may not be as straightforward as I thought, and recent trends support that new thinking -- sales of hybrids are surging, while the growth for EVs is slowing.
The realization comes as two electric scooter companies have filed for bankruptcy and in the wake of the problems at Cruise that have set back the move toward autonomous vehicles, so this seems like a good time to take a broad look at the future of transportation. Auto insurers, among many others, need to get the transition to the electric future right.
To be clear, I still think the future of vehicles is electric, and I hope we get there as quickly as feasible for the sake of the climate. The next car I buy will be electric. But it's worth taking a look at a very smart piece in Business Insider that carries the headline, "What Happened to EVs? The sudden slowdown in electric car sales is a symptom of a much uglier problem."
The article says: "Industry analysts have pointed to several reasons for the slowdown, including insufficient charging infrastructure and a lack of affordable EV options. But they're a symptom of the larger problem: America's EV plan was flawed from the start.... 'The entire myth at the heart of this whole transition is that the battery car seamlessly fits right into the gas car's position,' Edward Niedermeyer, the author of 'Ludicrous: The Unvarnished Story of Tesla Motors,' told me. 'It doesn't, and that's the problem.'"
The piece continues: "When automakers pivoted to EVs, they focused on the kinds of cars that were already popular — which meant a flood of big electrified SUVs and trucks. But massive-bodied EVs don't make much sense.... While bigger batteries allow drivers to travel farther between charges, they also make the cars heavier, more dangerous, more expensive and worse for the planet."
The average U.S. driver traveled only some 40 miles a day in 2023, the article says, and 93% of trips were under 30 miles -- but car buyers still think about the days when they'll drive more than 40 miles, perhaps much more, and about those longer trips. Their "range anxiety" makes them disinclined to switch fully to an EV. The article says Norway has been touted as the model for moving to EVs, yet more than 20 years after it began offering incentives for buying EVs, only 20% of the cars on its roads are electric.
The author concludes: "America's EV plan needs to lean into what these cars do well: short daily trips that can be taken in small, affordable cars. People who frequently take long trips can take advantage of hybrid cars. And better public transit and faster intercity trains could make a huge difference for people and the planet. While it may be a sexy and industry-friendly approach to the climate crisis, an EV-first plan isn't the most effective way to tackle the enormous challenge we face."
Scooters have also taken a hit recently -- Superpedestrian announced it was going out of business; Hellbiz was delisted from Nasdaq because its share price has settled below $1; and, biggest of all, Bird filed for bankruptcy. While scooters aren't yet much of a factor for insurers, it's worth thinking about them as part of the changing mix of transportation, especially within cities.
I've long thought scooters have a neither-fish-nor-fowl problem. They're too fast for sidewalks, where they endanger both the riders (who seldom wear helmets) and unsuspecting pedestrians. Yet they're too slow for streets and, of course, don't wrap riders in the thousands of pounds of protective metal that cars provide. Scooters can work in some environments but not in enough, at least soon enough, to justify scooter companies' flooding of markets in recent years.
An article in Fast Company makes the case that cities need to adapt by marking off special "protected" lanes for scooters, because they provide a useful form of transportation for many and reduce the number of car trips. That makes sense in the abstract but is hardly a solution everywhere. Many cities, especially older ones, have streets too narrow for special lanes to be carved out. And you can "protect" lanes all you want, but car drivers and passengers have well-engrained habits. Back in the 1980s, New York City made a big todo about establishing a bike lane on Sixth Avenue, so I decided to ride my bike from my apartment in Greenwich Village up to Central Park and almost died three times in three miles as cars pulled into my lane right in front of me or as a passenger opened the door to a cab just ahead of me. I never used the bike lane again.
An article in TechCrunch also faults cities, though for a different reason. Perhaps feeling burned by Uber and Lyft, which had run roughshod over regulators in the early days of ride-sharing, cities quickly decided to maintain tight control over scooter companies, including by offering only short-term operating permits. Cities also charged scooter companies for those permits, rather than seeing them as offering an amenity to citizens. The article does blame the companies for accepting the terms that cities set, even though the companies could see that there was no hope of being profitable under those conditions. An article in Wired details loads of mismanagement at Bird, once valued at $2.5 billion.
Where do the confusing indicators about EVs and the disappearance of some scooter companies leave us? I'd say we're left in the middle of a transition that will be messy at least for several years.
EVs will still march forward, but maybe in fits and starts, depending on government incentives for purchases, on the buildout of charging infrastructure to allay range anxiety, on changes in consumer perceptions and so on.
I can imagine some sort of new model emerging, where maybe I use my (soon-to-be) EV for driving around town and for short trips but someone patches together for me some combination of public transportation and car rental if a trip would require more than one charging stop en route.
In any case, the effect of the EV trend on auto insurers may not happen as fast as some of the pledges about ending ICE sales by 2035 would suggest.
The problems with scooters suggest that cities are going to have to adapt their basic design if they want to be more people-friendly and less focused on being car-friendly. That process, too, will happen in fits and starts, subject to the push and pull of local politics and lobbying by companies and citizens.
My hope is that autonomous cars will recover from their recent black eye and improve to the point that cities can do away with on-street parking -- who needs parking if cars just keep moving? Just think about how much room that would create in cities for scooters, bikes and anything else city designers could want.
That won't happen soon -- but something will. An awful lot of pieces of our transportation model are in flux at the moment.
Cheers,
Paul