Required Apps & Financial Gatekeeping Are Slowing EV Adoption

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As we’ve seen from the regular market reports here on CleanTechnica, global EV uptake is now shifting from early and affluent adopters towards mass market. The fearmongering and chicken vs. egg issues of charging infrastructure are giving way to the unavoidable reality that EVs are better to drive and cheaper to own and operate. But what if there was a far more basic reason holding down EV adoption.

That reason is financial gatekeeping, a catch-all term that describes the many ways individuals and institutions limit, control, or charge for access to financial products and services. Think about getting approved for a credit card or having a fee-free checking account with free bill pay. The new landscape of mobile financial transactions means gatekeeping takes the shape of services that require their own smartphone app and linked credit card, and thus access to both. The interface between mobile transactions and new charging infrastructure is being marketed as convenient and technologically advanced, but as we move from early affluent adopters to mass market, and especially to the lower income market, convenience becomes a false economy.

In the United States, 4.2% of households are unbanked and an additional 14.2% are underbanked, meaning they have no checking or savings account or they use non-bank financial services such as money orders and check cashing as well as alternative credit sources like payday loans. That’s almost 25 million households without the mainstream credit and financial transaction services required to access and use a charging network. Moreover, for common services, cash is still king. At gas stations, credit and debit cards are used for the majority of fuel purchases, but 21% of consumers are using cash for those transactions, and for a wide variety of reasons. While 91% of Americans now own a smartphone, that number hides the frequency with which users struggle with maintaining data plans, not to mention what happens when you need to use a mobile financial app but have no service or your phone is dead.

Those with access to home charging know it is one of the greatest benefits of driving an EV, as it means not making trips to a gas station and it costs much less than public charging. In most markets, a sizable portion of drivers will lack access to home charging and we can expect that lower-income EV owners will disproportionately have to use public charging for this reason. Public chargers are almost always unattended and sometimes the convenience aspects of that are pretty great. Anyone who has run out of gas late at night and finds all the gas stations closed can appreciate being able to use a public charger at any time. However, this convenience is based in the assumption of credit card and smartphone access. Even the chargers at gas stations are typically part of national charging networks like EVGo or ChargePoint, and you can’t actually charge your EV and then go inside to pay where you might be able to pay with cash. Having an attendant means increased reliability, safety, and payment flexibility.

The combined effects of financial gatekeeping and smartphone app requirements limit EV uptake in several ways. The things that make public charging feel convenient to those with access become confusing and frustrating, especially when these are the early experiences of someone considering an EV as their next vehicle. These barriers make transportation more inequitable. Consider a young, new driver who doesn’t yet have their own bank account or credit card, the tech illiterate who have to navigate a different app for each charger they come across, or anyone who has lost or broken their phone or simply run out of battery. Financial gatekeeping also impacts tourism and rental fleets, as renters will have to access new apps, potentially in a different language, and have an acceptable payment method.

Public charging has to become more utilitarian to meet the needs of all drivers. Charger reliability has been discussed extensively, but the focus has typically been on the physical functioning of the hardware, network communications, and data management. What makes any system reliable is actually to focus on the most basic functions and make them universally accessible. Bells and whistles are fine, but the system will fail if it can’t function when any of those bells and whistles fail. Utilitarian systems may seem boring, but boring is good. Boring is predictable. Boring is understandable.

Fortunately, we already have models of how to do this effectively. Take a look at your electric bill and you’ll likely see five different ways to pay, including drop-offs at government or community buildings, or how to use a money order. Public transit systems also make it easy for anyone to pay for a ride typically by having ubiquitous kiosks that take multiple forms of payment, including cash, and dispense single use or reloadable transit passes. In heavy-use areas like airports and transit hubs, these kiosks often have attendants to help users navigate the pass system and complete payment. The rise of gift cards and money transfer apps present another opportunity to increase access. Regulation and common standards also have a role to play to ensure that the process of public charging becomes as simple and ubiquitous as filling a gas tank has become, and requiring common payment access for chargers built with public funding incentives.

One last bonus that may become a barrier to full EV adoption: battery lifespan. EV batteries are increasingly expected to outlive the body of the car. There is a huge market for low-cost cars at the end of their lifespan, but what happens when a 10- or 15-year-old car’s battery is worth more by itself for grid storage than the car is worth? Will we stop seeing late-life EVs available for purchase, and what will those who can only afford vehicles at those prices purchase instead?

By Nathaniel Hopkins