Guest Column

Beyond range anxiety: The social dynamics powering EV adoption

Advancements in charging technology also play a critical role to EV adoption.

Imagine a world where electric vehicles are as commonplace as smartphones. Not so long ago, this seemed like a distant dream, primarily due to the dreaded “range anxiety.” But today, the landscape is shifting dramatically thanks to a mix of technical advancements and social dynamics.

In 1996, General Motors' EV1 emerged as the first modern-day all-electric vehicle, boasting a modest range of 74 miles – adequate for city driving but limiting for longer trips, especially with public charging stations scarce. For the next 15 years, this narrative was slow to change.

Fast forward to today: The Lucid Air boasts an estimated range of 516 miles, more than the average gasoline-powered car can travel on a single tank. In 2022, the average range of an electric car sold in the U.S. reached 291 miles. By May 2023, more than 138,100 public charging outlets were available nationwide. Despite a concentration of these stations in California, the trend is evident: EVs now offer unprecedented range, complemented by an ever-growing network of charging stations.

Yet, the specter of "range anxiety" lingers. Why?

The answer lies not in statistics or technology but in human behavior. A recent study of new EV registrations in 11 U.S. markets revealed a "cluster effect" in EV adoption. Prospective buyers are often influenced by EV owners within their social circles ― neighbors, family, or colleagues. This phenomenon, sometimes known as peer pressure, social contagion, or the “neighborhood effect,” underscores a simple truth: seeing is believing. In other words, the best predictor of a person driving an EV is someone in their inner circle driving one first. (As an EV driver, my own experience resonates with this finding. Three of my friends switched to EVs after hearing about how much my family was enjoying ours, and how much we were saving.)

The report cited two key factors of peer influence in helping new EV drivers overcome possible sources of anxiety, like range limitations. The first factor ― interpersonal communication and persuasion ― includes observation of specific choices (i.e., a new Tesla in the neighbor’s driveway), word-of-mouth communication, and the influence of trusted community leaders. The second ― normative social influence ― holds that social norms are passively communicated as shared standards of behavior within a group. Even without talking to the neighbor, the sight of their new Tesla suggests that driving one allows you to “fit in” too.

If peer influence helps convince EV buyers that range is no obstacle, charging stations are doing their part to influence cluster buying as well. California had more than 14,000 of the nation’s 51,000 public charging stations as of March and also the highest number of registered EVs. Consumer Reports reported in June that “charging logistics” was the number-1 reason holding back potential EV buyers. It only makes sense that the threat of a broken EV charger or a long stretch of road without one is lessened where more chargers are available. The number of public charging stations has increased by 40 percent since Jan. 2021, and figures to rise further as public- and private-sector investment dollars flow into public charging.

More than the availability of public charging stations, the ability to charge one’s EV at home overnight is a practical antidote to range anxiety. Charging overnight can add 40 to 50 miles of range, enough for an average driver on an average day. A 2022 survey by J.D. Power indicated 27 percent of homeowners are "very likely to consider” buying an EV, compared to 17 percent of those who rent. “Not only are homeowners more affluent, on average,” the report notes, “but are more likely to be able to charge an EV at their residence.”

Here too, the cluster effect makes sense. In areas where renters are concentrated (think apartment complexes), all it takes is one EV driver to inform their neighbors where the nearest charging stations are, eliminating a logistical barrier to range anxiety. In areas where homeowners are concentrated (think new-construction suburban communities of family homes), all it takes is one EV driver to demonstrate the utility of overnight charging in a standard garage or driveway outlet.

Advancements in charging technology also play a critical role. The advent of affordable Level 2 chargers and ultra-fast Level 3 chargers, like Electrify America's 20 miles-per-minute chargers, further eases range concerns.

The availability and affordability of charging technology might be the best weapons in the fight against range anxiety, but they are of little use without a first-hand introduction on the part of someone in your social circle. The key to accelerating EV adoption lies in nurturing these social “clusters,” fostering a network of influence that propels us towards an electrified, sustainable future. In this journey, our greatest allies are the conversations in our living rooms, the examples in our driveways, and the shared experiences within our communities. As these clusters expand, they forge a path toward a cleaner, more environmentally conscious world.

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Kate L. Harrison is the co-founder and head of marketing at MoveEV, an AI-backed EV transition company that helps organizations convert fleet and employee-owned gas vehicles to electric, and reimburse for charging at home.

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A View From HETI

Lawyers for a Tesla shareholder who sued to block the pay package contended that shareholders who had voted for the 10-year plan in 2018 had been given misleading and incomplete information. Photo via cdn.britannica.com

For a second time, a Delaware judge has nullified a pay package that Tesla had awarded its CEO, Elon Musk, that once was valued at $56 billion.

Last week, Chancellor Kathaleen St. Jude McCormick turned aside a request from Musk's lawyers to reverse a ruling she announced in January that had thrown out the compensation plan. The judge ruled then that Musk effectively controlled Tesla's board and had engineered the outsize pay package during sham negotiations.

Lawyers for a Tesla shareholder who sued to block the pay package contended that shareholders who had voted for the 10-year plan in 2018 had been given misleading and incomplete information.

In their defense, Tesla's board members asserted that the shareholders who ratified the pay plan a second time in June had done so after receiving full disclosures, thereby curing all the problems the judge had cited in her January ruling. As a result, they argued, Musk deserved the pay package for having raised Tesla's market value by billions of dollars.

McCormick rejected that argument. In her 103-page opinion, she ruled that under Delaware law, Tesla's lawyers had no grounds to reverse her January ruling “based on evidence they created after trial.”

What will Musk and Tesla do now?

On Monday night, Tesla posted on X, the social media platform owned by Musk, that the company will appeal. The appeal would be filed with the Delaware Supreme Court, the only state appellate court Tesla can pursue. Experts say a ruling would likely come in less than a year.

“The ruling, if not overturned, means that judges and plaintiffs' lawyers run Delaware companies rather than their rightful owners — the shareholders,” Tesla argued.

Later, on X, Musk unleashed a blistering attack on the judge, asserting that McCormick is “a radical far left activist cosplaying as a judge.”

What do experts say about the case?

Legal authorities generally suggest that McCormick’s ruling was sound and followed the law. Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, said that in his view, McCormick was right to rule that after Tesla lost its case in the original trial, it created improper new evidence by asking shareholders to ratify the pay package a second time.

Had she allowed such a claim, he said, it would cause a major shift in Delaware’s laws against conflicts of interest given the unusually close relationship between Musk and Tesla’s board.

“Delaware protects investors — that’s what she did,” said Elson, who has followed the court for more than three decades. “Just because you’re a ‘superstar CEO’ doesn’t put you in a separate category.”

Elson said he thinks investors would be reluctant to put money into Delaware companies if there were exceptions to the law for “special people.”

What will the Delaware Supreme Court do?

Elson said that in his opinion, the court is likely to uphold McCormick's ruling.

Can Tesla appeal to federal courts?

Experts say no. Rulings on state laws are normally left to state courts. Brian Dunn, program director for the Institute of Compensation Studies at Cornell University, said it's been his experience that Tesla has no choice but to stay in the Delaware courts for this compensation package.

Tesla has moved its legal headquarters to Texas. Does that matter?

The company could try to reconstitute the pay package and seek approval in Texas, where it may expect more friendlier judges. But Dunn, who has spent 40 years as an executive compensation consultant, said it's likely that some other shareholder would challenge the award in Texas because it's excessive compared with other CEOs' pay plans.

“If they just want to turn around and deliver him $56 billion, I can't believe somebody wouldn't want to litigate it,” Dunn said. “It's an unconscionable amount of money.”

Would a new pay package be even larger?

Almost certainly. Tesla stock is trading at 15 times the exercise price of stock options in the current package in Delaware, Morgan Stanley analyst Adam Jonas wrote in a note to investors. Tesla's share price has doubled in the past six months, Jonas wrote. At Monday’s closing stock price, the Musk package is now worth $101.4 billion, according to Equilar, an executive data firm.

And Musk has asked for a subsequent pay package that would give him 25 percent of Tesla's voting shares. Musk has said he is uncomfortable moving further into artificial intelligence with the company if he doesn't have 25 percent control. He currently holds about 13 percent of Tesla's outstanding shares.

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