Even as U.S. consumers increasingly embrace electric vehicles and heat pumps, supply chain bottlenecks may arise from established networks of fossil car dealers and HVAC installers who are still heavily invested in legacy technologies.
The concern emerging in the U.S. may actually point to a difference between the U.S. and Canadian markets—over the weekend, Clean Energy Canada reported that EV demand is still surging and supplies are still insufficient in Canada. The Vancouver-based added that data based on showroom sales paints an incomplete picture when EVs “have upended the traditional dealership model” that applied to internal combustion vehicles.
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In the U.S., government support for EV makers and buyers, standardization of charging technology, and an expanding availability of models helped drive EVs up to 6.5% of new car purchases in the first half of 2023, “up from 2.5% two years ago and 0.7% in 2018,” Bloomberg News wrote earlier this month. But the data showed signs of a serious attitudinal roadblock ahead. Only 31% of 150 U.S. auto dealers surveyed believe that “EVs are the future and will largely replace gas engines over time,” found Cox Automotive Inc.
Moreover, nearly half the dealers felt that “EVs need to prove themselves to the marketplace,” a position at odds with the more than 50% of consumers polled who believe the technology is more than ready for prime time.
Dealer reluctance to embrace EVs bodes ill, Bloomberg wrote. “If only one-third of dealers believe that EVs are the future, they are less likely as a group to proactively build sales and support functions for EVs. If dealers think the cars themselves need to prove their worth, they are unlikely to educate themselves on current and future models and their potential appeal to the market.”
The refusal of car dealers to skate where the puck is headed—to the point of them trying to enshrine their incumbent status through legislation—could leave them increasingly on the sidelines, said Bloomberg, with brands like Tesla that eschew traditional dealerships netting the goals.
Heat pump uptake also risks being slowed by an “incumbent network” pushing back against new technology. American households bought more heat pumps than gas furnaces for the first time ever last year, but heating, ventilation and air conditioning (HVAC) contractors’ reluctance to learn the installation guidelines could slow things down.
“Contractors may not be familiar with the latest options, they may have existing sales channel relationships limiting their access to the latest and greatest, and they fear bad reviews,” writes Bloomberg.
Recognizing the urgent need for installer education, the U.S. Department of Energy is now heavily involved in training established and upcoming HVAC professionals on heat pump technology, assisting in almost 80% of all HVAC training programs in the country.
Ensuring all-systems-go on EV and heat pump adoption will be critical to reaching net-zero by 2050 targets, Bloomberg noted. Of the US$194 trillion in investment that BloombergNEF estimates will be needed to hit that target, 51% will be spent on these two technologies.
