US EV Purchase Consideration Up. Income Matters

Shoppers in America are more likely than ever before to consider buying a fully electric vehicle (EV). New EV entries are responsible for much of the added consideration. These new EVs, many from long-established vehicle manufacturers, are turning EV skeptics into likely EV considerers, according to the J.D. Power 2022 U.S. Electric Vehicle Consideration (EVC) StudySM. The percentage of shoppers who say they are “very likely” to consider an EV for their next purchase or lease rose to 24%, four percentage points higher than a year ago.

However, “The addition of new EV models has moved the needle on consumer consideration,” said Stewart Stropp, senior director of automotive retail at J.D. Power. “In fact, several new models from perennial mass market brands are at the top of that consideration list. Even so, more remains to be done in terms of transitioning from early to mass adoption. Though the study findings show a shift in favor of EVs, about 76% of new-vehicle shoppers say they are not ‘very likely’ to consider buying one.”

EV adoption correlates with shoppers’ living and working situations. “There is a substantially higher ratio of shoppers who own their home who say they are “very likely to consider” an EV (27%) than those who rent (17%). Not only are homeowners more affluent, on average, but are more likely to be able to charge an EV at their residence. Perhaps most tellingly, 34% of those who indicate they are unlikely to consider purchasing an EV say they lack access to any charging capabilities at home or work,” said Stropp.

The study, now in its second year, finds that the more vehicle owners drive, the more they are likely to consider an EV. Commuters who are encountering higher fuel prices are rational candidates to switch to EVs; Those who take frequent vacations and road trips might be assumed to be less likely to adopt EVs. However, “like heavy commuters, heavy road-trippers have a higher EV purchase consideration tendency than those who use their vehicles less often for this purpose. It could be an indication that frequent drivers are increasingly seeing the advantages of EVs compared with their gasoline-powered counterparts,” according to the study.

The study was undertaken before General Motors said this week it will drastically slash prices on its electric Chevrolet Bolt after the Detroit automaker had halted sales for six months following a battery recall. GM is cutting prices on the Bolt by around $6,000 and by as much as 18% for the lowest-price version, which will start at $26,595, down from $32,495. The Bolt EUV will start at $28,195 down from $35,695.

“This change reflects our ongoing desire to make sure Bolt EV/EUV are competitive in the marketplace,” GM said in a statement, adding “affordability has always been a priority for these vehicles.” GM is no doubt well aware that Tesla and five other EV companies have a market capitalization above $20 billion – meaning investors (speculators?) are saying there are  at least six plausible new EV makers – even if they have limited output with more press releases issued than vehicles built.

Echoing last year’s findings, the 2022 Power study shows that firsthand experience with EVs is significant in purchase consideration. Only 11% of study respondents who had no personal experience at all with EVs say they are “very likely” to consider an EV. That percentage more than doubles to 24% among those new-vehicle shoppers who have simply been a passenger in an EV. IT goes to 34% among those who have driven an EV. Owners of EVs are also sold on the technology, as 48% of owners say they are “very likely” to consider another EV for their next vehicle purchase.

Key findings of the 2022 study

EV consideration stronger among premium buyers: Since purchase price continues to play a prominent role in the vehicle purchase process, and because EVs often have higher price tags than their gas-powered counterparts, it is not unexpected that EVs are finding more favor among premium buyers than mass market buyers. Some 37% of premium vehicle owners indicate they are “very likely” to consider an EV for their next purchase vs. just 21% among those who currently own mass market vehicles.

EV consideration by owners of mass-market vehicles on the rise: Though premium vehicle owners remain more likely to consider EVs than owners of mass market vehicles, the owners of mass market vehicles increasingly register an interest in buying an EV. The year-over-year increase in those who say they are “very likely” to consider an EV is up six percentage points among owners of mass market vehicles and up one percentage point among owners of premium vehicles. This suggests some owners of mass market vehicles are receptive to more affordable EVs.

More information engenders more consideration: The study reinforces findings from a year ago that a lack of information about EVs is a key factor in shoppers’ rejection of them. Nearly one-third (30%) of rejecters cite a lack of information as a reason for their lack of consideration. Because firsthand experience with EV technology is still not entirely commonplace, shoppers need to be better informed about the ownership experience they offer.

EV consideration by geographic location: It is not unexpected that new-vehicle shoppers in the West region show the highest proclivity for EV purchase. Some 31% of those in the West say they are “very likely” to consider an EV. Surprisingly, the South (26%) tops the Northeast (22%) among those who say they are “very likely” to consider an EV. The North Central is at 22%.

Legacy automakers turn in strong showing: Owners of numerous mass market brands express an increased interest in EVs from a year ago. At the same time, owners of several premium brands, including Tesla, express somewhat less interest in making their next vehicle an EV.

 

This entry was posted in electric vehicles, marketing, news analysis and tagged , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published.