It's Not About Gas Prices
With the price of gasoline on the rise you’d think that Americans would be flocking to electric vehicles, looking to save hundreds of dollars a month on fuel costs, as well as accessing the performance and environmental benefits that come with EV ownership. But, according to a survey by industry watchdog Autolist, which surveyed over 1,300 consumers in early 2022, vehicle prices and range are most on the minds of U.S. consumers – not gasoline savings.
The survey, which ran through April and May 2022 – at the height of the gas price surge – gauged interest and opinions on all things EV. It reveals that the major sources of anxiety are vehicle price, range, and charging infrastructure – the same concerns that were at the top of shoppers’ lists in 2019, when Autolist first began its survey. This despite many new and cheaper electric vehicles hitting the market, and gas prices at historic highs.
48 Percent Say EVs "Too Expensive"
Price – not range – is now the primary barrier to shoppers’ consideration of an EV. Indeed, Autolist’s survey found that even more people, on a percentage basis, were concerned about EV prices in 2022 than they were in 2019.
While there have been many inexpensive EVs introduced in that time period, many more expensive EVs have also hit the market – and have gotten plenty of media attention. The flagship models with the latest technology and longest range are often six-figure luxury vehicles out of reach of regular families. This suggests that auto makers need to do a better job of communicating the wide variety of EVs available at all price points.
EV prices are not set to decrease, for many reasons. After years of battery prices declining due to improved economies of scale, their cost has been rising again, due to increasing global demand for raw materials as well as instability in certain parts of the world. Supply chain disruptions, inflation, and other factors have pushed the prices of batteries up, which will also push up the prices of EVs.
The incentive landscape is changing, too. In August 2022, Congress passed new legislation – the Inflation Reduction Act of 2022 – which changes credit amounts and eligibility requirements for clean energy vehicles, including electric vehicles and plug-in hybrids. Under the new Act, only vehicles whose final assembly is completed in North America qualify for clean energy vehicle credits. This means that many vehicles that previously qualified for clean energy incentives are no longer eligible.
Further complicating the issue is that some models are built in multiple locations, meaning some vehicles of the same nameplate meet the final assembly requirement, while others do not. The Department of Energy has a list of model year 2022 and early model year 2023 electric vehicles that may meet the final assembly requirement here (https://afdc.energy.gov/laws/inflation-reduction-act).
Price caps are also in place: passenger cars priced at over $55,000 and vans, trucks, and SUVs priced at over $80,000 are no longer eligible for credits.
You can use the GreenCars incentive tool to check what incentives are available on the vehicle you are considering.
Range and Infrastructure Concerns
The next two concerns – range on a single charge and lack of sufficient public charging infrastructure – are no surprise as these items top most surveys’ lists of EV concerns. It’s interesting that range, which has historically been the top concern of American consumers, is now the number-two concern, suggesting that the latest models being promoted have sufficient range for most Americans’ needs. 44 per cent of respondents cited range as an issue.
Lack of sufficient charging infrastructure, at 36 per cent, is a real concern as many Americans drive longer distances and aren’t willing to put up with long waits to charge their vehicles – we’re used to filling up in five minutes, not twenty-five (on the fastest public charger).
Bright Lights in EV Consideration
While many Americans still aren’t ready to make the leap to EVs, Autolist did note that the type of EV respondents were most interested in has evolved. Midsize EV crossovers are still the top consideration – they were in 2019 as well – which makes sense, as they’re simply the most popular body style for any vehicle on the market.
What’s interesting is that the second-most popular style of EV being considered are pickup trucks – which in the broader market are the most popular vehicles on the road. In 2019, there were simply no electric pickup trucks available, but in the intervening three years, they’ve gone from a “what-if” to a reality in the marketplace. The Ford F-150 Lightning is just around the corner, Rivian R1T deliveries have begun, there’s a new electric Chevrolet Silverado coming, and Ram has promised a new 1500 electric pickup for 2024. The arrival of these pickups could be a huge turning point for EVs in the US, and they have the potential to convince many buyers to go electric who otherwise may never have considered an EV.
The way that respondents would use an EV is changing for the better, too. 59 percent of respondents said they would use their EV as the primary vehicle in their household, a big rise from prior years, with 19 per cent saying it would be a secondary vehicle. That well over half of those surveyed would use an EV as their main vehicle suggests more and more Americans are into the idea of having an EV in their household – it’s just a matter of overcoming the perceived differences people see between EVs and gasoline vehicles.