Are EV Owners Going Back to Gas?
We often say here at GreenCars that once drivers go electric, they rarely go back. Industry research from firms such as J.D. Power generally show that EV owners fall in love with the driving experience, the technology, and the fuel savings that EVs offer. But, perhaps because of well-publicized concerns about charging station reliability, recent research from industry watcher S&P Global Mobility shows that overall EV loyalty may be experiencing a speed bump.
EV Loyalty at Its Highest Level Yet
On the plus side, according to S&P’s research, overall loyalty for electric vehicle owners to their fuel type – for both mainstream as well as luxury brands – has increased significantly over the past three years. Referencing global registration data, close to three-quarters of EV households stuck with EVs for their next vehicle.
But, says S&P, that number is driven largely by Tesla, the dominant player in the EV market, and a brand well-known for its intensely committed fan base. Strip Tesla out of the equation, and loyalty to electric vehicles drops quite sharply – to 52.1 percent for mainstream brands and around 60 percent for luxury brands. That means that around half of EV owners were considering a non-EV for their next vehicle.
S&P isn't the only industry watcher that has noted a decrease in EV consideration in 2023. According to the agency, EV consideration peaked at 81 percent in 2021, and has dropped to 52 percent in the third quarter of 2023, driven by concerns about high prices, inadequate infrastructure, and range. For some drivers, a hybrid or plug-in hybrid vehicle is a way to hedge their bets against some of those obstacles – while still doing their part to reduce fuel consumption and emissions.
What EVs Have the Strongest Loyalty?
Given their market dominance, it should be no surprise that Tesla tops the EV loyalty charts, with over 76 percent of Tesla owners considering another. Nissan had the next-strongest loyalty number, at over 63 percent, followed by Chevrolet at just over 60 percent. To be clear, those numbers reflect loyalty to electric cars in general – not to their specific brand.
Of individual EVs, the Chevrolet Bolt had the strongest EV loyalty figure, with 60.7 percent ready to purchase another, and almost 30 percent purchasing another Bolt. On the flip side, less than 40 percent of Ford Mustang Mach-E owners bought another electric car, with many switching to Ford truck and SUV models with both gasoline and hybrid powertrains – suggesting that the strong Ford brand, plus the vehicle type and capability, were more important than the fuel type. The Nissan Leaf, the first mainstream EV available in the U.S., had about 12 percent of owners switch to another Leaf, while about 14 percent switched to a Tesla. Other Leaf owners migrated to gasoline Nissan models.
Luxury EV Buyers More Loyal
Interestingly, loyalty to electric propulsion in the luxury market is much stronger. The EV loyalty rate across the luxury segment has stayed above 60 percent for the last 18 months, and has been above 70 percent for all of 2023.
While that’s an impressive figure, it’s once again driven by Tesla, considered by S&P to be a luxury brand due to its higher transaction prices. Strip Tesla out and some brands’ customers, such as Mercedes-Benz and Jaguar, remained loyal to EV driving, while more Porsche and BMW owners switched to a hybrid, plug-in hybrid, or gasoline vehicle compared to electric. About half of Audi EV customers stayed with EV.
On the plus side, almost all luxury brands improved their EV loyalty rate significantly compared to a year ago. BMW was the exception – three years ago, it had the highest EV loyalty rate, but that percentage has remained stagnant.
Nuances in the Numbers
The variable EV loyalty rates found by S&P Global Mobility highlight the challenge faced by many legacy car brands.
"The OEMs are spending huge amounts of money to develop EVs," said Tom Libby, the firm's associate director for loyalty solutions and industry analysis. "So the last thing they want is for an EV owner to go back to ICE."
But he notes that one thing S&P’s data does not capture is whether an EV has been replaced by another EV. The new purchase, in other words, could be a replacement for a different household vehicle.
What will EV buyers do when they come back to market for a new vehicle in the next few years? Time will tell whether they will buy one of the over 200 electric cars expected to be available by 2026. But it’s clear that the EV market is more complex than before – and that internal combustion vehicles still are a strong draw for capabilities like towing and payload capacity. Legacy automakers face an uphill battle to increase EV loyalty during the next few years.