EV Demand Hits a Speed Bump
After years of significant growth, consumer demand for electric cars slowed in 2024, according to consumer insights company J.D. Power. Since 2021, the company has been conducting its annual Electric Vehicle Consideration (EVC) study, with each year showing significant gains in EV consideration; 2024 marked the first year that consideration of EVs actually dropped.
The 2024 J.D. Power EVC study, which surveyed over 8,000 consumers between January and April 2024, revealed that 24 percent of shoppers said they are “very likely” to consider purchasing an electric car as their next vehicle – a very slight drop from 26 percent in 2023. The number of shoppers who said they were “overall likely” to consider an EV as their next car dropped from 61 percent in 2023 to 58 percent in 2024.
While those numbers are not significant drops, they do highlight that electric cars have passed the early adopter stage and are fully in the mainstream. In past years, EV buyers, primarily at the higher end of the market, were willing to overlook some compromises and hiccups in order to driver a vehicle with the latest tech and to save hundreds of dollars a month on gas. These higher-end buyers were far more likely to be able to charge at home, for the most economical and most convenient ownership experience.
EV Incentives: Why Are They Important
Now, though, as EVs enter the mainstream, issues like affordability and public charging access are more important than before. EVs continue to be more expensive than their gasoline equivalents – and J.D. Power found that 40 percent of shoppers said they didn’t have a solid understanding of the EV incentives available to them.
These incentives, such as the $7,500 federal tax incentive, now available through dealers, can significantly improve EV affordability – but a significant number of consumers and dealers don’t understand them, or their effect on the price of a vehicle. (The incentive, which is available on a select few vehicles if purchased or financed, can be applied to almost all EVs if they are leased.)
“As understanding of EV incentives rises, so does the likelihood of consideration, said Stewart Stropp, executive director of EV intelligence at J.D. Power. “However, approximately 40 percent of shoppers say they do not have a solid understanding of such incentives. Prioritizing initiatives and efforts to educate consumers about the EV proposition—including available incentives and how they work—is vital to accelerating market growth.”
Our GreenCars interactive incentive tool can help here: simply choose the vehicle you are considering, enter your location and a couple of small details, and you’ll find all of the incentives available to you, from the federal incentive to regional and local programs you may not be aware of.
Charging Remains a Roadblock Despite More Infrastructure
Charging was the main reason shoppers rejected an EV as their next vehicle. Among buyers that said they were “somewhat” or “very unlikely” to consider an electric car, 52 percent cited a lack of charging station availability – a 3 percent increase compared to 2023. This number increased despite the fact that there are more charging stations available than ever, and despite the fact that most manufacturers have signed agreements with Tesla to provide access to the company’s excellent Supercharger network.
Clearly, public charging is important to American consumers – for those taking longer trips, convenient charging access is vital, and it’s also important for drivers that live in shared accommodations like apartment buildings, where a dedicated home charger isn’t yet an option. Digging deeper into the data, the inability to charge at home or at work was another reason that buyers rejected EVs in 2024.
Interestingly, for the first time, drivers with longer commutes were less inclined to consider EVs than in years past. With fuel prices coming down, the cost advantages of driving an EV, while still significant, aren’t as great as before – and rising anxiety about charging on the go has reversed the trend of long-distance drivers considering EVs. In fact, among drivers who regularly commute over 45 minutes each way, only 24 percent now say they are “very likely” to consider an electric car – a drop of 13 percent compared to 2023.
Other Factors Affecting EV Demand
High inflation and high interest rates didn’t help EV consideration either – making EVs less affordable for many that would purchase or lease based on monthly payments. Manufacturers across the spectrum have delayed the introduction of new, more affordable models, shifting their focus towards more profitable hybrids and plug-in hybrids – which still offer buyers substantial fuel savings, with increased flexibility for long trips.
“In previous years, the number of viable EVs that met shoppers’ needs increased substantially year over year,” said Stropp. “This year, it’s been more incremental. Several automakers have deferred EV launch and production plans. We’re seeing a lot of shoppers who still haven’t found an EV that checks all the boxes.”
Gen Y and Gen Z Shoppers Still Bullish on Electric
Gen Y and Gen Z car shoppers continued to be the most positive about EVs, though even these generations saw small decreases in consideration. Still, 32 percent of Gen Y and 24 percent of Gen Z shoppers were “very likely” to consider an electric vehicle, down just 5 percent and 2 percent compared to 2023, respectively – the highest ratios of the generational cohorts surveyed.
Shoppers who were adding an additional vehicle to their household – rather than choose their only car – were also far more likely to consider an EV. 68 percent of shoppers looking for an additional vehicle were “overall likely” to go electric, compared to 47 percent for single-car households. Having access to a gasoline or hybrid vehicle for long trips makes life with an EV much easier; conversely, without access to a second vehicle, shoppers are understandably more critical of the logistics that come with EV ownership.
J.D. Power’s Stuart Stropp summarized this year’s survey by saying: “As the industry inches toward mass consumer adoption, the main roadblocks to getting consumers behind the wheel of an EV are the continued shortage of affordable vehicles, charging concerns and a lack of knowledge regarding the EV ownership proposition, including incentives.”
