The Biden Administration has unveiled a $2 trillion infrastructure plan that includes spending up to $174 billion to encourage Americans to switch to electric cars and trucks. But a study by CarGurus Inc. released this week finds Americans may need less encouragement than originally believed.
Tesla is the current EV market leader in reputation and purchase consideration but in this emerging space, buyers are excited by the possibilities and less brand loyal so there is a good chance for competitors to disrupt.
The CarGurus research highlights a growing interest in owning an electric vehicle (EV). “We see rapid ‘mainstreaming’ of EVs among car owners,” reported the online marketplace in the CarGurus 2021 Electric Vehicles Sentiment.
Survey results support this conclusion. CarGurus surveyed 1,097 U.S. automobile owners to gauge their views on EVs. Over half of the respondents (52%) say they expect to own an EV in the next 10 years; a figure that’s risen 34% since 2018.
In total, 56% of respondents said they were “excited” about EV developments; 30% reported plans to own an EV in five years; and 52% thought they’d own an EV in 10 years.
Translating Interest Into Sales
But the survey revealed demand won’t translate into sales unless certain conditions exist. The top ranked condition centered on charging stations with 65% of respondents saying they will consider an EV “if charging stations are available in my area.”
Today the U.S. has around 41,400 EV charging stations, with fewer than 5,000 being rapid chargers, according to the Department of Energy. Fewer than 5,000 are fast chargers. But the proposed infrastructure bill earmarks funds to install 500,000 charging stations across the U.S. by 2030.
Other conditions respondents say will encourage EV adoption include ease in finding replacement parts and batteries (62%); if long-term fuel and maintenance savings outweigh the higher asking prices (56%); available tax incentives and rebates (56%); extended warranties (53%); good expected retail value (51%); cleaner battery production (48%); and “if electric vehicles become more mainstream” (46%).
Gas prices also factor into EV purchases, with 26% of respondents saying they will consider an EV if gas prices reach $4 a gallon and 57% saying they will buy an EV if gas prices hit $5 a gallon. Gas prices have some distance to go before they hit these markers. A recent AAA Fuel Gauge Survey reports the average national price of regular gas is $2.86 a gallon.
With EV market growth on the horizon, CarGurus offered a few suggestions for dealers hoping to capture a share of the market. Their recommendations include:
- Put EVs alongside gas-powered vehicles on the lot. Don’t hide them in the back where buyers may miss them.
- Acquire a handful of used EVs. Though most EV buyers prefer to buy new, 45% said they would buy CPO and 42% would buy used.
- Train staff how to talk to potential buyers about EVs. A buyer might not buy an EV today, but they may in the next five to 10 years. The educational process starts now.
Preferred EV Manufacturers
When potential automobile buyers decide to jump into the EV market, which automaker will get their business?
Tesla topped the list with 57% of respondents saying they will consider that brand. But other automakers are closing in. Toyota and Honda trailed just behind Tesla at 52% and 45% respectively. But 80% of those saying they plan to own an EV in the next decade report being open to “several brands” of electric vehicles.
“Tesla is the current EV market leader in reputation and purchase consideration but in this emerging space, buyers are excited by the possibilities and less brand loyal so there is a good chance for competitors to disrupt,” CarGurus reported.
Survey respondents also ranked the body styles of EVs they were most likely to consider, with 67% of respondents saying they’d consider a SUV/crossover vehicle. Sedans followed at 61%, while just 27% favored hatchbacks, 20% favored pickup trucks, 14% favored minivans, and 17% favored something else, e.g., coupe, convertible, and wagon.
The survey also had respondents rank newer electric models. Of the respondents noting they planned to own an EV in the next decade, 40% said they would consider the Chevrolet Bolt or EUV compared to 34% who would consider the Ford Mustang Mach-E. In the pickup truck segment, the Tesla Cybertruck edged ahead with 40% interested in the Tesla; 32% in the Ford F-150 EV and 17% in the GMC Hummer EV.