This is going to be a big year for battery-electric vehicles, with a wave of new products heading to market and forecasters predicting record sales.
It certainly won’t hurt demand that the overwhelming majority of current owners expect to buy or lease another BEV when it’s time to trade in, according to a new study. While battery power has so far attracted motorists who put a premium on environmental issues, interest in is growing. Even mainstream shoppers more focused on operating costs, performance and other factors are showing interest, the research by Plug In America reveals.
“EV buyers love their cars, even there are challenges along the way,” said Joel Levin, executive director of Plug In America, an EV owners advocacy group. And among those who don’t own an EV, traditional issues, such as range anxiety are “becoming even less of a concern” as new, longer-range models come to market.
New models expected to spur booming sales
Last year, battery-electric vehicles accounted for about 1.9% of total U.S. new vehicle sales, according to industry data. A new study by IHS Markit predicts that will reach 2.5% for all of 2021. And that number underscores the increase in demand because the overall U.S. market is expected to post 9% post-COVID growth.
Current owners trading in will make up a large chunk of the BEV market, analysts believe. Fully 96% of those now driving a plug-based vehicle plan to trade in on a new one, the new by Plug In America study finds. The numbers are close to 100%, in fact, for those who own a pure battery-electric model, said Levin. “The only people not likely to (buy again own) a plug-in hybrid.”
EV owners still list the environment as their number one reason for purchase, according to the study. But “the environment is somewhat less of a concern,” said Levin, for those just now considering their first EV.
Motorists find plenty of other advantages, including the lower cost of ownership. EVs still cost more to buy than conventional, gas-powered vehicles. But a separate report released by Consumer Reports late last year indicated that, on a per-mile basis, they cost barely half as much to operate. Credit lower energy costs and the need for less scheduled maintenance, such as tuneups and oil changes.
Potential buyers still have plenty of concerns
There are still plenty of concerns among the general car buying public, said Levin, during a Zoom interview, especially range anxiety. “As range gets longer” with new products like the Ford Mustang Mach-E and Volkswagen ID.4, however, “it becomes even less of a concern.”
The increased performance offered by the latest wave of EVs will also help build interest, said Levin. Thanks to the instant torque offered by electric motors, the latest crop of battery cars are significantly faster than those offered just a few years ago.
“We found the best way to convert someone is to let them drive an EV,” said Levin.
New tax credits needed to spur sales
One thing that could hurt the EV market is the phase out of federal tax credits, said Levin. Both Tesla and General Motors no longer can offer the $7,500 incentives after hitting a Congressionally mandated sales threshold. Nissan and Ford are approaching the phase-out point, as well.
“It certainly hurts the market, especially for those who want to buy American,” said Levin.
The Biden administration has been exploring the possibility of not only extending but also expanding those credits, noted Levin. The new president also has called for setting up a nationwide network of 500,000 public charging stations, something Plug In America sees as critical to widespread EV adoption.
Dealers offer little help
One of the challenges for those interested in EVs is getting help at the dealership. Among those who’ve gone to a showroom, only 15% rated the knowledge of their salesperson as “very high,” and 40% as “high” or better.
If anything, said Levin, most shoppers are now doing their homework online so they already know more than a salesperson when they walk into the showroom. In line with the rest of the market, a growing number of EV customers are doing at least some of the buying process online – some never stepping foot in a showroom.
Until now, EV buyers tended to be relatively affluent “innovator” personalities interested in both technology and the environment. That’s likely to change going forward. With longer-range, more affordable EVs coming to market, and with other barriers to entry falling, the Plug In America study suggests that future buyers will be a bit younger, less affluent and, in general, far more mainstream.