Misconceptions about EVs hindering demand

Cost and practicality are deterring customers from buying electric vehicles, according to a Cox Automotive study. But Cox says much of the concern is based on misconceptions.

Cox surveyed 2,503 consumers and 308 franchised dealers who sell EVs as part of its latest Evolution of Mobility study, and 40 percent of the consumers said they would not consider buying an EV.

"A lot of it is misconception and an education opportunity for manufacturers and dealers," said Rachelle Petusky, manager of research and market intelligence for Cox Automotive's mobility group. "Their understanding of EV is based on what was happening in the market more than 15 years ago and is not based on the innovation that has come with the battery and being able to bring down the cost per kilowatt of the battery."

EVs accounted for 2.3 percent of U.S. sales this year through July, according to J.D. Power. But automakers plan to introduce dozens of new models in the coming years. The study indicates that for EV sales to take off, dealers and automakers must educate consumers on maintenance and the cost of ownership, and dealers need more incentives from automakers.

Another 40 percent of the consumers surveyed said they would consider an EV. About two-thirds of respondents who would consider buying an EV said it costs less to charge an EV than to fuel a gasoline vehicle, and 54 percent said an EV costs less to maintain. According to Cox, EV owners save an average of 25 percent on service and 60 percent on fuel over five years.

Range has also expanded faster than consumer understanding. The average consumer drives less than 150 miles per day, and most 2019 EV models have a range of more than 200 miles, according to Cox.

The number of vehicles with a range of at least 300 miles is expected to grow in the next two years.

"Some of the earlier models that were first released were 150 miles or less. But now we're seeing models that are 300 miles plus, which is comparable to gas-powered cars that are on the road," Petusky said. "Most drivers aren't driving more than 150 miles a day, so there's more than enough opportunity for them to charge their vehicle at home, at work or somewhere else where charging is offered in their community."

Some resistance to buying EVs stems from the availability of gasoline, she said. With gas stations widely available, consumers don't have to worry about running out.

"Consumers who are in more urban areas have less of a concern as it pertains to range," Petusky said. "It's more of a rural/suburban concern, which makes sense because they are having longer commutes and also are likely to have less infrastructure support in their local communities."

Tesla leads automotive brands in EV awareness, Petusky said. For other brands, spreading awareness is a top-down effort.

"It's going to take a lot of heavy lifting to continue to shift the consumer perspective and to overcome the two barriers that we have heard for several years now as the biggest concerns for EV," she said.

Surveyed dealers who said they were getting the right level of support from automakers reported higher sales of EVs than those who reported insufficient support.

For the most part, dealers "aren't feeling a sense of urgency from their manufacturers to hit EV sales goals," Petusky said. More than half of surveyed dealers also expect lower return on investment on EV sales, so sales incentives from automakers likely would motivate them, she said.

A commitment to EVs at the automaker level also would motivate dealers, she said. General Motors, for example, said it's focused on full-electric vehicles rather than hybrids.

"Having a strong stance like that definitely shows their dealers that they're definitely serious about electric," Petusky said.

Consumers also need more education about owning and operating an EV, the survey shows. More than half of consumers who would consider an EV said they expect dealers to provide a gasoline vs. EV cost comparison, a tutorial on operating an EV and tips for taking care of an EV. Fewer than half of dealers offer those services. Nearly half of the consumers expect a map of charging stations and a charging station installed at their home.

Petusky said the true read on EV adoption will come when more mainstream electric crossovers and SUVs arrive.

"Those are the segments that, when we look at gas-powered vehicles, continue to dominate new retail sales month after month," she said. "Right now, the majority of electrified vehicles are in the car segment."