Electric car sales are on the uptick. In January 2023, EVs accounted for 7.1 percent of the U.S. new car market share. Broadening out to the first quarter of this year, most manufacturers are seeing massive sales increases, with Tesla, Ford, Volkswagen, and others seeing huge year-over-year improvements.
However, while consumer sales are one thing, a recent study from Ipsos revealed that consumer sentiment regarding EVs might be falling. The multinational market research agency recently gauged consumer interest in electric cars, and for the first time since its 2019 study, consumer consideration fell.
BEV Intended Consideration: Next Purchase
- 2019: 27%
- 2020: 30%
- 2021: 36%
- 2022: 49%
- 2023: 48%
While the drop in percentage wasn't by a massive margin, it still was a decrease in a series of increases. What was the cause of this reduction? According to the pollsters, "Driving range and battery life cannot yet measure up to what traditional ICE vehicles provide. The charging experience (time and reliability) does not meet the expectations of potential buyers. Cost-related worries make it difficult for BEV considerers to pull the trigger with any certainty."
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However, despite the sentiment, some of these points are based upon false preconceived notions. While there are valid concerns on the charging front, especially with non-Tesla EVs, ownership costs, which rank within two of the top five reasons, have little to no merit.
"The myth persists that BEV ownership costs are higher than internal combustion vehicles. Only 35% of buyers agree that BEVs have a lower cost of ownership compared to internal combustion engine vehicles. That figure increases to 55% for BEV considerers. In reality, the average cost of maintaining a BEV is $9,048 per year, compared to the $10,728 industry average, according to AAA's annual cost of ownership report. Without proper dealer education, buyers will falsely believe they must suffer higher up-front and ongoing costs to switch to BEVs," an Ipsos researcher wrote.
The readily-available Tesla Model 3 starts as low as $38,030 for in-inventory examples. Factor in the federal tax credit and the Model 3's effective price could drop to $30,530. Add in any additional state incentives, and the Model 3 will easily be a sub-$30,000 car for some buyers. Consider the little maintenance and gasoline savings, and even a more premium EV will rival the prices of entry-level sedans coming from brands like Toyota, Hyundai, and Kia.
Source: Ipsos