In another blow to America’s EV transition, buyers are balking at purchasing a new EV.
In its latest Mobility Consumer Index (MCI), consulting firm EY found that only 34% of US consumers plan to purchase an electrified vehicle (meaning fully electric, plug-in hybrid, or hybrid) as their next car. That’s down from 48% in EY’s 2023 survey.
Looking specifically at fully electric vehicles, the number drops to a paltry 11% from 22% a year ago.
“While we’ve seen substantial increases in interest and purchasing of EVs since 2020, this year’s MCI shows dips in demand for the first time,” said Steve Patton, EY Americas automotive leader.
The reason, per Patton and EY, is a lack of consumer education around the long-term value of an EV with regard to maintenance compared to traditional gas-powered cars.
Another possible reason: While maintenance costs are lower for EVs, those vehicles have a “much higher magnitude” of costs, said a general manager of a Southern California dealership. That’s especially true when it comes to body or structural repairs.
EY’s latest study follows J.D. Power’s EV purchasing survey released in May, which found EV buying sentiment dropped for the first time since the research firm began polling consumers in 2021.
A big reason for the drop in J.D. Power’s survey was charging infrastructure, of lack thereof. Interestingly, EY’s survey actually saw improvement in that area, as well as less range anxiety.
EY’s survey found that only 24% of respondents felt the limited range of EVs was a top concern, down from 30% a year ago. EY found that only 23% of respondents were concerned about a lack of charging stations, down 11 percentage points from the 34% who were concerned last year.
EY noted another concern was battery replacement costs, though those concerns may be unwarranted. That’s because EV batteries have been shown to have a life expectancy of 12-15 years or longer, which generally outlasts the life of the car.
Hybrids’ flexibility may be key
The popularity of hybrids, and the flexibility they offer, may also be putting a dent in pure EV sales in the US EY found that 26% of US buyers prefer the flexibility that comes with a hybrid engine, compared to only 19% of global survey takers.
Said Raman Ram, EY Americas aerospace, defense, and mobility leader: “For those who are looking to transition due to the environment, hybrids allow owners to lessen their reliance on fuel and creates options for batteries and parts. For many, it’s a win-win.”
Automakers like Ford (F) and Toyota (TM) have seen strong sales of hybrids in the US; rival GM (GM) is also promising to release hybrid versions of its popular vehicles.
The report’s overall findings suggest that the transition to EVs will be bumpy. But, according to EY, educating consumers on true EV costs — and creating hybrid alternatives — may be “key to the progression of mass EV adoption.”
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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