Electrifying the car market may be getting more difficult, with the share of Americans who say they’re “very unlikely” to consider an EV for their next vehicle purchase growing in each of the first three months of the year, according to a new report.
In March, 21% of new-vehicle shoppers said they were “very unlikely” to consider an EV, up from 18.9% in February and 17.8% in January, consumer analytics firm JD Power said in a monthly EV report. In contrast, the percentage of car shoppers who say they are “very likely” to consider an EV was 26.9% in March, largely flat this year.
Persistent worries about charging infrastructure and vehicle pricing’s dampening enthusiasm, the report said. EV’s market share of all new-vehicle sales dropped to 7.3% in March, down from a record high of 8.5% in February but up from 2.6% in February 2020.
“Many new vehicle shoppers are becoming more adamant about their decision to not consider an EV for their next purchase,” JD Power said.
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Why aren’t people more interested in EVs?
The lack of public charging infrastructure and price have consistently topped the reasons for the past 10 months, JD Power said.
Other reasons people cited for not wanting to buy an EV: range anxiety; time required to charge; power outage and grid concerns; lack of servicers for repairs and maintenance; and inadequate performance in extreme temperatures.
Even high-profile initiatives like “Walmart’s plan to dramatically expand its charging network and Tesla’s announcement it would open some of its supercharger network to non-Tesla vehicles have apparently had little effect on these consumer concerns, at least so far,” JD Power said.
Are EV prices dropping, though?
The high price tag for an EV compared with its fuel-powered counterpart remains a deterrent.
Government subsidies for EVs initially boosted demand, but the IRS and the U.S. Treasury Department’s new guidance in mid-April on specific vehicle requirements that need to be met before EVs can be eligible for these tax credits sowed confusion and will likely raise the price again for EVs, generally.
New guidance included the location where the vehicle was assembled and details on the sourcing of critical minerals in the vehicle batteries. Batteries and components must originate in the U.S. or come from countries with which there is a free trade agreement for the vehicle to qualify.
“This new hurdle will affect the affordability of several EV models, while also likely introducing more confusion among buyers,” JD Power said. “Our data suggest that higher prices will negatively affect EV sales “
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Shouldn’t people want to buy an EV to help the environment?
While about 4 in 10 U.S. adults think using EVs helps address climate change “a great deal” (12%) or “a fair amount” (27%), roughly 6 in 10 believe it helps “only a little” (35%) or “not at all” (26%), according to a Gallup poll fielded March 1-23.
Although 43% of U.S. adults said they might consider buying an EV in the future, 41% unequivocally say they would not, Gallup said.
Only about 4% of Americans currently own an EV, Gallup said, and 12% are seriously considering purchasing one.
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Who’s least likely to want an EV?
Most people born before 1965, whom JD Power describes as Boomers and pre-Boomers, are least likely to consider an EV, but one-third of Gen Zers (born between 1995 and 2004) aren’t either. Gen Z is seen as “the future of the marketplace,” the analytics firm said.
“It is clear in the data that price and charging infrastructure are significant obstacles for a wide spectrum of potential customers,” it said.
Geography and education also may influence your decision. Americans living in the Western U.S. and college graduates are more likely than their counterparts to report that they currently own an electric vehicle, are seriously considering the purchase, or might in the future, Gallup said.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
