Price or the environment? That’s the main thrust behind a rather comprehensive study recently by J.D. Powers and Associates around electric vehicle ownership. The major takeaway? Those involved in the marketing and pushing of green automotive technology to end consumers need to focus more on lowering prices and offering special incentives if they expect to see quicker adoption in the short term by a more mainstream audience.
In its study, the automotive market research firm found that whereas current electric vehicle owners most often “cite environmental friendliness as the most important benefit” of having one, those considering “an EV for their next vehicle primarily want to lower their fuel costs” and reap more economic benefits. To be more specific, it was found that while 11 percent of those asked were thinking green in terms of the planet, more like 45 percent were thinking green in terms of their wallets.
As we’ve mentioned before, one of the primary hurdles facing more mainstream adoption of electric cars has been upfront purchase cost of a green tech car versus its more regular sibling. The research around J.D. Powers and Associates reinforces this issue, noting that “owners of all-electric vehicles (AEV) pay a premium of $10,000, on average, for their vehicle, while plug-in hybrid electric vehicle (PHEV) owners pay a $16,000 premium, on average. Based on annual fuel savings, it would take an average of 6.5 years for AEV owners to recoup the $10,000 premium they paid at the point of purchase, while the payoff point for PHEV ownership is 11 years. ”
There are other issues as well facing more mainstream adoption of these vehicles, namely driving range (i.e. range anxiety) and the availability of charging stations. Also of concern to would be EV buyers are factors like the size of the car and overall reliability.
So does all of this negative thinking among those not yet owning EV folk mean doom for this developing automotive segment? Not necessarily. For one thing, it was found in a large majority of those which already own one (82.5 percent) that once they went in on the actual purchase, they would most likely buy another EV once it was time to get a new car.
In aiming towards bringing this technology to more mainstream acceptance, a number of things will need to happen. These include some of the obvious, such as addressing range anxiety and putting in more charging stations, but other things will need to happen such as improvements in battery technology. As this happens, it is noted, manufacturers should be able to produce more affordable electric cars, which should in turn help increase market share in a space that currently accounts for less than 1 percent of new vehicle sales in the United States.