Education is key to shifting the market towards EVs

Are we finally at the tipping point of adoption for battery electric vehicles (BEVs)?

That is both the question and the title of a recent Ipsos study, which looks at the United States market and points to rising gas prices as pushing more consumers to consider alternative powertrains. This is one of the report’s key findings.

The fact that gas prices climbed in 2021 is significant, because it increased by nearly twice the price since mid-2020. In April 2020, the U.S. average cost per gallon of conventional regular grade gasoline was $1.72. It reached $3.38 in November 2021.

“It’s very top of mind for consumers, because it can be quite expensive to operate a vehicle,” said John Kiser, Senior Vice President, U.S., Automotive & Mobility at Ipsos and one of the authors of the study, in an interview with Canadian auto dealer.

John Kiser, Senior Vice President, U.S., Automotive & Mobility at Ipsos

Kiser, who is one of the author’s of the study, said interest in BEVs tripled since 2018, when it was at 13%, with more than a third of U.S. consumers (36% in 2021) now willing to consider this option.

Higher gas prices certainly help push consumers to consider these vehicles, while the Biden administration’s Build Back Better plan around EV incentives serves as a helpful focus, even if the legislation did not pass in the Senate this year. It helps explain the level of consideration among consumers increasing, but Kiser said it is not directly correlated.

Charging infrastructure remains an important factor, and while range and charging speed are hitting a key sweet spot for consumers, lack of familiarity with electric vehicles persist as some of the main barriers to adoption for both consumers, and sales and service providers.

Asked if dealers in the U.S. are providing their customers with enough information, Kiser said the results are varied. In 2021, the company connected with some dealers, independent of the study, to see what was transpiring in their stores and what level of information they were able to provide, since it varies from state to state, along with the level of support from each state.

“Ultimately, the knowledge level of a salesperson at an OEM can vary depending upon the focus of that OEM,” said Kiser. “An OEM whose focus has been on gas (vehicles) for decades—that’s going to be their default. And if they’re growing into electrification, there’s going to be a learning curve for those sales people and those dealerships.”

About one in four EV owners (26%) in 2021 know a fair amount about pure BEV—up only slightly from 2020 (23%).

The study indicates that this rising interest among consumers comes with familiar concerns. Range anxiety persists and is a real concern, for example. Consumers also do not know how well the battery will last over time, and if the miles or kilometres provided on a full charge (total range) is considered enough for their needs.

Charging at home versus at public charging stations that EV owners are less familiar with is also a concern, and not everyone has the access they need to charge their vehicle. Think about garage orphans, who may be limited in their ability to charge an EV in the underground parking lot of their condo unit, which may not offer many plugins—if any.

On the flip side, consumers who are more familiar with these vehicles (45%) are two and a half times more interested than those that are not familiar (18%).

Other points worth noting are the number of new BEVs coming to the market in 2021 and 2022, which will arrive in segments that consumers desire the most—namely, larger vehicles.

As for the Biden administration’s Build Back Better Act, which may leave Canada feeling as if it dodged a bullet around the EV tax credit plan, Kiser said the EV infrastructure build that Biden was pushing for in the legislation is important.

“In addition to providing additional incentives to consumers to buy electric vehicles, I believe the infrastructure portion is actually more important to accelerate the build out of public charging stations,” said Kiser. “And that is fast public charging stations, if you will, because that’s what consumers want the most.”

He said consumers want to have access to public charging to help ease the anxiety they have around long drives or long distances. The good news is that a lot of new EVs coming out appear to offer increased range.

But overall, Kiser’s main message is this: education is key.

“For the general public in particular, dealers can have this connection if they can inform the consumer when they come in (about the vehicle),” said Kiser. “They want to know that the vehicle that they’re going to get is going to work for their needs.”

This in turn can help alleviate some of the barriers for adoption, and therefore increases the level of consideration among consumers.

“One of the biggest drivers for increased consideration is increased familiarity,” said Kiser. “If dealers can help with that, that certainly is going to be an advantage and further accelerate the level of interest of battery electric vehicles.”

The report includes consumer data collected in October, while market data was monitored and collected throughout 2021.

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