Several years ago, Bradley W. Lane, Associate Professor in the Urban Planning Program of Public Affairs & Administration at The University of Kansas, wrote an article reviewing a piece of research around what makes vehicle owners ditch the EVs they adopted.
These consumers, dubbed the “early quitters,” were the early adopters in a research study conducted from 2015 to 2019 that surveyed households in Southern California that bought a PEV between 2012 and 2018. The more recent study that was published looks at the 2019 results, which sampled the previous survey respondents who decided to either keep their PEV, or let it go.
“In the research, we’ve historically in the last 15 years or so asked, what would it take for people to adopt these?” said Lane. “Well, once they’re adopted that’s the end of the discussion, and what this research has done is say, okay well, people turn over cars (at least in North America) relatively quickly, right? Why?”
Lane said the research took place in an area that is arguably in the top tier category of places that have the most incentives and reasons to adopt an EV. It has the largest purchase subsidies when combined with federal subsidies in the United States, along with some of the worst air pollution and congestion in the country—all of which makes owning an EV more favourable—especially based on a per mile basis, as consumers would pay less.
“Even in this environment, when one is in the most positive environment for adopting these things, a fifth of people were still not satisfied with (their EVs) to the point that, when time came to consider another vehicle purchase, they replaced them with a more traditional gasoline vehicle,” said Lane, later adding that, in this environment, there is a near 20 per cent rate of “ditching” these vehicles.
Some consumers bought their EV due to the savings it provided around the overall cost (higher purchase price, lower operating costs). They then “ditched” their vehicle because the factors behind their purchase were not as satisfying as they thought they would be. “They didn’t save as much money or were not (aware) of it, or the thing wasn’t as useful as they thought it would be,” said Lane.
So what does that say for consumers who buy EVs elsewhere in the country, in Canada, or even abroad? And what does it say about how quickly dealers should invest in this change?
While Lane said he is increasingly moving toward a position that these vehicles will not progress and diffuse as quickly as people think, he also notes the timing of the study and that there is an important caveat in that OEMs are preparing to roll out a number of new models. There will be a tremendous increase in the variety of EV offerings coming to market over the next several years.
“We’ve had more advancements in battery technology in the last 15 years than we had in the previous 150 since they were invented,” said Lane. “There’s a whole uncredited role of the expansion of the power of basic household, consumer electronics, and battery technology that also explains why EVs are even possible.”
As for where dealers fit in, Lane said there is a “whole real relationship” between the dealer and their manufacturer that is not overly explored or focused on in how much of the incentives and policies are made.
“So what that means for dealers is that, in some ways, they have to decide what they want to sell and what their demands are, (and then) reckon with what their demands are from the automakers providing their vehicles,” said Lane.
For dealers trying to sell EVs or trying to move them off the lot, Lane suggests emphasizing the following: that the EV being considered by the consumer is most likely not the only vehicle in that household. Therefore, many of the concerns around range anxiety are not necessarily found at the household level.
More importantly, Lane said consumers need to recognize that and dealers need to educate them on this aspect—that even with the most expensive EV price tag, it still represents only 30 per cent to 40 per cent of the costs associated with running a vehicle on electricity versus gasoline. Lane said most households do not fully realize how much they are spending on gas and what the true cost of powering a vehicle is.
“I would also emphasize that there are probably more public charging places than many people think, and most people really don’t use them that much,” said Lane. “Most people charge them at home at night, and there are all sorts of benefits to that.”
Dealers have their work cut out for them in preparing for this shift, but as to how quickly they will need to adapt…Lane sees the change moving a little more slowly than initially imagined.
“It isn’t that these things won’t happen, it’s that it might look a little bit or a lot differently than what we think it will look like now,” said Lane.