Given all the apparent excitement surrounding electric vehicles and the billions invested by automakers, financial firms and government incentives, you would assume there was a groundswell of consumer support for hybrid and battery electric cars underlying this momentum.
The firm predicts that in 2020, international sales of hybrid and battery electric cars will total 5.2 million, or 7.3%, of the 70-plus million consumer vehicles expected to be sold. This year, the world is on track to sell 954,500 electric units, 2.2% of all car sales. Thus, in a decade, consumers will only move the needle about 5 percentage points, from 2.2 to 7.3. If the future of the car is electric, it’s not happening in the next decade and— given the sluggish growth curve— not the one after that either.
So why the apprehensiveness among consumers?
According to J.D. Power and Associates, a confluence of factors have discouraged would-be-electric owners. Not surprisingly, the number one reason is money. Although there are government subsidies to encourage green car purchases in the US, it’s still difficult for cash-strapped buyers not to compare the new hybrid models against cheaper, less fuel efficient vehicles (remember, the recession is not over for the 9-plus percent who are still unemployed or the many who are underemployed).
“Many consumers say they are concerned about the environment, but when they find out how much a green vehicle is going to cost, their altruistic inclination declines considerably,” John Humphrey, an SVP at J.D. Power, said in a statement. “For example, among consumers in the U.S. who initially say they are interested in buying a hybrid vehicle, the number declines by some 50 percent when they learn of the extra $5,000, on average, it would cost to acquire the vehicle.”
Beyond sticker shock, the report says other popular reasons included: aesthetics, insecurity in the new technology, unhappiness with how the car performed, and the need to recharge batteries/driving range.
Who is actually buying?
J.D. Power says from their research, a very clear, dominant demographic emerged: “buyers of HEVs and BEVs are generally older, more highly educated (possessing a postgraduate degree), high-income individuals who have a deep interest in technology, or who like to be among the early adopters of any new technology product.”
At least there’s hope for those Tesla dealerships in Silicon Valley.