February 06, 2024
I recently completed an extensive consumer journey map of electric vehicles (EVs) from awareness through ownership and loyalty (or lack thereof). During this process, some key findings stuck out to me. Here are some of my favorites from the first half of the journey stages from awareness through first EV purchase.
Spoiler alert—the experience for first-time EV shoppers is a bit of a mess right now but will certainly improve over time as the EV market matures.
STAGE 1: Awareness AKA They’re EVerywhere
At the awareness stage people are suddenly seeing more and more EVs out in the world and hearing about them in general news coverage.
The awareness stage and the EV financial implications stage are the most confusing for consumers.
With the constant natural disasters the world is experiencing, many are thinking about ways to limit pollution. In a Morning Consult poll from last year, 73% of Americans said they were at least somewhat concerned about climate change, including 39% who said they were very concerned.
In mainstream media, there is much conflicting information about EVs: Half of the news coverage claims that EVs are the ONLY route to a clean, fossil-free future and say consumers need to switch to EVs now rather than transition to one via a hybrid or plug-in-hybrid.
The other half claims that EVs are not better for the environment when you factor in battery mineral mining and production, tire wear, dirty energy sources, and more. Many also mention the (literally) broken public charging infrastructure and the general inconvenience of charging outside of the home if you don’t have a Tesla and access to the supercharger network (which many more OEMs will soon have access to).
As with most highly controversial topics, the truth lies somewhere in between. It would be difficult for most consumers who don’t research the subject thoroughly, to come to a reasonable conclusion. Ultimately, someone’s early perception of EVs may depend on where they live and/or consume their news, which is why the states with the highest EV penetration are all blue.
Consideration AKA Electrify my Life?
In the consideration stage consumers are taking the info they’ve gathered in the awareness phase, learning more about the choices, and thinking about whether an EV or other electrified vehicle might be right for them.
They are gaining a better understanding of the functionality of EVs and other electrified powertrains like hybrids and plug-in-hybrids. This can be challenging as according to Consumer Reports, 55% of Americans either think a Hybrid needs to be plugged-in (37%), or aren’t sure (18%). Still, once the differences are figured out, consumers start thinking about which (if any) electrified vehicle is right for them and their changing mobility needs.
Return to office, which represents a big change in transportation needs right now, is another factor potential EV buyers are weighing. Many need a new or additional vehicle to start commuting again. Additionally, their office may now have free charging (for instance, during the pandemic my job moved to a new office with free charging).
A recent JD Power study found that: “The more miles that vehicle owners drive, the more likely they are to consider an EV…. Among those who commute more than 45 minutes each way, 35% say they are “very likely” to consider an EV, which is 14 percentage points higher than among those with a commute of 15 minutes or less (21%)”
Another important factor that increases consideration is simply riding in an EV. According to JD Power, EV consideration more than doubles among those who have had some level of exposure, such as simply riding as a passenger.
Wild gas price fluctuations may also push people to think about an EV to save both money and the environment.
Exploration AKA Which EV4ME?
Now that consumers have some grasp of the electrified and gas options, it’s time to start looking for the right vehicle for them. With over 275 models available in the US alone, this is no easy task.
When trawling through posts on Reddit/whatcarshouldIbuy and Twitter, I saw the specific requirements many shoppers have:
“I want an SUV/crossover that comfortably seats 5 adults. Hybrid or EV engine is a must. Leather interior and power front seats are also a must. I don’t like the RAV4, or the CX5”
As part of my research, I also used a tool called OMNI to look at clickstream data of people who went to any of the 30+ EV model landing pages across OEMs. The data showed that all roads led to Tesla.com, with this audience being 260x (26000+ index) as likely to visit Tesla’s site vs the general population. There was nowhere near this over-index with other OEM sites (Kia and Chevy were tied for #2 with a ~4600 index). This means if you are shopping for an EV, a Tesla is probably in your consideration set, though they are certainly no longer the ONLY choice.
Ultimately, when you add in electrified powertrains to the consideration mix, it makes it a very overwhelming decision-making process involving a ton of online research on both OEM and 3rd party sites. And that’s before you’ve even started to investigate the financial implications (dark foreboding).
EV Financial Exploration AKA Electrifi-nance
As I said before, figuring out all the financial benefits and pitfalls of any EV is extremely confusing. This is because almost every financial aspect of owning an EV is different, including the initial tax incentives, maintenance costs, insurance cost, state registration fees, tire costs, repair costs, and more. To make matters worse, many of these additional savings or costs are different per individual, depending on where they live, how much money they make, and even how they drive!
For instance, overall, EVs cost more than their equivalent Internal Combustion Engine (ICE) counterparts when it comes to registration fees, insurance, tire replacement frequency, and the initial cost of the vehicle.
EVs can cost less with Charging (vs gas) and maintenance. EVs can compete on price with their ICE counterparts if the vehicle and the buyer BOTH qualify for Federal and State incentives (this is a big IF).
The 2022 Inflation Reduction Act renewed credits for manufacturers like Tesla and GM (who had run out of them years ago). However, the rules on how a vehicle qualifies for credits have become so complex that many manufacturers don't even know if their vehicles will fully qualify anymore. As of Jan 1, 2024, the Federal credit battery requirements got stricter, resulting in many models losing all or part of their incentives. To make matters worse, a single model can gain and lose qualification from one batch to another depending on the battery mineral sourcing.
How you get the Federal credit also changes in 2024 as you will now be able to apply it at participating dealerships when you buy a qualifying EV, if you don’t want to wait until you file your taxes. However, many dealers likely won’t participate in this instant rebate program, and some may not even know about it.
Income limits still apply in 2024, but if you and/or the EV you want don’t qualify for the tax credit, there is a lease loophole that allows OEMs to skirt most requirements and get $7500 for each EV they lease, which many are now passing on to the buyer via their captive finance companies…
Confused yet? I haven’t even covered EV registration fees per state (see Texas’ new fee), State EV incentives, federal charger installation credits, electricity prices and plans per state (and provider), repair costs, and so much more.
Needless to say, this stuff is hard for anyone to figure out.
Buy (at the dealer) AKA my first EV purchase!
Ok. You’ve waded through hundreds of choices and found your perfect vehicle. You’ve also completed the spreadsheet and confirmed that an EV is a financially viable option that is also good for the environment. Assuming the one you’ve picked is not a Tesla (probably not a good assumption given Tesla’s sales numbers), all that’s left to do is head to a dealer to test drive and buy your perfect EV.
If you live in California like me this is EZPZ as Cali is the land of EVs and dealers usually have them in stock. However, for much of the rest of the country, this is not the case. A recent Sierra Club study found that an astounding 45% of dealers surveyed said they are unwilling to sell EVs and 2/3 said they don’t currently have any to sell. Even though EV supply is overflowing right now, this is still only the case at dealerships that are willing to sell them.
This makes some sense as dealers lose a lot of maintenance income with EVs, as they don’t require annual oil changes. On top of this, many OEMs force dealers to make investments in the hundreds of thousands of dollars for dealership EV equipment (like fast chargers) to be certified to sell EVs. This recently prompted hundreds of Buick and Cadillac dealers to opt-out of EV sales and instead choose to sell their dealerships back to GM. Even if your dealership does sell EVs, the salespeople there might try and talk you out of it or, (even worse?) know nothing about the EVs that customers have spent so much time researching.
I realized after writing this that it sounds pretty negative, but that’s really not the case. Once you’ve made the plunge and bought an EV, ownership is a much happier time. The latest crop of EVs that have come out are amazing and EV buyers are overall very happy with their vehicles.
The latest data I pulled from the IHS loyalty tool (disposal, Q1 2023) also showed more people moving from ICE vehicles to HVs/PHEVs/EVs than the other way around. Existing electrified owners are also largely sticking with them whether they move up the chain to EVs, down it to PHEVs and Hybrids, or stick with the electrification type they already have.
The takeaway here is that OEMs can do a lot more to improve the EV information/shopping/buying customer experience, like providing more education on electrified options, financial implications at the individual level, and a better dealership experience. These steps would no doubt help increase adoption and lead to many more happy EV owners.