Electric vehicle (EV) demand is growing rapidly, registering 55% year-over-year growth, with record sales of 10 million globally in 2022. Forecasts suggest it will race ahead by a further 35% to reach 14 million this year. But for all the hype around the EV revolution, EVs still only represent a modest percentage of the total number of vehicles purchased in many major markets worldwide. After government and OEM efforts to boost the EV market, the industry’s fundamental question is one of consumer behaviour: “If you build more EVs, will consumers buy them?”
If OEMs want to tackle consumer reservations about purchasing an EV, they need to focus on three main areas: combating a lack of awareness of the benefits of EVs, increasing access to EVs and charging infrastructures, and supplying more information about what to expect from life with an EV.
Unpicking the ‘personas’
To better understand how consumers feel and think about EVs, the 2023 edition of EY Mobility Consumer Index (MCI) analysed consumer mindsets around EVs in 2023, allocating respondents an index score from one to 100 for their “EV mindedness.” From this, five distinct consumer segments were identified based on respondents’ attitudes toward EVs and sustainability, cost-consciousness, and mobility preferences. These comprise a spectrum of attitudes and traits ranging from EV Sceptics, EV Reluctants and EV Persuadables to EV Considerers and EV Enthusiasts.
EV Sceptics present ‘eco-doubters’, naturally conservative and risk-averse, seeking affordability. EV Enthusiasts, by contrast, are committed to sustainability and are risk seekers, prioritising performance over cost. The most significant segments—the EV Persuadables and EV Considerers—lie between these extremes and represent approximately 60% of consumers surveyed. Their views are generally more nuanced—they value sustainability but are budget-conscious.
By charting the trends in the evolution of these two consumer segments, OEMs and dealers have cause for both optimism and concern. Optimism, because they suggest a natural tendency for Persuadables and Considerers to become more EV-minded over time, developing into Enthusiasts. If that tendency can be harnessed, more consumers will develop an EV-positive mindset more quickly. The results do, however, also cause for concern, suggesting a core group of conservative and risk-averse consumers—the EV Sceptics and Reluctants—whose attitudes toward EVs remain tied to their more expansive views of society and are thus likely to prove harder to shift.
Convincing consumers
While the middle ground of EV Persuadables and Considerers is likely to be most fertile in the efforts of OEMs to increase EV sales, it is essential not to neglect the more extreme consumer mindsets in these efforts to ‘woo’ potential car buyers towards purchasing an EV. EV Reluctants and Sceptics may have more entrenched views on EVs and climate change, tending to be more cost-focused and more reluctant to pay a premium for an EV. However, they still represent a substantial potential market in the longer term. Likewise, at the other end of the spectrum, many EV Enthusiasts may already have made the jump, but they have a valuable role to play as evangelists and customer advocates.
There are three critical areas where “no regret” moves can be made to encourage consumers to trade up to a more EV-positive mindset.
The first is awareness. Low awareness of the day-to-day practicality of EVs—such as concerns over usability, reliability, and comfort—hold back many consumers, particularly those whose awareness or experience of current vehicle performance and infrastructure improvements is limited or out of date. Worries about inadequate battery performance and range are also vital negative influences for Considerers.
The range of EVs is a significant worry, reflecting an innate preference for what they are used to and a lack of real-world experience of EV use. 44% of Sceptics prefer an extreme 400-mile (640-km) range from an EV, a mark few models reach and one largely incompatible with Sceptics’ cost-driven preference for budget and mid-market models. However, this concern tends to diminish once consumers have owned or used an EV, meaning OEMs must work harder to de-stigmatise EVs regarding their battery performance and range.
Raising awareness by providing clear, accurate and impartial information about life with an EV and how battery performance can be optimised through good driving and charging practices should help these consumers to understand that they would be more satisfied with the performance of the latest EV models than they realise.
Access is another key area. Sceptics, Reluctants and Persuadables, in particular, believe that access to EVs is limited to those happy to shoulder a more significant cost burden. Perceptions of high up-front purchase costs and potentially significant ongoing liabilities such as battery replacement make an EV look like a high-risk choice these budget-conscious consumers can’t afford to make.
37% of Persuadables and 27% of Considerers say they put affordability first. While both segments are attracted by the lower total cost of ownership associated with EVs, they also have concerns over costs. For budget-conscious Persuadables, the primary problem is the high up-front cost. At the same time, for more value-minded Considerers, the risk of expensive battery replacements is a sticking point. OEMs and dealers can help address these concerns by offering alternative ownership models and “smart financing,” such as rental and lease to own, to provide greater certainty over the cost, affordability, and low financial risk of joining the EV club. Many OEMs are also exploring offering subscriptions on EVs and even batteries to encourage the EV-curious to test the ownership experience with minimal financial commitment. OEMs can alleviate cost-of-access concerns by providing a wider choice of mid-market and budget EVs with “good enough” rather than market-leading performance.
The third critical area is around expectations. All five segments of consumers are—to a greater or lesser extent—uncertain as to what to expect from life with an EV. Even consumers already among the more EV-minded have lingering concerns over charging performance, range, and cost. OEMs and dealers can help manage these expectations by providing transparent, realistic, and granular information on the performance of all their models. What ranges and charging times can owners expect to achieve, and under what conditions?
The use of digital tools to help estimate range and plan longer trips can also help establish more explicit expectations and manage range anxiety. In contrast, consistent communications around the lower total cost of ownership of EVs in the long term can help alleviate cost worries among Persuadables and Reluctants.
The EV sales victory will go to those who can stimulate demand across all segments by providing the appropriate nudges at each stage of the customer journey and encouraging consumers to trade up a segment—so that an EV Reluctant becomes an EV Persuadable, an EV Persuadable becomes an EV Considerer, and an EV Considerer becomes an EV Enthusiast.
About the author: Randy Miller is Global Advanced Manufacturing & Mobility Leader at EY
