The EV Surge is Coming. But When?  

Electric vehicles are becoming more mainstream, but growth is hitting a speedbump.  

It’s been an exciting time in the industry as electric vehicle (EV) sales hit new records. For the first time, in 2023, over a million EVs were sold. Fast forward to January 2024, and now there are more than 3.2 million EVs in the U.S. ¹ More EV models are entering the market from more manufacturers, which means pricing is getting more competitive and more people can afford them.  

Yet the EV growth rate is slowing. An increase in supply and more available models have outpaced consumer demand. With weakening demand, Tesla led the pack in making price cuts and began a domino effect across the industry. EV consideration among car shoppers has begun to wane and inventory is sitting on dealership lots longer. So what’s next for the EV market? 

Many consumers aren’t ready for EVs…yet. 

An EV Skeptic is defined as a car shopper who is only considering vehicles powered by traditional internal combustion engines (ICE). According to the 2024 Path to EV Adoption Study by Cox Automotive, nearly half of vehicle shoppers in the market today are Skeptics. These shoppers are apprehensive about the idea of fully committing to an electric vehicle.  

Why aren’t most car buyers ready to take the leap into the electric vehicle segment? There are multiple barriers to adoption that OEMs and dealers will need to overcome to move Skeptics into a consideration and purchase mindset:  

• Driving Range and Lack of Infrastructure – Consumers are still worried about the range for electric vehicles and that they won’t be able to drive as far. Notably, there is still widespread concern that a lack of charging stations could impact their travel plans.  
• Battery Fears – EV batteries continue to serve as a deterrent to purchase due to concerns about the battery losing charge, the length of time to charge as well as the cost to replace the battery. 
• Affordability – While purchase price is coming down and the addition of more models provides more affordable options, consumers still perceive ownership costs for EVs to be higher than comparable ICEs and hybrids.  

These perceptions continue to make consumers apprehensive about EVs so many are still looking to the familiarity of ICE and hybrids for their next vehicle. 

But there is still hope for an EV future. How can OEMs encourage car shoppers to take the leap? 

While growth has slowed, for many brands, awareness and consideration of EV models is strengthening. This could signal that more consumers will look toward EVs sooner than later. EV consideration will notably increase with 54% of current Skeptics saying that 3-5 years from now will be the right time to purchase an EV. By 2033, 90% of vehicle shoppers will be considering an electric vehicle.² 

This shift will be driven by continued advances in technology, more EV charging infrastructure and consumer education. More models and price reductions will cast a wider net attracting Gen Z, multicultural and less-affluent shoppers.   

Educating consumers on EV ownership will be key in driving this shift. OEMs and advertisers can start now to nudge them into the consideration stage. 

Content helps EV buyers make decisions. 

EV buyers consume more content than ICE buyers. They rely heavily on content, especially videos, when researching online. Expert reviews and ratings, vehicle awards and more help consumers better understand the new world of electric vehicles. New EV buyers also visit more sites than new ICE buyers as they gather information.³ 

Powerful video advertising and content leads EV buyers to take actions like contacting or visiting a dealer, looking up more information on a vehicle, submitting a form and scheduling a test drive. 74% of new EV buyers took action after viewing an online auto video ad compared to 65% of new ICE buyers.⁴  

Your EV content should highlight your brand’s line up. With more models entering the market, consumers need to know what sets yours apart. EV considerers tend to be technology focused. Spotlighting tech enhancements and features in your line up is a critical way to move shoppers closer to purchase.  

Call out the key benefits of electric (EV) versus internal combustion (ICE) vehicles. As EV shopper demographics are skewing younger, lower income and multicultural, helping these audiences understand the benefits of EV will move them closer to their purchase.  

Entice EV shoppers and skeptics with key offers. 

Free charging and maintenance offers could help push both EV Considerers and Skeptics closer to purchase. A free at-home charger, free maintenance or service plan, as well as free charging at charging stations are concepts that would help increase EV sales with consumers. Survey respondents indicated that six months of free maintenance and free charging would be the optimal trial period.²  

Accelerate EV adoption with coordinated efforts across OEM and Dealer levels. 

67% of franchise dealers prefer that OEMs share in the responsibilities for upper funnel activities, while they take charge of the lower funnel steps.² Dealers want OEMs to help educate consumers on their line-up, on the key differences and benefits of EV vs. ICE, as well as provide information on EVs listed for sale.  

Get Ready for the Switch 

While maybe not as quickly as OEMs and dealers would like, the automotive shopper is moving toward the new frontier of electric vehicles. Understanding and addressing why Skeptics and Considerers are delaying an EV purchase can help you entice them to purchase sooner. Brand and model content tools, especially video, will be critical to educate, build awareness and drive higher consideration. Higher incentives and working across tiers will move shoppers closer to an electric future.  

For more insights from the Cox Automotive Path to EV Adoption study, click here. To learn more about how Cox Automotive can help you convert more skeptics into EV shoppers and buyers, contact your Cox Automotive representative today.  

Sources:  

1. S&P, Data through January 2024 

2. Cox Automotive Path to EV Adoption, 2024 

3. 2023 Cox Automotive Car Buyer Journey  

4. Cox Automotive GfK Content Influence Study, 2023