As dealers seek to sell an ever-increasing inventory of electric vehicles off their lot, one of the key questions is there a market for buyers past the current plateau.
According to the latest findings from the 2024 Path to EV Adoption Study by Cox Automotive, there is. But they are at least three years away from actually making a purchase.
The authors of the report found a second, significant wave of shoppers will be ready to consider buying an EV in the second half of the decade. And, augmenting the opinions from dealers across the U.S., nearly half of all vehicle shoppers in market today are not even considering an EV—a group the study identifies as Skeptics, shoppers who are only considering vehicles powered by traditional internal combustion engines.
Normal Growth Curve
Last year, EV sales in the U.S. market surpassed 1 million units for the first time, according to sales estimates by Kelley Blue Book. Sales growth continues, albeit slowly, and electric vehicle prices continue to decline, thanks mostly to higher incentives and drastic price cuts by market leader Tesla.
With EV consideration waning, Cox Automotive officials suggests the slowing of EV sales growth is likely a shift in market dynamics as EV sales enter a new phase of development.
“While we’ve seen EV sales growth slow and consideration dip, we believe this is part of a normal growth curve and not the end of the story,” said Isabelle Helms, vice president of Research and Market Intelligence at Cox Automotive, with the report’s release.
The new research suggests that the EV market is slowly becoming more mainstream. While current EV ownership is heavily tilted toward luxury and high-earning households, the study shows the EV market is casting a wider net, attracting Gen Z, multicultural and less-affluent shoppers as well as seeing a notable uptick in used EV consideration. Today, 77 percent are considering used electric vehicles up from 62% three years ago.
Tesla Still Top Dog
While Tesla is the EV maker, many mainstream brands—most notably Toyota, Hyundai and Kia—are making inroads. And Ford continues to be the most-considered EV maker not named Tesla.
A major hurdle discovered in the study is a majority of vehicle shoppers are not even aware of EV offerings from other major automakers, outside of Tesla. Only 33 percent of vehicle shoppers have awareness of EV offerings from Nissan, a brand that helped pioneer EV sales in the U.S. market.
The research was conducted in the first quarter of this year and included a nationally representative sample of 2,557 American vehicle shoppers and 526 dealers to understand their perceptions, preferences, and attitudes toward electric vehicles.
Improving Dealer, Automaker Partnership
The report released May 14 indicates an improving relationship between dealers and automakers when it comes to selling and servicing EVs.
Dealerships responded they have enjoyed increased support in marketing, sales and service since 2019 but express a need for additional resources beyond training in selling EVs. More EV incentives are high on their list, as are programs like free maintenance and funds for additional advertising.
Dealers answered they are feeling the urgency to sell as 65% of dealers report feeling pressure from their automakers to hit EV sales targets, up from 39 percent in 2019. Luxury dealers are more likely to feel higher pressure, according to the report.
Among franchised dealers, 86 percent say they are likely or somewhat likely to continue making investments required by the automakers. With this commitment to continue investing in EV infrastructure, the authors summarized dealers are signaling a collaborative effort to accelerate EV adoption.
The Rise of the Skeptics
The adaptation at the dealer level is a key issue for what Cox authors call the EV Skeptics. As technology improves, the U.S. charging network expands and prices moderate further, 54 percent of current Skeptics will become EV Considerers within three to five years. Within the next ten years, 80 percent of today’s Skeptics will be ready to consider an EV as more barriers fall.
As Skeptics slowly become Considerers, overall EV consideration in the U.S. is forecast to increase dramatically. Currently, only 45 percent of consumers in market for a vehicle within the next 12 months say they are considering an EV, dropping six percentage point from a year ago.
In the 2026-to-2028 timeframe, researchers suggests 79 percent of vehicle shoppers (both new and used) will be considering an electric vehicle. By 2033, 90 percent of all vehicle shoppers will have electric vehicles on their lists.
“Bullish” Long Term
“We remain bullish on the long-term future of EV sales in America, as many Skeptics today will be carefully considering an EV by the end of the decade,” said Helms.
The expected shift is being driven largely by expectations for significant technological advancements and a notable improvement in the available EV charging infrastructure. Many current-market Skeptics are waiting for better range, longer battery life, improved reliability and overall technological advancements.
Current-day Considerers often note “price” as the top barrier holding them back from purchase. On the other hand, Skeptics consider the “lack of charging stations” the top barrier.
“With more infrastructure, education, and technological innovation and improvements, we believe electric vehicle sales will continue to grow in the long term,” said Helms.
