As the saying goes, timing is everything. Those expecting U.S. electric vehicle adoption rates to accelerate as quickly as Europe’s underestimated this universal truth.
To be fair, the 8.9 percent EV share of overall auto industry sales during Q3 2024 was the highest level ever recorded, and a solid increase from 7.8 percent during the same timeframe back in 2023. Combined with sales of hybrid vehicles, the larger alternative fuel vehicle market finished Q3 at 19.6 percent, indicating a growing consumer willingness to transition from traditional internal combustion engine vehicles (ICE) so long as these vehicles fit their needs.
And therein lies the rub.
EV Perception Challenges
Today, as always, the primary need for vehicle ownership is to provide a convenient and reliable source of transportation. To many, the perception of EV ownership is that it is neither convenient nor reliable, given the media-driven narratives around a lack of public charging infrastructure, the poor performance of EVs in cold weather, and the ever-present range anxiety with drivers’ visions of being stranded in a desert with no battery life.
While this perception is not quite reality, what drives the overarching sentiment that electric vehicle sales have disappointed despite steady growth?
The Hype Cycle: Lessons from Early Marketing Strategies
The first culprit was the incredible rush of marketing hype that peaked between 2021 and 2023 as EV reveals took center stage during Super Bowl commercials and auto shows. Auto marketers borrowed a page from the high technology marketing playbook, ginning up demand from Early Adopters to generate excitement that would transfer to the mass market.
Like many high-tech products before it, that early hype lost momentum as the shift from Early Adopters to Early Majority began and more conservative consumers weren’t as willing to accept such a major shift in their driving habits, particularly as charging infrastructure and price parity didn’t square up with alternatives like ICE or hybrid vehicles.
Timing is everything, indeed, and the automakers that took a more conservative EV rollout approach have been rewarded with surging hybrid sales, often seen as a bridge to full BEV adoption.
Psychological Barriers to EV Adoption
Consumer psychology also offers some clues. Loss aversion, or the human bias that describes the tendency to avoid losses over acquiring gains, drives many financial decisions.
Considering that a new vehicle is generally the second largest purchase a person will ever make only to a house, the stakes begin high and increase significantly once shoppers factor in the shift from fueling up to charging. Sprinkle in political and social biases, horror stories about chargers out of order, and the perception that the technology is failing and you have some significant psychological barriers to overcome.
Technological Advancements That Will Bridge the Gap
As with the adoption of any new technology, recent advances and improvements offer hope. Extended Range Electric Vehicles (EREVs) have seen success in China for several years, and are now being added to production plans for US-bound vehicles in the coming years.
More than just another automotive acronym to add to consumer confusion, EREVs function similarly to plug-in hybrids, only with a larger battery and a small internal combustion engine whose sole purpose is to generate electricity to recharge the battery when its charge is low. If you haven’t heard of this type of vehicle, you will very soon be at an auto show or marketing campaign near you.
For the here and now, the decline of marketing spending on battery electric vehicles is likely to continue, but only as auto marketers shift their focus on the ever-expanding lineups of hybrid, plug-in hybrid, and the incoming EREV models that will continue building bridges toward full-scale EV adoption.
The real hope for many auto marketers is that sometime during the next decade we can return to talking about cars as not only a convenient and reliable mode of transportation but as vehicles of self-expression and freedom that have inspired generations of drivers the world over. When the time is right, of course!