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Are EVs Too Expensive For Most Americans?

Stories now spinning off from findings of a just-released Navigant Electric Vehicle Consumer Survey indicate hopefulness for alternative vehicles, but with underlying implications of a less than ideal picture.

Points making top news include that 71 percent of 1,084 respondents represented as being average Americans would spend less than $25,000 on their next vehicle, and 43 percent would spend no more than $20,000.

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Examples of headlines generated in the past 48 hours include:

• $25,000-plus EV sticker turns away many consumers, survey finds
• Survey says $25k barrier is a problem for EVs
• EVs Too Pricey For Most Consumers

Oh well. So much for EVs and PHEVs that cost upwards of $30,000, right? Or maybe after subsidies, some cars on the edge might make the grade assuming budget-conscious shoppers fully qualify?

News Value?

Presently plug-in vehicles comprise less than 1 percent of the U.S. market, so it’s not even news that people are stand-offish for various reasons, but what do we make of headlines shouting they cost too much?

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Of its sources and methodology for its online survey, Navigant says “Respondents were offered a chance to win prizes in exchange for their participation. The margin of error for these survey results is +/- 3% with a 95% confidence interval,” and the survey “was executed in the fall of 2013 using a nationally representative and demographically balanced sample.”

Of respondents, “81% of survey participants reported they either own or lease a vehicle, a number close to what has been reported in previous years,” says the report.

However, unlike other surveys in which respondents were pre-qualified as shoppers actively searching for a car, this was a general survey of Americans in the main.

Respondents thus included 7 percent of “consumers” stating they don’t own a vehicle, but do borrow or rent cars. Another 12% said they do not drive on a regular basis.

chart2.1

Undoubtedly some in-the-market shoppers would agree they want to pay less, but is it safe to say that people who aren’t in the market, or don’t own cars, or don’t regularly drive could affect the results of a car shopping survey?

If they express expectations about price, to what degree would they be unreasonable expectations? If $25,000 is too high to some respondents, might they also say many gas and diesel cars also cost too much, given the average new car price is hovering around $31,000?

Among respondents, nearly one-quarter also said they wanted public charging for free and almost 30 percent wanted public charging for a nominal cost.

“Consumers who expressed a high degree of interest in public charging stations were then asked how much they were willing to pay for a 15-minute charge that would provide a driving range of 6 or 7 miles,” says the report, “As Chart 6.2 shows, 29% said less than $1, while 29% were willing to pay between $1 and $2. Only 16% were willing to pay between $2 and $5, 3% were willing to pay more than $5, and 23% would only use such a service if it were free.”

Chart6.2

Navigant Research is normally a fine resource, and its research and surveys, including this one, do provide value, but like many surveys, it must be understood this is but one snapshot of a random sampling of people.

Of itself, the firm says: “Navigant Research is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.”

Balance

Put in benign terms, human beings are emotionally and intellectually variable. Information perceived by them and what they feel does shift.

The respondents said they were “most familiar with the Chevrolet Volt (44%) and the Nissan LEAF (31%). Familiarity with the Tesla Model S, Ford C-Max Energi, and the BMW i3 is below 25% for each.”

In short, they did not know a whole lot about the subject, but offered their views anyway.

For its part, Navigant came away expressing a relatively positive picture of the U.S. EV market.

“Navigant Research expects shipments of BEVs and PHEVs in the United States to reach 30,195 and 59,106, respectively, by the end of 2013,” it said. “By 2020, shipments are expected to reach 130,641 and 210,772, respectively.”

The survey asked the following question gauging ”interest in electric vehicles:”

“Assuming the other features were right, how interested would you be in purchasing a BEV [battery electric vehicle] with the following characteristics?

• » Electricity cost equivalent of $0.75 per gallon

• » Driving range of 100 miles on a single charge

• » You could plug in the vehicle to charge at your home each night

• » Additional charging stations may be available around town

• » A price of $26,000 after any purchase incentives”

 

The results: “Nearly 40% of respondents said they would be extremely interested or very interested in such a vehicle, while a quarter said they would not be very interested or not at all interested in a BEV as described.”

The above question practically describes a Nissan Leaf but was not featured in the first couple paragraphs of stories about how EVs are too expensive.

The 40-percent answer is however a noteworthy statistic. If even 4 percent of Americans put their money where their cursors clicked, and went beyond “extremely interested or very interested” to actually buy a car so described, it would constitute a paradigm shift in the U.S. market.

Same goes for this question that essentially describes a Chevrolet Volt:

“Assuming the other vehicle features were right, how interested would you be in purchasing a PHEV with the following characteristics?

• » Electricity cost equivalent of $0.75 per gallon

• » Driving range of 25 to 35 miles on a single charge, then the gasoline engine

provides additional 300 miles of range with fuel economy of 35 miles per gallon

• » You could plug in the vehicle to charge at your home each night

• » Additional charging stations may be available around town

• » A price of $28,000 after any purchase incentives”

 

Navigant’s white paper says: “In this scenario, less than one-third of respondents (30%) were extremely interested or very interested in purchasing a PHEV, and 32% were either not very interested or not at all interested.”

Here too, if only 3 percent of Americans went past the stage of being “extremely interested or very interested” and bought, it would mean the Volt was crushing Toyota Prius sales month after month.

One of the survey’s other findings was: “Even under several different scenarios, interest in BEVs and PHEVs remains below 50%, indicating that consumers like the idea of EVs, but may not be won over by their features and price points.”

Again, if half of Americans put words into action, how would things look? Or alternately, if half of Americans are interested in EVs and PHEVs, should automakers call it quits or back severely off?

Tesla Model S in background: And two Americans that don't fit the profile.

Tesla Model S in background: And two Americans that don’t fit the profile.

Is Tesla nuts trying to sell cars for three-times the $25,000 threshold?

Are other automakers much smarter for holding back limited electrified offerings or not even bothering to offer them at all?

Statistics

How one spins the data – and quality of said data – can be as variable as anything else, including the mood of less-than-well-informed anonymous respondents answering a Web survey about advanced-tech cars in exchange for a prize.

Factors affecting American consumers have been known to be like the weather; today it may be stormy, but tomorrow the sun may be shining and the sky blue.

668xNxVolt_by_water

It could also be the survey is presciently accurate. Do you think this is likely? Or, could the picture be even worse than portrayed?

More certain is many variables are in play to determine success or failure for plug-in vehicles, some of which were not accounted for by the snapshot of the respondents’ subjective sensibilities.

How it all plays out is a drama unfolding. It would be premature to say “and they all lived happily ever after,” but it is far too soon to fret overly much about a snapshot in time.

Navigant

Creative Commons (CC) article source: http://www.hybridcars.com/are-evs-too-expensive-for-most-americans/

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