Electric Vehicles: Interest Grows, but Consumer Understanding Doesn’t
June 14, 2017
By Chris Malott
The Millennial generation has sometimes gotten a bad rap in recent years. Seriously, type in “millennials are killing” in the search bar of your browser. The clickbait centered on this generation has reached ludicrous levels. But let’s stay composed and think about the unique attributes of this demographic, especially in terms of moving toward an electrified automotive future.
One of the defining features of this meme-driven group is their increased usage of and familiarity with communication, media (especially of the social nature) and digital technologies. These youngsters take full advantage (perhaps to a fault, at times) of all of the advancements we have made technologically. Most don’t know a non-digital world, so who can blame them?
Given the inherent tendency of Millennials to adopt the latest technology, what are the implications of this behavior regarding the ever-evolving vehicle powertrain landscape? Well, one answer to this, even as recently as a year back, might have been “Millennials will kill the auto industry.” Not so much, anymore. Remember that generation that we kept saying does not even care about owning a vehicle? Well they do, with a far higher proportion indicating they might make the electric plunge. Kind of an important group to get on board and keep happy, too, considering the whole “get ‘em while they’re young” brand loyalty mentality.
J.D. Power research clearly indicates a higher interest in electric vehicles among younger consumers. This is an integral component for moving into the inevitable autonomous age, as this group ultimately gains more buying power and share of voice. Seems like a move in the right direction. End of story, right?
Actually, no. Many of these potential buyers are motivated to adopt the latest technologies (such as full electric vehicles), but most seem to be woefully unaware of the current state of the technology. In fact, 66% of consumers would only feel comfortable purchasing an electric vehicle if it had a range of at least 300 miles, with 1 out of 5 respondents indicating that they would require more than 700 miles of range. Yikes. For reference, only one electric vehicle on the market today boasts a range of more than 300 miles. The disconnect of hope vs. reality has emerged, and it is vast.
And this optimism (or false hope) does not stop there. When asked how long it would be before there are as many full electric vehicles on the road as there are traditional, gas-engine vehicles, nearly 50% believe this parity will come within 15 years, and 10% think it will be within the next five years. In another tough reality check, our colleagues at LMC Automotive forecast that just 2% of the nearly 18 million unit U.S. light-vehicle market will be comprised of full electric vehicles—in 2024! This is not a simple rounding error; even the early-adopter crowd is way off in their estimation of an electrified future.
What we have here is an enthusiastic, younger buyer base (which is always a good sign) that has a fundamental lack of knowledge regarding the product in question. Where is the education? Car advertisements espousing either the economic or environmental benefits of electric vehicles seem to be nonexistent. Only the very dedicated automotive blog visitors seem to have any chance of learning about electric vehicle developments, and the lack of exposure is perpetuating a skewed vision of what these vehicles can do. This inevitably leads to consumer disappointment, which is not the best way to promote what may be the future of automobiles.
Through all of this, intentions still seem to be good, as more than 40% of respondents feel that the biggest benefit of electric vehicle ownership is that they are better for the environment (zero emissions). This is an altruistic viewpoint which should be applauded. Unfortunately, the United States withdrawal from the Paris Climate Accord is not in keeping with these beliefs. So, once again, the viability of electric vehicles from an economical perspective may be called into question.
But at the least, I can say that I misjudged you, my Millennial friends. We need your open minds.
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Chris Malott is manager of global automotive consulting at J.D. Power. He does care about the environment, but will sometimes put his Gatorade bottles in a trash can if the recycling bin is too far away.
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