DETROIT -- Electrified vehicle sales have increased in recent years but the market still faces challenges such as steep pricing and lack of consumer familiarity with products, a new survey says.
Boulder, Colo., consulting firm Navigant Research's Electric Vehicle Consumer Survey found that prices higher than $25,000 are turnoffs for many consumers.
Of the 1,084 consumers responding to the survey, 71 percent plan to spend less than $25,000 on their next vehicle purchase, while 43 percent won't cross the $20,000 threshold -- taking them out of the market for most of the latest EVs and plug-in hybrids.
The 2013 Nissan Leaf, after a $6,400 U.S. price cut this year to $29,650, including shipping, now hits a sweet spot at $22,150 after a $7,500 federal tax credit.
The Japanese automaker, responding to an uptick in sales, is increasing Leaf output to meet demand -- signaling that consumers will respond if the price is right.
This year through October, U.S. sales of the Leaf are more than two-and-a-half times their total from the same period a year ago, at 18,078 units, according to the Automotive News Data Center.
"Batteries make up half the cost of vehicles. We're anticipating that battery prices will come down by about a third by 2020," said Dave Hurst, principal research analyst with Navigant Research.
"There could be some things to change that time frame. Obviously, automakers are doing some aggressive pricing at this point. Prices may come down a little bit faster [with] automakers eating some of that to get the volume up."
Navigant Research this year expects shipments of 30,195 EVs and 59,106 plug-in hybrids. By the end of the decade, Navigant forecasts shipments of 130,641 EVs and 210,772 plug-in hybrids.
Familiarity
People like the idea of electrified powertrains, the survey showed: Sixty-seven percent of consumers have a favorable opinion about hybrids and 61 percent feel the same for EVs. But familiarity with EV and hybrid nameplates is lower.
Hurst says automakers face marketing challenges.
The Chevrolet Volt plug-in hybrid had the highest familiarity with 44 percent of respondents indicating they're "somewhat familiar" with it, while just 6 percent said they're "extremely familiar." Meanwhile, 31 percent of respondents were "somewhat familiar" with the Leaf, but less than 5 percent were "extremely familiar."
Public charging stations
About 40 percent of those surveyed showed interest in public charging stations, but most want to pay very little or nothing.
More than half said they would use a public quick charge unit only if it was free or less than $1, while just 16 percent would be willing to spend more than $2 for a 15-minute charge, according to the survey.
Navigant suggests that automakers may have to "consider the cost of building these [public quick charge] stations as part of the cost of doing business."
Brendan Jones, Nissan's director of EV infrastructure, said this summer that he expects private investment to take over the majority of public charging projects, which consumers will have to pay to use.
While Jones expects some free charging to continue, he said it won't be the dominant business model.
GM spokeswoman Michelle Malcho said that free charging is a nice perk, but it isn't required to expand the market.
GM has installed more than 400 workplace chargers to promote electrified vehicle adoption by GM employees and visitors, Malcho wrote in an e-mail.
"It is a positive message for the host of the site [e.g. the city, or the retail store] and it creates a very positive buzz about this market. But according to [U.S. Department of Energy] data from the EV Project, over 90 percent of all charging is done at the home," Malcho wrote.
"So the key to this growing market is to communicate the ease in charging vehicles at home [just a simple dedicated 120-volt outlet will do], followed by workplace charging to create buzz around a virtual showroom of [plug-in electric vehicles] in employee parking lots and to provide convenient daily charging to those consumers who don't have access to charging at home."
Karen Glitman, director of transportation efficiency for the Vermont Energy Investment Corp., said there is an ongoing discussion in the state about when it would make sense to start assessing fees at public charging sites.
Glitman said only one of the state's nearly 20 charging stations requires a fee, which is $2 per hour.
"Some businesses will never assess a fee because of the benefit of having a charging station, knowing that EV owners are twice as likely to go to a facility that has EV charging and will stay three times as long," she said in interview. "For some businesses, it's going to be an amenity, just like offering free parking."
