Price is top barrier to global EV adoption, S&P Global Mobility says

Global electric vehicle consideration is cooling largely because of high vehicle prices and charging concerns, according to S&P Global Mobility.

Price is the leading barrier to adoption globally, according to the firm's survey, fielded in May.

Nearly half of the 7,500 respondents said they consider EV prices to be too high. The average transaction price for an EV in the U.S. was $55,488 when the survey was fielded, compared with the industry average of $48,528, according to Kelley Blue Book.

The respondents thought EVs were too expensive even though prices had plunged. From June 2022 through May 2023, average EV prices fell more than $11,000. As of October, the average transaction price stands at $51,762 compared with $47,936 for a gasoline vehicle.

Still, the percentage of consumers considering an EV declined. About two-thirds of S&P's respondents said they were open to purchasing an EV. That is a 19-percentage point drop from 2021, when 86 percent said they would consider an EV, the research firm said.

After years of allure around the new technology, reality is setting in during the buying process and making consumers reconsider EV purchases, Brian Rhodes, director of connected car and vehicle experience for S&P Global Mobility, told Automotive News.

Following a period of limited selection and tight inventory, a wide array of EVs are available at dealerships without preordering or joining a waitlist, but many available models are in the premium or top-trim price range, he said.

Still many of the models make economic sense compared with a gasoline vehicle, Rhodes said. But consumers have trouble determining total cost of ownership. It is a complicated calculation that must account for federal tax credits, state and local purchase incentives, home charger installation expenses, energy cost comparisons, service and maintenance schedules, parts costs and more. And it requires the customer to collate and trust multiple sources for the information, he said.

"For the average person buying a new vehicle, this is quite a bit of research," Rhodes said. "Some of the realities of total cost of ownership don't necessarily flow through your average consumer's mindset."

That makes price a consistent barrier, even if total cost of ownership for an EV is less than a comparable gasoline vehicle.

After years of selection limited to Tesla models, the Nissan Leaf and the Chevrolet Bolt, the number of EV models started soaring two years ago. Now there are SUVs, crossovers, pickups and luxury sedans. But automakers have delayed many lower-priced models, citing production and profit issues. The lack of less expensive models has contributed to a slowing in the formerly torrid EV sales growth.

EVs made up 7.4 percent of the U.S. market through the third quarter, according to Experian, up more than two percentage points from a year earlier but less one percentage point from January.

Charging followed price as consumers' most important concern, the S&P survey found. Nearly half said they were worried about the time it takes to charge. Most said they were willing to spend 30 to 60 minutes powering up at a public charger. More than 40 percent said they were concerned about the availability of charging stations.

Range was a less prominent concern for respondents. Most said they would accept a range below 300 miles. Only 29 percent of respondents wanted a range above 300 miles.

Consumer preference mirrors the range options on EVs. Almost every available EV has an EPA-estimated range of more than 200 miles, S&P Global Mobility said.

Still, many consumers are waiting for the next advancement before they buy an EV. Nearly two-thirds said they would wait until vehicle technology improves before buying a new car.

"There's always that little bit of 'What if …' that continues to hold consumers back, even if for the most part they know they're probably going to be OK with the capability of their new EV," Yanina Mills, senior technical research analyst at S&P Global Mobility, said in the statement.