ALEXANDRIA, Va. -- Automaker Tesla's upcoming $35,000 Model 3 car promises a reliable electric vehicle (EV) in a more affordable price range. And given the nearly half a million preorders for the vehicle, it's easy to believe everyone will be driving an EV soon. But a new report by the Fuels Institute finds that consumers may not be ready to embrace alternative-fuel vehicles.
“Consumers and Alternative Fuels 2017,” an analysis based on a February 2017 NACS online survey of 1,100 adult American consumers, demonstrates how much low gasoline prices have shifted consumers’ priorities for their next vehicle purchase. At the same time, it highlights how younger adults may hold the key to the future of EVs, hybrids and other alternative-fuel vehicles.
Here are six insights on consumer vehicle preferences ...
1. New vehicle purchases
After two years of record-breaking vehicle sales, consumers are less likely to be in the market for a new ride. According to the Fuels Institute survey, 61% of consumers said they would potentially buy a new vehicle in the next two years—the lowest percentage since 2013. The percentage of consumers “very likely” to make a purchase was 21%, the lowest point in the past five years.
2. Important attributes
For consumers who said they would be in the market for a vehicle, cost and fuel economy were the biggest considerations in their choice. But when asked to pick the most influential attribute, 43% of consumers chose cost, with fuel economy a distant second. The percentage of consumers picking fuel economy as the most influential attribute has steadily fallen over the years, from 31% in 2014 to 23% in 2017.
3. Fuel prices
Low gasoline prices have dampened consumers’ interest in fuel economy and the vehicles for which it is a main selling point: EVs and hybrids. According to the Fuels Institute study, consumers’ willingness to buy a hybrid has dropped from 84% in 2014, when the national gasoline average was $3.64 per gallon, to 48% in 2017, when surveys showed a $2.28-per-gallon average. Interest in all-electric vehicles has fallen from 55% in 2014 to 22% in 2017.
4. Millennials and EVs
However, there is an interest disparity among age groups when it comes to EVs. The youngest age group—18- to 34-year-olds—was significantly more interested than older consumers in hybrid and all-electric vehicles. Millennials were more likely to be interested in any vehicle propelled by an alternative fuel, including flex fuel, compressed natural gas, propane and hydrogen fuel cell.
Also, the youngest age group was less likely than older consumers to say fuel economy and cost were important attributes in their next vehicle purchase. The only attributes 18- to 34-year-old consumers ranked higher than older drivers did were technology-focused: Bluetooth/USB connectivity, GPS navigation and a high-quality sound system.
5. EV drivers
When asked how likely they would be to consider an EV, 18- to 34-year-olds were more likely than older consumers. Only one-third of the youngest adults described themselves as unlikely to consider an EV, compared to 62% of consumers 50 years and older.
The biggest driver for those who are considering an EV is environmental reasons, followed by fuel economy.
For those consumers who would not consider an EV, cost considerations, plus insufficient charging infrastructure and driving range, were the biggest factors.
6. Interest vs. action
As of 2016, EVs made up only 0.45% of light-duty vehicle sales, according to WardsAuto.
John Eichberger, executive director of the Fuels Institute, cited “a strong disconnect between stated consumer interest and actual consumer purchases across all types of alternative fuel vehicles.”
“Consumers’ theoretical interest in non-gasoline-powered vehicles hasn’t yet been reflected in actual sales at dealer lots,” he said in a statement. “But the sustained interest in alternative fuels could result in increased alternative-vehicle sales in the coming years, depending on many variables, including the decisions of policymakers.”
Click here to download the complete Fuels Institute report, “Consumers and Alternative Fuels 2017.”