US Consumers Favor Hybrids Because Establishment Brands Aren't Fully Committed to Electric Vehicles, Yet

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Submitted by Justin Hart on October 21, 2023 - 5:52PM

US consumers are showing signs of losing interest in fully electric vehicles, or at least those built by established automotive brands. The numbers speak for themselves, but the conclusions we should draw from them are up for debate.

Media sources like The Wall Street Journal suggest that this evolving scenario is due to the phase of sales electric vehicles are in. In other words, dealers and executives at manufacturers are suggesting that the early adopters or “first wave” of buyers all have EVs by now and manufacturers are finding it difficult to sell EVs to the more hesitant consumers that are slower to adopt new technology, and less willing to pay a premium to do so. I suggest that this is only true to a certain extent and not the primary reason that EV sales are slowing in the US recently. I say this, because if it were the primary reason for EV sales to have slowed in the US, we would see similar patterns in other markets (in western Europe for example) and because I suspect that dealers and executives at establishment manufacturers may have ulterior motives for saying this (i.e. their traditional profit centers in internal combustion vehicles is being eroded and gradually taken from them and they want to protect that for as long as they are able). 

Let’s look at EV sales trends in certain key markets in western Europe for comparison. Germany saw its electric vehicle registrations up 42%, year to date through September, according to InsideEVs. This figure is fairly close to US EV sales increases for year to date through September at 51%, again according to The Wall Street Journal. In both the US and Germany though, sales growth is slowing, and in Germany’s case it seems fairly clear this is due to decreasing government incentives for electric vehicles. This gives credence to the notion that at the end of the day, price is the driving factor (not a reluctance to adopt new technology) and I suggest that this is just as true in the US as it is in Germany. 

Let’s look at Norway (which is leading the entire world in EV adoption): through June of 2023, Norway’s EV sales were up 9% according to InsideEVs and through August continued to outperform all other powertrains in the Norwegian market according to CleanTechnica (though auto sales as a whole are down in Norway like they are in many markets, which means EVs sales are holding steady/increasing modestly as the year goes on). In Norway, currently, EVs represent almost 84% of all new vehicle sales. But as CleanTechnica points out, the slowing growth in plug-in vehicle sales there too is most likely driven by pricing concerns among consumers as incentives change or recede. Because EVs cost less to fuel than other powertrains (as long as the price of electricity isn’t too high/the price of fossil fuels isn’t too low), this also suggest that the second wave of consumers may need some assistance in running their numbers, if they are to adopt EVs in greater numbers (running the numbers is something many consumers may not be inclined to do as focus tends to be on the sticker or up front price). Even if consumers get number crunching help via marketing and press materials that explain the longer term costs and benefits of EV ownership, as long as dealerships are marking up their vehicles and manufacturers are expecting in excess of $60,000 for their new EV’s, they will face hard sales realities with more reluctant buyers and of course with buyers who simply cannot afford the price of entry being charged. Higher interest rates are another obvious factor in the slowing sales of all vehicles, EVs included, since they ultimately increase the cost of any financed or leased vehicles and that is the “double whammy” hitting consumers now. 

But it is also more than just pricing that is curtailing EV sales in the US. I propose that the other primary reasons for slowing EV demand in the US are due to negative buying experiences for establishment brands (due to price gouging dealers, recalls like Toyota’s for the BZ4x, and lack of model choice), as well as less than optimal public charging experiences. That final point is due both to inadequate investment in public charging infrastructure by manufacturers and government (i.e. making reliable, convenient to use charging broadley available at a reasonable price) and to charging speeds that are too slow for many brands. Many brands are simply failing to design compelling products that make it easier and more attractive to drive an EV, by making it easy to change behaviors with fast charging that requires less, or no more effort (at least), than putting gas in their cars and can be completed in the time it takes to grab a coffee or use the facilities and stretch. This, and the upfront costs, are effectively why many consumers are favoring hybrids over EVs, as Jolpnik points out. Other than Tesla and a few other brands, most EVs take more than 20 minutes to recharge from 20-80%, specifically. Add to this the fact that only Tesla’s charging network has given consumers the kind of convenience, reliability, and availability that is needed for mass EV adoption and you can see why EV sales growth is slowing. The recent adoption of Tesla’s NACS charging standard by most automakers suggests that the manufacturers are starting to understand how they have come up short and finally are doing something about it. 

What do you think? Have you been disappointed with an EV purchase or charging experience? Have you decided to go with a non-plug-in vehicle as a result? Please leave your feedback below.

 

Images courtesy of Tesla, Chevrolet, and Kia.

Justin Hart has owned and driven electric vehicles for over 15 years, including a first generation Nissan LEAF, second generation Chevy Volt, Tesla Model 3, an electric bicycle and most recently a Kia Sorento PHEV. He is also an avid SUP rider, poet, photographer and wine lover. He enjoys taking long EV and PHEV road trips to beautiful and serene places with the people he loves. Follow Justin on Torque News Kia or X for regular electric and hybrid news coverage.