Electric vehicles (EVs) have been the talk of the automotive world in recent years, with record consumer interest and sales growth. However, the latest EY Mobility Consumer Index (MCI) reveals that the EV hype train may be slowing down in the United States.
The fifth annual MCI survey, which polled nearly 20,000 consumers across 28 countries, found that only 34% of US consumers planning to purchase a new vehicle in the next two years intend to buy an EV.
This marks a significant 14-point drop from the 48% reported in the 2023 MCI.
Barriers to EV Adoption Persist
Despite efforts to improve EV education and infrastructure, US consumers are still not fully on board with EVs.
The top deterrent?
Expensive battery replacements, with 26% of potential buyers worried about this cost. Maintenance fees are also at the top of the list of reasons buyers are showing apprehension.
There were a few other notable concerns as well.
Twenty five percent of consumers still have concerns about the lack of public charging infrastructure. While range anxiety has decreased slightly, falling from 30% in 2023 to 24% in 2024, it’s clear that more work needs to be done to instill confidence in the EV ownership experience.
Hybrids Emerge as a Transitional Bridge
Interestingly, as EV demand wanes, hybrid vehicles are gaining popularity among US consumers. The share of buyers considering a hybrid for their next car rose by 2 percentage points in 2024, bucking the global trend of a 2-point decrease.
The versatility of hybrids appears to be a major draw, with 21% of US consumers preferring a gradual transition from internal combustion engines to fully electric vehicles.
Additionally, 26% of buyers appreciate the security that comes with a hybrid powertrain. Raman Ram, EY Americas Aerospace, Defense and Mobility Leader, notes that hybrids offer an “easier-to-swallow solution” for those hesitant to fully commit to EVs.
“For those who are looking to transition due to the environment, hybrids allow owners to lessen their reliance on fuel and creates options for batteries and parts. For many, it’s a win-win.”
Car manufacturers are hearing consumers loud and clear too. Volvo is backtracking on their EV only goal for 2030 and instead is focusing on hybrids.
The Future of Connected Cars
Despite the dip in EV demand, automakers continue to use electric vehicles as a platform for advancing connected car technologies.
Navigation features top the list of desired connected services for 57% of US consumers, with 45% willing to pay for these capabilities.
Safety measures are also a priority for 56% of buyers, while 46% would use connected services for maintenance requests and updates. However, nearly half (47%) of EV owners express concerns about high prices for additional services, and 36% feel that most features can be found on their smartphones.
The Road Ahead
The path to widespread EV adoption in the US is proving to be a bumpy one, with consumer demand ebbing and flowing. Education and the availability of hybrid options will be key to maintaining momentum in the electric vehicle market.
Biden’s EV mandates could also play a part in a rocky future for electric vehicles.
Steve Patton, EY Americas Automotive Leader, acknowledges the challenges ahead: “This decrease is due partly to a lack of consumer education around the long-term value of an EV and maintenance requirements vs. traditional ICE (internal combustion engine) vehicles.”
As the automotive industry navigates this transitional period, it’s clear that a multi-faceted approach will be necessary to address consumer concerns and keep the EV revolution moving forward.
From battery technology advancements to expanding charging networks and offering compelling hybrid options, automakers and policymakers have their work cut out for them in the years ahead.
Source: ey.com
