Buyers Are Unwilling To Pony Up More Cash For An EV Than A Normal Car

2024 GMC Hummer EV SUV electric off-road vehicle
Image Via GMC.

Automakers across the board appear to be going all in on the future of the electric vehicle. This decision has come as governments across the globe have started to announce stricter emissions regulations and zero-emissions targets for the near future. And while the EV segment is growing in popularity, it is still just a fraction of the overall market as of right now. Thanks to a new study completed by OC&C Strategy Consultants and shared exclusively with Reuters, we learn that buyers in the U.S. and Europe are coming around on the concept of EVs. That said, there is one key factor that is still making customers wary about ditching their ICE-powered vehicle: EV prices.

The OC&C Strategy Consultants “Battery Late Than Never” study was conducted by surveying 7,500 global consumers between December and January. The study looked at customer’s views on vehicle ownership, driving, electric vehicles, and autonomous technology. While the entire study is quite interesting and highlights our love of cars worldwide, the figures related to electric vehicles are eye-opening. OC&C suggests that enough customers on the market currently are satisfied with the infrastructure in place to adopt an EV, but they are unwilling to pony up the extra cash associated with EV prices. In the U.S. for example, 69 percent of respondents stated they are unwilling to pay more than $500 more for an EV over a standard ICE-powered vehicle.

electric vehicle startup Rivian is slated to open a showroom in NYC as they expand their brand with the automakers new Rivian Guides program.
Image Via Rivian.

While that may not seem like a win for the EV segment, the study had some other findings that do look positive for the electric vehicle automakers. More specifically, 45 percent of U.S. respondents stated that they are considering an electric vehicle as their next car. Only 28 percent of those respondents considered an EV before their last vehicle purchase. The study also found that 16 percent of respondents in the U.S. said they are likely to buy or will definitely buy an EV for their next car. That is up from just 10 percent the year prior. Again though, the vast majority of these folks are unwilling to pay extra for that experience.

The price parity discussion related to electric vehicles has been going on for ages, and it is flawed. There has long been talks about how lithium prices will drop, creating cheaper batteries for the masses. Though if recent price surges in that industry are any suggestion as to what is to come, that doesn’t seem like how things are going to play out. Furthermore, automakers are in the business of making money. The average price of a new car sold in the U.S. came in at above $40,000 last year, which was the highest it has ever been. There is absolutely no reason to expect that to change just because car’s won’t be powered by engines.

2021 Ford Mustang Mach-E Premium EV Electric SUV
Photo credit Manoli Katakis, Muscle Cars & Trucks.

The easiest way around this issue comes by way of government incentive programs. These programs have proved effective in Europe, and are currently part of President Biden’s American Jobs Plan. That said, what’s to stop automakers from just continually cranking the price up? The goodness of their hearts? That isn’t exactly something automakers are known for showing all that often.

The rapid rate at which manufacturers are adopting electric vehicles isn’t surprising. These companies have no choice but to adhere to the ever-changing laws in the respective markets that they do business. It is rather telling however that folks are still hesitant when it comes to EV prices. We would love to see electric vehicles debut with affordable price tags comparable to ICE-powered vehicles. In reality however, this is easier said than done. Once every automaker is competing for the limited supply of lithium we have access to, battery prices aren’t going to drop without more mining operations coming online. Our best bet in that regard is to move away from lithium ion batteries all together, but new battery tech has proved difficult to crack. That leaves us all in a bit of a weird predicament.

Cadillac Lyriq EV SUV electric vehicle american general motors gm
Cadillac Lyriq Concept. Image Via Cadillac

Written by Lucas Bell

Lucas holds a journalism degree from Wayne State University, and is a Automotive Press Association scholarship recipient. While an American muscle fan through and through, he once wrote a fascinating comparison review about eScooters.

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