SANTA MONICA, CA — June 20, 2023 — Growing demand for EVs combined with limited options in the EV market are shaking up purchasing decisions. According to a 2023 EV sentiment survey1 conducted by online car shopping resource Edmunds, 85% of EV car shoppers stated they were open to buying an EV from an auto manufacturer they do not or have not owned.
This open-minded perspective is reinforced by EV sales data2 from Edmunds: In Q1 2023, 63% of all EV sales with a trade-in were of a brand different from the brand of the trade-in. Although this data point is shifting lower quarter over quarter as more mainstream automakers enter the EV arena, Edmunds analysts note there is still a significantly higher percentage of consumers willing to shift brands when compared to the industry at large. In Q1 2023, 51% of all vehicle purchases with a trade-in had a trade-in of the same make.
"Traditionally, automakers count on consumer loyalty to carry their sales rates, but consumer interest in EVs combined with the limited number of options in the market is spurring shoppers to consider taking the wheel of brands they've never driven,” said Jessica Caldwell, Edmunds' executive director of insights. "EVs are throwing a monkey wrench into the loyalty patterns that automakers have grown accustomed to, and it will be fascinating to watch if the growing number of EV models from mainstream brands will shift consumers back fully toward their loyalty tendencies or if brand allegiances are a thing of the past.”
Brand consideration is one of the themes that Edmunds' 2023 EV sentiment survey touches on to offer a snapshot of shifting consumer EV preferences and perceptions in the current market. Edmunds' latest EV market share and average transaction price figures are set forth below, together with key findings from the survey.
By the numbers: EV sales continue to grow despite elevated prices. Edmunds' latest transaction data reveals that EV market share stands at 6.7% as of May 2023, up from 5.2% through 2022. The average transaction price of an electric vehicle is $65,381 as of May 2023, compared to the overall industry new vehicle ATP of $47,892.
Missed opportunities: Some automakers aren't taking advantage of elevated consumer trust in their brands to get ahead in the EV race. The top five brands consumers trust to make the best EV are Tesla (18%), BMW (12%), Toyota (8%), Chevrolet (7%) and Audi (7%). Notably, only two of those makes (Tesla and Chevrolet) reside within the top five EV sellers by volume as of Q1 2023.
Skewing luxe: Luxury vehicle owners tend to be bigger fans of EVs. 59% of luxury owners said they like EVs compared to just 27% of non-luxury owners. Luxe owners (79%) also overindex on considering an EV purchase compared to non-luxe (39%). Interestingly, more mainstream vehicle owners (21%) said they weren't interested in an EV purchase but would consider a hybrid or plug-in hybrid compared to luxury owners (9%).
Youth movement: Positive EV sentiment and consideration are also higher among younger consumers. 75% of 25- to 34-year-olds and 88% of 35- to 44-year-olds would consider an EV for their next purchase, compared to 60% of 45- to 54-year-olds and 27% of 55- to 64-year-olds.
Reality check: Consumers may be putting the cart before the battery when it comes to their understanding of EV options available at the price points and range capabilities they seek. 23% of survey respondents desire an EV below $30K before tax credits and incentives, but there are few EVs currently available at that price point. And while 49% of respondents said they're seeking an EV with 300 miles of range or more, the majority of today's EVs achieve less range than that mark, both according to EPA estimates and Edmunds' EV Range & Efficiency Test.
"The fact that younger and more luxury-oriented consumers are considering an EV for their next purchase presents a once-in-a-lifetime opportunity for automakers and dealers to tap into these highly desirable demographics,” said Caldwell. "But there's also a significant educational gap that the industry will need to collectively bridge to better inform consumers of the realities of the current market, particularly around availability, pricing and range. Shoppers considering making an EV purchase in the near future might be a bit blindsided if they don't take the time to do their research.”
Edmunds' comprehensive EV Hub offers consumers an easy place to start. Edmunds experts also offer three major tips to assist consumers considering an EV purchase:
Got range?: Determine how much range you realistically need based on your lifestyle — Edmunds' EV buying guide has a helpful overview of EV range considerations. If you are able to charge an EV at home or work, you may not need as much range as someone without those options. But if you take frequent road trips along routes with less charging availability, you may seek a higher-range model.
Roll the (tax) credits: With the recently updated federal tax credit rules within the Inflation Reduction Act, consumers can take advantage of significant savings toward an EV purchase. Use this tool to find tax credits, incentives and rebates that may apply to your purchase or lease of an electric vehicle at both the federal and state level.
Watts it cost to charge?: If home charging is a possibility, start from the total kilowatt-hours (amount of electricity) it takes to recharge the electric car's battery and multiply that by the price you pay per kWh for electricity. For example, if your EV's battery is rated at 50 kWh, and the price of electricity in your home is $0.23 per kWh, it would cost $11.50 to recharge a fully depleted battery. Check out tips for keeping EV charging costs low here.
"More mainstream electric vehicles hitting the market at more digestible price points in the near future will make the decision to ditch fuel for kilowatt-hours a more palatable one for car shoppers,” said Ivan Drury, Edmunds' director of insights. "If you're ready to dip your toes in the EV market but are hesitant to fully commit to a brand you've never purchased from, consider leasing. Not only is it a shorter-term arrangement, but you may also discover you can sidestep the stringent EV tax credit rules via a loophole in the EV lease rules under the Inflation Reduction Act and have the credit apply to a lease deal.”
About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Fortune, Great Place to Work and Built In, Edmunds is based in Santa Monica, California. Follow us on TikTok, Twitter, Facebook and Instagram.
1The 2023 EV sentiment survey was conducted by Edmunds among U.S. car shoppers April 22-23, 2023.
