The broad economic impact of the ongoing global pandemic notwithstanding, electric vehicles (EV) have captured the spotlight in the global automotive marketplace, with auto manufacturers introducing new models in all EV categories, from pure battery-powered electric vehicles (BEV) to hybrids, at a frenzied pace. Government incentive programs and media hype are also major forces continuing to drive consumer curiosity and awareness in the category.
But just how far does Canadian consumer interest in EVs actually extend to purchase intent and what are the factors ultimately influencing an EV purchase decision?
To shed some light on these questions, we conducted a national online study with AutoTrader.ca and AutoHebdo.net marketplace users this spring to uncover insights on Canadian consumer perceptions of EVs, specifically, what motivates their interest and informs their decision-making in purchasing an EV. More than 700 people across Canada responded to the survey.
Among the key findings of the study, we found that while 92% of respondents do not currently own an EV, nearly two-thirds (64%) of non-owners said they were at least open to the possibility of buying an EV as their next car instead of a traditional gas-powered vehicle. This represents a great opportunity for Canadian car dealers with EVs in their line-up.
With virtually constant presence in the media spotlight, it’s perhaps not all that surprising that Tesla was the brand most often named by potential EV buyers in our survey as coming to mind without any prompting. In fact, Tesla is by far the most popular electric vehicle manufacturer currently in market, with a full two-thirds of car shoppers claiming it to be their most desired EV brand. Lagging far behind in second place is Toyota, with 8% of respondents identifying it as their most desired EV brand. After Tesla’s virtually untouchable 77% rate of unaided brand awareness, Toyota came in at a solid 32%, followed by Chevrolet, Ford and Nissan, at 18%, 17% and 15% respectively.
Of course, despite the generally positive attitude Canadians have towards EVs, there is still plenty of room for sales growth for traditional automotive brands in the segment and opportunities for dealers to encourage and motivate buyers to take the EV plunge.
One of the key areas to consider is just why some consumers are not interested in buying an EV, at all.
According to our survey, the top three objections buyers have about EVs are a higher purchase price and limited travel range, both coming in at 61%, as well as a lack of charging stations or power availability (54%). Other objections include concerns about maintenance cost, lack of suitability for cold weather, and – perhaps counter-intuitively – detrimental environmental impact because of battery manufacturing and disposal requirements.
Among potential EV buyers, fuel cost efficiency is the top reason they would consider such a purchase (83%), followed by perceiving EVs to be environmentally friendly (70%), and requiring less maintenance than pure internal-combustion vehicles (51%).
Interestingly, while 79% of potential buyers say government incentives could motivate them to purchase an EV, a full 30% of survey respondents said the minimum financial incentive that would sway them to sign a purchase agreement is more than $10,000. Another 28% of respondents said it would take at least $6,000 to convince them to buy an EV – still higher than the federal government’s current $5,000 maximum incentive.
So, what does this all mean for dealers eager to take advantage of high consumer interest in EVs and aiming to gain a competitive advantage in the marketplace?
Clearly, dealers need to develop marketing strategies to leverage the perceived positive attributes EVs have among consumers. However, it’s just as important to address barriers and consumer objections in the marketing messaging.
Seeking to identify the key factors that can motivate an EV purchase among prospective consumers, our survey found that potential buyers overwhelmingly want to know ahead of any purchase just how they are going to be able to charge their EV at home and on the road, and exactly how far they can travel in between charges.
Another key factor that may be hindering EV sales across the board is a general level of confusion and lack of awareness among consumers about the differences between battery-powered electric vehicles (BEV), hybrid electric vehicles (HEV), and plug-in hybrid electric vehicles (PHEV), with only 37% of car shoppers indicating they are clear on the distinctions.
Thus, dealers looking to develop promotions and marketing collateral to increase sales of EVs should think about how they can creatively integrate elements that educate consumers about the different types of EVs available in the marketplace and help dispel many of the myths and misconceptions that still surround EVs, particularly with regard to vehicle performance and maintenance costs.
According to our survey, online video, third-party review websites, and manufacturer websites are the top information sources potential buyers use to learn more about EVs, with dealerships down the list and tied with friends and family as the preferred EV information source for 27% of respondents.
Clearly, then, there is plenty of opportunity for dealerships to do more to educate, inform and motivate buyers to put a charge into their EV sales!