Significant Disconnect Between Desire and Purchase of Green Vehicles (DMV.com Study)

Tue, 9/19/2017 - 7:17 pm by Kirsten Rincon

Despite a growing demand for green vehicle technologies and increased interest in purchasing hybrid or electric cars, there is still a significant gap between the desire to own a green vehicle and the number of people actually buying hybrid and electric vehicles. According to our recent survey, 38% of respondents are planning to purchase a green vehicle in the next 5 years (either hybrid or electric). Given the clear interest in hybrid and electric vehicles, it would appear that automakers should be making plans to aggressively pursue the expanding market for green vehicles.

However, the perceived interest among consumers in purchasing green technology vehicles is has not translated into actual sales. Despite an interest in hybrid and electric cars, these vehicles still only represented3.8% of all vehicle sales in the United States in 2013 (EVObsession). So the real question is – if over one third of all survey participants stated that they would consider buying a hybrid or electric car over the next five years, why did electric vehicle sales still make up less than 4% of total sales in the United States in 2013?

First, let’s consider the overall perception of green vehicle technology among US drivers. A recent study conducted by the Union of Concerned Scientists and Consumers Union found that 65% of Americans believe electric vehicles will be an integral part of the future of transportation in the US to address oil consumption and pollution. 60% of participants in the survey also said they would consider purchasing an electric vehicle. However, environmental considerations are not the only factors driving interest in green technology vehicles. When surveyed, US consumers also see the economic value in owning a hybrid or electric car, with 72% of respondents in the DMV.com survey stating that they believe these vehicles would save them money over time compared to standard fuel vehicles.

If we can establish that there is a growing interest and perceived need for green technology vehicles, why do they still only represent less than 4% of vehicle sales in the United States in 2013?

One issue that seems persistent is the upfront cost of green technology vehicles. When asked what concerns they had in purchasing a hybrid or electric vehicle, 52% of respondents to the DMV.com survey indicated price was a major concern, with one in four listing it as their number one concern in owning a green technology vehicle.

Concerns other than price are also significant for consumers considering the purchase of a hybrid or electric vehicle. Despite statistics showing that 69% of U.S. motorists travel less than 60 miles per weekday – which is within the capacity of a battery-powered vehicle, 57% of DMV.com survey participants listed range of the vehicle as a concern. There are also crucial perception issues regarding the availability of charging stations. The study by the UCS and Consumers Union found that 56% of U.S. households have the ability to charge a green technology vehicle, but 58% of survey respondents to the DMV.com survey suggested they would struggle to find a charging station – the single biggest concern participants had when considering purchasing a hybrid or electric vehicle.

Understanding the roadblocks that prevent the demand for hybrid and electric vehicles from translating into sales is important; but, questions about what legislators and automakers can do to improve the likelihood that consumers will consider green technology vehicles in the future remain. An issue of increased importance is education. Over a quarter of all respondents to the DMV.com survey admitted that they had never researched or read about alternative fuel sources or green vehicles. Amongst those respondents, 76% stated that they would purchase a standard fuel vehicle as their next car purchase. When respondents had researched or read about alternative fuel sources almost half said they intended to purchase either an electric or hybrid vehicle as their next car.

There is also a need for stronger promotion of the cost-effectiveness of buying a green technology vehicle in the long term. When comparing a popular standard fuel and hybrid option from Toyota and assuming that the driver has a 55/45 city to highway driving ratio, the extra cost of purchasing a hybrid vehicle was negated in six months and the driver would save approximately $7,600 in the ten years following that period. When coupled with tax incentives both federally and at the state-level, the amount of money saved purchasing a green technology vehicle can be well over $10,000 in a ten year period.

Given the gap between desire and purchase, there is clearly a great deal of work that needs to be done by legislators and automakers to accelerate the demand for green technology vehicles. Given that the two biggest concerns are still cost and access to charging stations, focus should be placed on two main pillars: cost-reduction through efficiencies and rebates as well as increased education on the ability to use home chargers. For electric vehicles improving the range from batteries is also critical. Although the government and automakers have worked diligently to reduce costs and offer rebates on green technology vehicles, consumers are still widely unaware of these opportunities and even less aware of the current driving capacity of hybrid and electric cars. By reinforcing these principles, it is likely that the United States will see millions more green technology vehicles on the road by the end of the decade.