Increasing numbers of exciting new electric vehicle models and historically high gasoline prices are driving a surge in EV sales in the U.S. Sales are expected to total about 670,000 in 2022, according to a forecast by market consultant AutoPacific.
That would be a 37% increase from 2021’s 488,000 EV sales and marks the second year of what will be a long string of large annual hikes in electric car and truck sales, the California-based consultancy said.
AutoPacific is predicting that EV sales nationally will top the one million mark sometime in 2024 and hit two million—more than 10 percent of a healthy year’s total new vehicle sales—by 2026. That compares to less than 3% of sales in 2021.
With new electric pickups such as the Rivian R1T, GMC Hummer EV and Ford F-150 Lightning, crossovers such as the Hyundai Ioniq 5, Kia EV6 and Audi Q4 e-tron, and sedans and sports sedans such as the Polestar 2 and Porsche Taycan, “the market is seeing exponential growth” in EV nameplates, said Ed Kim, AutoPacific president and chief analyst.
There’s been double-digit annual growth in EV intent among consumers in the past two years, with 11% of new-vehicle shoppers now indicating that they will consider an EV for their next purchase, he said. That’s up from 10% consideration in 2021 and a flat 4% in each of the previous years.
Excitement can breed Price Inflation
“There’s an avalanche of new EVs coming, in segments that people want, and it is a huge factor in increased consumer intent to buy EVs,” Kim told Forbes Wheels.
Electric pickups especially have caught consumers’ attention. Ford Motor Co. had so many advance reservations for its F-150 Lightning—which won’t start hitting buyers’ driveways until this spring—that it stopped taking orders late last year and has only recently reopened its reservation system. GM had the same issue with its upcoming Hummer EV.
Ford said in January that and is so great it will not be able to fill all of the orders on hand this year and that it is nearly doubling its annual production goal for the Lightning—to 150,000 from 80,000.
More model introductions make EVs more visible to shoppers and increase shopper interest. On the downside, increased interest can translate to dealer mark-ups that go well over the Manufacturer’s Suggested Retail Price – often called the sticker price—on new EVs that are still in limited supply while production ramps up.
In recent weeks as the well-reviewed Kia EV6 and Hyundai Ioniq 5 have begun arriving on dealers’ lots, for instance, consumers have complained of markups that add thousands of dollars to the price. In one reported instance, a California dealership added a $25,000 markup and more than $2,000 in non-essential extras to boost its asking price for a top-of-the-line EV6 to $87,231 from the MSRP of $59,945.
Consumers also have complained of Ford dealer markups of $10,000 to $30,000 on electric F-150s.
Many automakers, including Ford, General Motors, Hyundai and Kia have issued pleas to their dealers to stop demanding price premiums for their new EVs. “It’s typical bad behavior by some dealers,” Kim said, adding that he doesn’t see it as having a significant impact on how consumers view EVs.
Range, Charging Time Still Issues
Fuel prices and fueling convenience still play a big part in car shoppers’ decisions, though, and gas-electric hybrids remain more popular than pure electrics.
Many shoppers prefer hybrids because owners can keep going to gas stations and don’t have to learn new fueling habits. But most of those who intend to buy or lease an EV say that a major reason for their decision is that they’ve done the match and found that it costs less on a pennies-per-mile basis to charge batteries than to fill a gas tank.
Still, 11% of shoppers leaning toward EVs means 89% aren’t.
A lot of work on changing consumer attitudes and beliefs needs to be done to reach the national goal of a 50% EV sales share by 2030. Other studies have found that consumers continue to be leery of EVs because they aren’t comfortable with the idea that taking a long trip in one requires advance planning and multiple recharging stops.
While most EVs have more than enough range to accommodate the average driver’s daily travel, and while few people drive more than the average EV’s range of 250 miles per day, drivers still perceive a need to be able to take off and travel on the spur of the moment, researchers have found.
Talking consumers out of internal combustion vehicles, which don’t require changes in routine to accommodate an EV’s charging needs “will be an uphill challenge for years to come,” Kim said.
Consumer Education Needed
AutoPacific has conducted a bi-monthly Fuel Price Impact Study for nearly two decades. The survey of more than 500 vehicle owners asks how fuel prices affect them in various ways, including their plans for new car and truck purchases.
While interest in both hybrids and EVs has been increasing, intent to make an EV the next purchase has grown fastest but needs to grow more if EVs are to compete meaningfully with internal combustion vehicles. “There’s a lot of misinformation and misunderstanding about EVs,” Kim said. Most EV advocates call for increased efforts by automakers and the government to increase consumer education efforts.
Increasing awareness of EVs, the types and price ranges available, improvements in the EV charging infrastructure and in EV charging speed, increased range and the perceived environmental friendliness of electric vehicles does help improve purchase intent levels, Kim said.
The top reasons for EV purchase intention today, according to the AutoPacific survey, are that charging is cheaper than fueling and that EVs are better for the environment and are the way of the future. Consumers also like the quietness of EVs and the convenience of charging at home rather than going to gas stations.