One of our biggest stories last week was a report about a study that showed 46% of EV owners in the United States say they’re going to go back to a gas-powered car. At the time I wrote the story, I lacked an actual copy of the study, so I was just going on what was already reported.
After posting the story I got a lot of feedback from people stating it was “fake news” and wanting to get more details on how the study was done, with a lot of chatter on X/Twitter over the findings.
I’ve now got a copy of the McKinsey Mobility Consumer Pulse (MMCP) study, produced by McKinsey’s Center for Future Mobility (MCFM), and I now have a lot of answers to the various questions people had about the study.
What Is This Study? Who Answered The Questions?
The report, which I will refer to as the MFCM study, surveyed more than 30,000 respondents globally who “regularly use mobility” and asked more than 200 questions about mobility, car ownership, and consumer preferences.
McKinsey is a massive consulting firm and “mobility” is of interest to governments, investors, and large companies (all of which buy services from firms like McKinsey). Specifically, the company says the MCFM:
“[H]as worked with stakeholders across the mobility ecosystem by providing independent and integrated evidence about possible future-mobility scenarios. With our unique, bottom-up modeling approach, our insights enable an end-to-end analytics journey through the future of mobility—from consumer needs to a modal mix across urban/rural areas, sales, value pools, and life cycle sustainability.
Since 2021, the survey has included consumers from the 15 biggest auto markets (ranging from massive markets like the United States and China to smaller ones like Norway and South Africa). Overall, the countries included account for more than 80% of global sales volume.
According to the MFCM, the survey was conducted in February of this year.
Where Did That 46% Number Come From?
Here’s the question that was asked of current EV owners:
How likely are you to switch back to a traditional combustion engine vehicle based on your current experience with the electric vehicle you own?
Globally, the average number is about 29%, but you can see the full chart here:
The country where someone is most likely to switch back to an internal combustion engine-powered car is Australia, at almost half, followed by the United States and Brazil. The reasoning?
I don’t have a breakdown for American consumers, but globally the biggest reasons for switching back were:
- Total cost of ownership too high (34.5%)
- Cannot charge at home (33.8%)
- Needing to worry about changing is too stressful (31.9%)
As someone who regularly borrows electric cars but cannot charge at home, I can relate to this. Public charging simply isn’t good enough for me and I live in a relatively dense urban environment.
More People Than Ever Want EVs Globally, They Just Want Them To Be Cheaper
The largest barrier to ownership might be practical concerns around charging, but that doesn’t mean people aren’t interested in electric cars. The number of respondents globally who say that they’re going to purchase a BEV (battery electric vehicle) for their next car grew to 17.6% this year, up from 14% in December of 2021.
Overall, 70% of respondents said they’d either be getting a BEV or PHEV next or, at the very least, only expected to own one more gas-powered car before switching over to an electric car.
That, too, conforms with my experience as I plan to buy a hybrid and then, hopefully, an electric car if charging around me improves.
Still, the reasons why people haven’t switched over yet have a lot to do with the fact that EVs are too expensive in most places. The top reasons given for not wanting to switch were:
- Too expensive (45%)
- Charging concerns (33%)
- Driving range concerns (29%)
Obviously, the “expensive” issue is geography dependent. In China, there are plenty of affordable electric cars so only 9% of EV skeptics interviewed there were worried about cost of ownership. Norway was the only other country that low, at 29% of EV skeptics, but Norway has become the largest EV market proportionally due to extremely high subsidies for electric cars.
And, going deeper into consumers in the United States, many are likely to postpone a new EV purchase because of “the current economic situation” as you can see in this graphic:
This isn’t just in the EV market. The average age of American cars is now 14 years as people hold onto their cars, EV or ICE, a lot longer. There are many ways to interpret “the current economic situation” and I think a lot of it has to do with higher uncertainty and higher interest rates.
People Also Want More Range
Here’s an interesting tidbit from the study:
Range expectations have been increasing over time (+ ~30% in the past 5 years) and are outpacing actual range improvements: Since 2022 consumers demand 5% more range, while actual range increased by only 2%
As of the most recent study, people expect at least 291 miles of maximum range, on average, before they’d consider getting a new electric car. This is a little higher than many vehicles currently for sale, but it puts quasi-affordable vehicles like the Tesla Model Y, Mach-E, and Equinox EV on the table.
I Don’t Think This Is Entirely Bad News
If you love electric cars or think everyone should be driving an electric car then this is not what you want to hear. It’s hard enough to get someone to switch to an electric car and hearing that almost half of owners in the United States want a gas-powered car isn’t encouraging.
The study didn’t ask if those people would consider buying a hybrid or a PHEV when going back to a gas-powered car, but that’s not an unreasonable assumption (especially if those owners have access to home charging).
While there are many good electric cars on the market, the next generation of EVs will hopefully better meet range requirements and cost less money. If automakers can deliver a little more range for a little less money then new consumers seem to be there according to this study.
At the same time, it’s important for the industry and the government to work together to solve charging issues, especially in denser urban corridors.
Infrastructure is the key word. The building that houses my employer setup a solar array specifically to power the HVAC and free L2 chargers as a perk. Zero cost for fuel finally pushed me to getting BEV and several other co-workers have also got either a BEV or battery hybrid as a result, and all are happy. As I am too lazy to setup a L2 home charger the combination of free fuel through the weekdays and using my slow 110 (during off peak hours) at home is enough to make it my primary vehicle. As a note, a DC fast charger is available within 2 miles but use comes to higher cost than with gasoline so patience is required to realize savings.
I can understand the regret when those that purchased did not plan properly but lack of foresight effects all possible purchases.
I only hope that the power monopolies finally decide to invest in their infrastructure so the alternative powered vehicles can become more accessible, then our transportation use will fuel more job growth locally to create and distribute the power.
Infrastructure is the key word. The building that houses my employer setup a solar array specifically to power the HVAC and free L2 chargers as a perk. Zero cost for fuel finally pushed me to getting BEV and several other co-workers have also got either a BEV or battery hybrid as a result, and all are happy. As I am too lazy to setup a L2 home charger the combination of free fuel through the weekdays and using my slow 110 (during off peak hours) at home is enough to make it my primary vehicle. As a note, a DC fast charger is available within 2 miles but use comes to higher cost than with gasoline so patience is required to realize savings.
I can understand the regret when those that purchased did not plan properly but lack of foresight effects all possible purchases.
I only hope that the power monopolies finally decide to invest in their infrastructure so the alternative powered vehicles can become more accessible, then our transportation use will fuel more job growth locally to create and distribute the power.
Yeah EV applicability still varies a lot per person’s situation. Cities and some suburban areas, it makes a lot of sense (depending a bit on the cost of power). Apartment complexes with expensive/hard-to-find recharge nearby – not so much.
Frankly there’s no excuse for why we don’t have more bolt-like ($26k) cars. Where I live, that’s $8 to recharge at home. Tires with 60k warranty are $760/set (MICHELIN CrossClimate2 for a bolt).
Acceleration used to be a luxury, and now it’s so much more available on an EV. I want to see some EV hot hatches.
Yeah EV applicability still varies a lot per person’s situation. Cities and some suburban areas, it makes a lot of sense (depending a bit on the cost of power). Apartment complexes with expensive/hard-to-find recharge nearby – not so much.
Frankly there’s no excuse for why we don’t have more bolt-like ($26k) cars. Where I live, that’s $8 to recharge at home. Tires with 60k warranty are $760/set (MICHELIN CrossClimate2 for a bolt).
Acceleration used to be a luxury, and now it’s so much more available on an EV. I want to see some EV hot hatches.
We were early adopters of home solar panels. I leased a 2013 Leaf and then a 2016 Leaf. I switched back to an ICE car for several reasons. I was debating whether to go back to an electric car… until we received our most recent electric bills. Evidently, with Southern California Edison, once you have had solar for 20+ years, you LOSE your preferential billing. We’re now on a totally different plan where our distribution charges for one month are close to our entire 2023-24 yearly bill for the electricity generation. We’re also now only earning a penny per KwH on generation. We produced a third more energy than we consumed but still had a bill around $250 for one month. Half of that bill was for generation! I don’t know how you have negative generations but you’re still charged around $125 a month. It’s new math.
I don’t see how this push to electrify everything (home appliances, even pool heaters) is going to be feasible and it will definitely be more expensive. I don’t see an electric car in my future.
Net Energy Metering 3.0 is the trouble. Edison and PG&E convinced the California state government to disincentivize residential solar unless there’s battery storage attached. It’s ridiculous, and it’s killed the residential solar sales and installation industry in the state.
It kind of makes sense. The “duck curve” in CA is really strong to the point that there’s basically zero demand for any additional solar generation and lots of net demand right around sundown. Hopefully as storage ramps up and improves it’ll improve drastically, but that could be 5-10 years to really settle out.
We were early adopters of home solar panels. I leased a 2013 Leaf and then a 2016 Leaf. I switched back to an ICE car for several reasons. I was debating whether to go back to an electric car… until we received our most recent electric bills. Evidently, with Southern California Edison, once you have had solar for 20+ years, you LOSE your preferential billing. We’re now on a totally different plan where our distribution charges for one month are close to our entire 2023-24 yearly bill for the electricity generation. We’re also now only earning a penny per KwH on generation. We produced a third more energy than we consumed but still had a bill around $250 for one month. Half of that bill was for generation! I don’t know how you have negative generations but you’re still charged around $125 a month. It’s new math.
I don’t see how this push to electrify everything (home appliances, even pool heaters) is going to be feasible and it will definitely be more expensive. I don’t see an electric car in my future.
Infrastructure infrastructure infrastructure. Folks buying $50k+ EVs are more likely to be able to charge at home than those shopping the sub 30k market, without ubiquitous and reliable charging the take rate is going to be low and the regret rate will be high. Also, at least for now, range is a big cost factor so cheaper cars will need better infrastructure to be viable.