Good news seems hard to come by these days, so here’s a kernel of it, free of charge: Gas prices may finally, impossibly, remarkably be on the decline.
Months of cringe-inducing trips to the gas station are fading into the rearview mirror, with AAA announcing this week that the price of a gallon of gas has now fallen every day since its peak on June 14.
How long and how far this decline continues remains to be seen, but the record prices at the pump were enough to force nearly two-thirds of consumers to change their driving habits or lifestyle since March, AAA says.
We drove less, ran more errands at once, cut back on shopping and eating out, and put off major purchases and vacations to compensate.
One thing we didn’t do? Buy more electric vehicles.
This 2022 iteration of the study found that the upfront cost of EVs remains the biggest reason people aren’t buying them yet.
Shoppers were asked to list the top three reasons they wouldn’t buy an EV; 48 percent of respondents said electric vehicles were too expensive, 44 percent said they had concerns about EVs’ range, and 36 percent said they had concerns about where to charge the vehicle.
These results track with earlier versions of the survey, conducted in 2021 and 2019, in which consumers repeatedly listed the same three reasons for not choosing an EV, as well as a 2021 survey that explored attitudes toward electric trucks.
But what was striking about this 2022 version of our EV survey was how consumers responded when we asked them how the price of gas might affect their decision to go electric.
In short: It won’t.
Specifically, we asked people what dollar amount the price of a gallon of gas would need to hit in order for them to seriously consider an EV for their next vehicle.
The most common response? “It’s not about the price of gas; I wouldn’t choose an EV for other reasons.” Nearly a quarter of people in our survey chose this answer, far more than any other choice.
So while exactly none of us enjoyed pumping all that pricy petrol into our cars over these last several months, the sticker shock at the gas station wasn’t enough to outweigh the sticker shock for EVs at the car dealership.
And while traffic to listings pages for EVs and plug-in hybrid vehicles is certainly up on Autolist and CarGurus (our sister company) since the beginning of the year, there’s plenty of evidence that the high upfront cost of electric vehicles remains too big of a deterrent and that’s as far as consumers’ journey into looking at EVs takes them.
The bad news is that after years of declines, the price of battery cells in EVs – the biggest factor in their cost – is expected to start rising next year.
Currently, battery cells run about $128 per kilowatt-hour; next year they could drop as low as $110 per kWh. That’s tantalizingly close to the $100-per-kWh sweet spot that most analysts say could make electric vehicles roughly the same price as their gas counterparts
But after bottoming out in 2023, they’re expected to shoot up again some 22 percent through 2026.
So what can be done in the meantime? More cash for EV buyers is a nice place to start, according to consumers.
Autolist polled shoppers on whether they would support additional incentives for EVs at the federal, state, and local levels. Two thirds of respondents said yes to things like tax incentives, rebates, and subsidized public charging.
Congress appears to be listening. The latest Senate deal currently in the works on a package of climate and tax measures would include an extension of current tax credit for EVs, and a potential lifting of the current cap on the number of EVs sold by an individual brand that are eligible for a tax credit, though the final form the measures will take remains to be seen.
We started with some good news, so we’ll end with some too – two encouraging signs for EVs in the U.S. that Autolist’s EV survey uncovered.
First, gone are the days when your only choice for a non-luxe EV was a petite hatchback.
Electric vehicles are finally coming in the size and shape that consumers are buying anyway. When asked what body style of EV they’d be most likely to buy, the most popular answer was ‘midsize crossover’ with 16 percent of the vote, followed closely by ‘pickup trucks’ with 15 percent.
This should help tip more consumers into electric vehicles since they see fewer compromises over the gas model they’re used to. The electrification of America’s beloved pickup truck in particular could have an outsized impact on our adoption of EVs; the release of models like the Ford F-150 Lightning (above), Chevy Silverado EV, Ram 1500 electric, and an EV version of Toyota’s next-generation Tacoma estimated to show up in 2025 will be interesting to watch.
Second, Autolist asked consumers how they would use an EV if they bought one today. Fifty nine percent said it would be they use it as their primary vehicle; 19 percent said as a secondary vehicle, 15 percent were unsure; the final seven percent said as a third or extra vehicle.
What this tells us is that in theory a majority of shoppers are at least open to the idea of welcoming an EV into their daily use-case. So the interest in electrification is there; if no one saw an electric vehicle fitting into their lives, these numbers would likely be reversed.
So now all we need are better/cheaper battery cells, increased investment in charging infrastructure, greater government incentives, and more models to hit the market.