EV Enthusiasm Growing But Tenuous CarGurus Study Shows

High gas prices have sparked increased consumer interest in electric vehicles but that interest is both highly conditional and somewhat tenuous according to new studies by car buying and research site CarGurus.com.

In its April Intelligence Report, consumer interest in both new and used electric vehicles has kept pace with still high gasoline prices, despite some small dips. According to the AAA the price per gallon in the U.S. averaged $4.19 as of Monday.

A CarGurus online consumer survey regarding sentiment toward EVs taken in three waves during February, March and April found interest in electric vehicles had hit a trough until gas prices began to rise in late February.

According to the survey of 2,176 consumers, at the end of February 32% said they expected to own an electric vehicle in the next five years while 51% put their timeline for EV ownership at 10 years.

By April, when gas prices took residence over the $4.00 a gallon mark those numbers increased to 40% and 60% respectively.

But what goes up, is likely to go down and that moderation of the old saw is already proving itself as gas prices slowly decrease according to CarGurus director of industry analytics Kevin Roberts.

“Historically, consumers have been very temporal based on gas price shift,” Roberts told Forbes.com. “If gas prices go up they start looking toward alternatives, they may even purchase those alternatives, but if gas prices go down or moderate they’re likely to revert back to their norm rather quickly, like six months or so.”

Consumers also seem to be have developed a greater tolerance for high gas prices. In last year’s survey 56% said they would be much more likely to consider an EV if the price at the pump reached $5.00 a gallon. But this year only 27% pegged that price as enough of a reason to consider trading in their internal combustion vehicle for one powered by batteries.

Reluctance to making the switch is also based on value and convenience for a good many of the consumers responding to the CarGurus survey.

“I still think there’s some hesitancy in the market because EVs on a dollar for dollar basis are still more expensive than in internal combustion engine. That will hold some people back,” said Roberts.

Indeed, while 67% agreed EVs are the “wave of the future,” on 39% agreed with the statements that EVs or hybrids “provide value worth their higher asking prices.”

The top three choices of factors that could convince them to make the switch were increased driving range and charging speed, more charging stations in their area and cost parity with internal combustion engine vehicles factoring higher prices versus lower cost of ownership.

Any reluctance aside, overall interest in electric vehicles is growing with the introduction of highly publicized vehicles in more body types such as the Ford F-150 Lightning and Mustang Mach-E, Cadillac Lyriq, GMC Hummer EV, Hyundai IONIQ 5.

“Consumers are starting to gain more mainstream acceptance,” said Roberts. “Some of those range anxiety charging concerns are still there but not as high as initially. As we’re seeing more performance cars come out, light trucks, CUV’s, SUVs and pickups come out I think we’ll start to see consumers expand their range of what brands they’re looking for.”

They’re also expanding their range of what brand electric vehicles they’ll consider and it’s not news Tesla
TSLA
boss Elon Musk will want to tweet about. Oh, Tesla is still the EV frunk runner but consumers have wandering eyes.

According to the CarGurus study, when asked what brand EV they’d consider, on the condition they were available, 45% of potential EV buyers named Tesla, but Toyota was close behind at 44% with Honda at 40% and Ford in fourth place named by just 31%.

Of course, there’s a catch. Consumers who want to go electric are caught up in the same fix as everyone shopping for wheels—there’s simply not much to choose from as the global semiconductor shortage and other supply chain issues have slowed vehicle production.

According to J.D. Power U.S. dealer lots collectively had fewer than 900,000 vehicles in April compared with nearly 1.7 million a year ago. That situation isn’t likely to improve this month.

“May is traditionally one of the larger sales months of the year, enabled by Memorial Day promotional activity and discounts from manufacturers. This May will be very different as inventory constraints will persist and manufacturer discounts are unlikely to reappear in any meaningful way,” Thomas King, president of the data and analytics division at J.D. Power in a release.

While selection at new car lots is sparse, used car dealers are probably not the place to base one’s shopping trip for an EV either

“You’re dependent on what was sold one, two, three, four, five years ago and there just weren’t that many EVs sold,” observes CarGurus’ Kevin Roberts.

There still aren’t, but that’s slowly changing. Through March only about 4.5% of all vehicles sold were EVs, but, Roberts predicts that despite any doubts among some consumers, “It’s a growing number.”