RESEARCH commissioned by Angle Auto Finance shows electric vehicle (EV) buyers are on a very different purchase journey to ICE vehicle buyers and therefore need to be treated differently when they arrive at the dealership.

Speaking at the recent AADA Convention and Expo Susan Jobson, head of strategic growth at Angle Auto Finance and Evange Epa, national business performance manager, said that vehicle financiers are seeing significant growth in the number of EVs they are funding.

But research shows there is a need for business managers and sales staff in dealerships to acquire the knowledge required to help buyers through the more complicated research process EV buyers are undertaking prior to purchase.

Referring to the growth in EV loans Angle Auto stated that in the financial year 2021-22, 3 per cent of all vehicles that were financed were electric vehicles. In 2022-23 that rose to 9 per cent and then the last financial year 19 per cent of loans were for electric vehicles.

Ms Jobson said: “By 2025, we expect market share in this space will be at 23 per cent and then by 2030 over 36 per cent of market share will be electric vehicles.”

She said that research conducted by Retail Finance Intelligence (RFI) Global for Angle Auto Finance of people with car loans and prospective car loan holders showed that EV buyers need to gather and process far more information about owning an electric vehicle than other buyer-types need to gather.

In order to better understand this customer segment, Angle Auto commissioned RFI Global to survey Australian car loan holders about their EV purchase experience, their research journey, their intention to purchase and how they view finance.

Ms Jobson said: “Research prior to a vehicle purchase is obviously common and it’s conducted across a wide variety of mediums, but people in the electric vehicle space not only want to think about the electric vehicle that they’re purchasing, but also, they want to know about some other elements that are a little bit more complicated, for example, around charging.

“What does that look like and where will the customer be predominantly charging the vehicle? And then they want to know what the costs associated with that charging look like.”

She said the data revealed that electric vehicle and hybrid vehicle buyers are confident in the decision that they’re making, but they think that the buying process can be quite time- consuming.

“Car loan holders on electric or hybrid vehicles were confident to make that purchase, but they recognized that it required a lot more process, a lot more research, and the process took much longer than if they were to be buying a petrol vehicle.

“They also relied on a whole heap of different sources of information and consulted with friends and family who may have already taken the leap into the electric vehicle space to help make that decision for them.

“It’s therefore worth seriously considering the investment of time that a customer takes to make that first initial electric vehicle purchase. We should be able to answer questions on the research that they’ve done on charging locations, charging times, the performance of the vehicles and any other element that’s not the same as buying a petrol vehicle.

“Understanding that prospective buyers want information to make their electric vehicle decision-making, both existing and prospective car loan holders, and that they would like information on a wide range of topics.

“They really want to know how many kilometers different models of electric vehicles will cover before they need to be charged again, the overall maintenance and costs associated with running an electric vehicle versus a petrol car, and they really want to know where EV car chargers are located.

“They’re happy to receive information on a wide range of topics. We just need to keep that in mind when they’re coming in (to the showroom) – because buying a petrol vehicle is definitely an easier process.”

Ms Jobson asked: “If we look at prospective car loan holders, how could we encourage them to buy an electric vehicle if price is key?

“One in two prospective loan holders could be encouraged to buy an electric vehicle if the vehicle fell within an affordable price range.

“With so many electric vehicle manufacturers coming to Australia and having such a big range of models at all different prices, there’s a really great opportunity for us to engage with our customers and find out what car could suit their needs, but then also what the price range would look like to find the exact vehicle that’s best for them.

“They could also be encouraged to take the leap to get into an electric vehicle if they have a whole heap of information about things like government schemes and anything that will reduce the cost of ownership. And then, separate from price, they also want to know about car chargers, which batteries suit long distance driving and the location of the EV chargers; particularly those in proximity to where they live.

“So the price topics tie nicely into getting the customer really informed, helping them understand how easy it could be and could actually make them commit to buying this type of vehicle,” Ms Jobson said.

Referring to financing an EV, Mr Epa said: “We need to ensure that our business managers and sales consultants are product specialists because 56 per cent of customers stated that they had to put more effort into researching this journey versus their ICE purchase.

“Currently 77 per cent of customers who walk into a dealership have already started their finance journey in some way, shape or form, meaning they are already well researched on their finance options, and coming in pre-loaded with quite a lot of information.

“With this situation already well in play, how much more intense does it become when facing EV buyers, who we recognize put even greater effort into their purchase intentions? So there’s one element telling us that better education is required.”

The potential impact of misinformation was another challenge identified by the research, which  found that 42 per cent of consumers were relying on friends and family and word of mouth.

Mr Epa said, “Whether it’s misinformation they have been receiving about some of the products via second hand experiences from their friends and family, or whether it’s their knowledge of the financial landscape, the products they’re investing in, or researching. Collectively they might not be as well equipped to understand these topics at large and how it affects their own personal circumstances.

“This too shows us that there’s opportunity in offering greater product specialisation, and greater understanding within the dealership of the products that you’re selling.

“It highlights the need for a balance between product specialisation and sales ability to maintain and control that customer experience – so that you can deliver a great experience and hopefully increase your retention chances,” Mr Epa said.

By John Mellor