With billions of dollars in EV investments staked on the wide adoption of EVs, the report said that the low sales rate of EVs combined with a lack of enthusiasm by dealers to sell EVs was holding back future growth.

In its latest report, ‘Evolution of Mobility: The Path to Electric Vehicle Adoption’, Cox Automotive researched 308 dealerships in the US and 2503 US consumers who were divided into EV owners, EV considerers and EV non-considerers.

The report’s objective was to study the gap between the barriers and expectations of consumers and dealers and compare that to the current EV realities in the US.

Despite being based in the US, the study has important ramifications for Australia.

The research is the latest chapter of the Cox Automotive ‘Evolution of Mobility’ study that also examines the dealership experiences of EV shoppers and reveals the key support areas that dealers need from OEMs to increase EV sales. 

Dealers responded to the study by outlining several operational challenges that made it more complex for them to sell EVs.

Slightly more than half (55%) of dealers surveyed reported a lack of inventory – both availability and number of models – and half of dealers said there are not enough public charging stations. 

Cox said that the perception of lower profits for EVs was partly to blame, with 54 per cent of dealers seeing lower return on investment for sales of EVs compared to petrol/diesel vehicles. 

“In addition, one third of dealers pointed to the lack of OEM sales and marketing support and poor sales training as a challenge,” the report said. 

“Among dealers who are receiving support, only one third of them find it helpful. Additionally, only nine per cent of dealers feel OEMs are exerting pressure to hit certain EV sales targets, decreasing the urgency for the dealership.” 

But Cox found that car-makers are in a prime position to fill in the gaps with their dealer partners and that dealers receiving quality OEM support enjoyed higher sales. Those with support were rewarded with 88 per cent more EV sales than those who receive less support. 

Cox’s study found that non-considerers named the leading barriers to EV adoption as battery life concerns and charging – or range – anxiety (83%), and total costs of the EV (70%). 

“While these factors have continued to test consumers’ and the industry’s acceptance of electric vehicles, the study sheds a positive light on an electrified future with the right education and technology in place,” the report stated. 

Cox Automotive Mobility Group associate vice-president of emerging technology Lea Malloy said: “This study is another affirmation of the importance of consumer education in the electric vehicle category. 

“Consumers see benefits in an electrified future but still need more assurance from dealers and auto-makers surrounding EV ownership. 

“Collectively, dealers and auto-makers can deliver the confidence needed to advance EV adoption.” 

The study also found that 77 per cent of considerers and 87 per cent of non-considerers perceived the initial costs for EVs as “somewhat or much more” than internal combustion engine vehicles. 

In reality, Cox found that the price gap between EVs and petrol/diesel-powered vehicles is closer than most realise and continues to tighten. 

“In tracking average transaction price, EV pricing has only minimally increased in the last seven years while pricing for new internal combustion engine vehicles has spiked almost 19 per cent,” the report said. 

“EVs could become even more attractive and affordable with the application of new rebates and other EV-focused purchasing incentives.”

Almost all EV considerers (98%) believe it is less expensive to own an EV, with 65 per cent thinking there are cost savings to fuel/charging and 54 per cent thinking there are cost savings to maintenance. 

In fact, according to Kelley Blue Book, average five-year cost-to-own savings is significant for some EVs versus their petrol/diesel-powered counterparts. 

Overall, ownership is 58 per cent cheaper for EVs, with a 60 per cent fuel/energy saving and 25 per cent in service and maintenance costs over five years. 

Cox said that apart from market leader Tesla, EV awareness remains low for most auto-makers. 

Tesla’s awareness at 81 per cent is nearly double every other manufacturer – Toyota at 52 per cent, Chevrolet at 47 per cent, Nissan at 42 per cent and Honda at 39 per cent. 

“However, consumer awareness and consideration are likely to rise with more inventory, more variety and affordability coming to the EV category in the next several years,” the report said. 

“With these new models, consumers are also hoping for more performance and technology, particularly around autonomous and safety features.”

In addition to concern over the initial cost of purchasing an EV, consumers also have reservations over battery life and the costs associated with battery replacement. 

Of EV considerers, the report said that 50 per cent view the average battery life at 160,000km or more, and 46 per cent thought average battery life was 105,000km or less. 

“This is in comparison to the expected lifespan of an ICE powertrain of about 320,000km, according to Consumer Reports,” the study said. 

“In the US, to provide assurance over battery lifespan and replacement cost concerns, the federal government instituted a mandate for OEMs to offer a minimum of an eight-year, 160,000km warranty on batteries. 

“Some manufacturers are offering even more protection, such as the lifetime battery warranty on the Hyundai Kona EV.” 

More than half (52%) of EV owners still elected to purchase the extended warranty for their battery, Cox found. 

“Much of this risk will likely soften with the advancements in battery technology and manufacturing,” the report said.

“In fact, the cost of lithium-ion automotive batteries has decreased 77 per cent since 2010 and another 45 per cent decrease is anticipated by 2021. These are eventual cost savings that will benefit dealers, OEMs and EV shoppers.” 

The study was clear that the range of an EV remained a top concern of considerers, who expect a range of about 380km, but ultimately are looking for a range of 480km, which is more in line with current petrol-powered vehicles. 

“With most current and future EVs meeting or exceeding consumer expectations, range should become less of a deterrent,” the report said. 

“The bigger challenge facing the industry is the delivery of a sufficient public and private charging infrastructure. 

“There is a clear need for more charging stations with 68 per cent of EV owners citing a need for more charging availability around their home and 63 per cent desiring more around their work. 

“Consumers also want to multi-task while they charge away from their home or workplace. 

“In line with today’s on-demand economy, EV shoppers also showed interest in future battery charging services, with owners and considerers responding favourably to mobile (77% and 83% respectively) and robotic (74% and 76% respectively) battery charging services.”

By Neil Dowling