Oct 23, 2020 - Economy & Business

Misperceptions may be holding consumers back from buying electric vehicles

A blue electric vehicle is charged at a charging station
Photo by picture alliance via Getty

Analysts and investors are getting ever more bullish on electric vehicles, but with little regard, it seems, for consumer attitudes.

Why it matters: Tightening regulations around the world could indeed shove the vehicle market toward electrics more quickly than expected. But if consumers are reluctant to buy, automakers will have to slash prices and absorb the losses, erasing investors' rosy hopes.

What's happening: Morgan Stanley raised its forecast for battery electric vehicles this week, saying they'll account for 31% of global auto sales by 2030.

  • IHS Markit says EVs will be 60-80% of cars sold by 2050.

Yes, but: While a new report from Resources for the Future finds 57% of future car buyers are willing to consider buying an EV, it also uncovered significant sources of hesitation based on perceptions that aren't necessarily accurate:

  • Batteries may catch on fire
  • Maintenance costs are higher
  • EVs have weaker acceleration than gas-powered cars
  • It's difficult to replace batteries
  • There aren't enough EV mechanics

Of note: 65% of respondents said they have not driven nor know anyone who has driven an EV. 

The bottom line: Automakers have a serious education challenge ahead.

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