Higher Fuel Prices Could Lead To More EV Sales, Survey Finds

Money talks, that’s why most Americans who were surveyed by Deloitte said that the primary reason for switching from a gasoline-powered car to an electric vehicle is the latter’s lower operating costs.

The survey, which had 1,003 respondents in the United States, concluded that 66% of those who answered Deloitte’s questions ranked lower fuel costs as their top reason for getting an EV, while 53% noted environmental concerns as their primary motivator, writes Automotive News.

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Low operating costs lure people away from ICE and toward EVs

A Deloitte survey found that most Americans who switched from a gasoline-powered vehicle to an electric car did so because of the latter’s lower operating costs.

That said, in the context of gasoline prices dropping 10% last year (with more cuts expected in 2024), consumer intent to buy an EV fell by 1% compared to the previous year, while intent to purchase an internal combustion engine car went up by 9% in the same period.

In other words, if gasoline prices start to increase in the U.S.–something that’s expected to happen in a few years, according to Deloitte–the EV adoption rate could get a bump in the right direction.

“Where fuel prices are going is going to be hugely important to the level of [EV] adoption that we see over time,” said Ryan Robinson, automotive research leader at Deloitte. “As we’re seeing fuel prices start to moderate, it does place downward pressure on overall momentum towards EVs,” he added.

Sticking to the money problem, the same survey found that the purchase price is the most important factor for U.S. buyers when determining their next car purchase, with most expecting to pay less than $50,000 for their next vehicle.

Tesla Model 3 and Model Y

This goes hand in hand with other surveys and studies that found the high entry price of EVs to be the biggest barrier to a higher adoption rate in the United States. Putting two and two together also gives some context to why Tesla’s most affordable vehicles–the Model 3 and Model Y–are so successful.

The Model 3 starts from less than $40,000 and the Model Y goes from $43,990, but that’s just part of the picture because there are other manufacturers on the market that offer similar deals. The base Volkswagen ID.4, for instance, starts at $38,995, but its sales numbers pale in comparison.

For context, Tesla sold a little over 650,000 EVs last year in the United States, according to Cox Automotive, while Volkswagen sold just over 630,000 cars (EVs, hybrids, and ICE cars combined). On the EV front alone, VW sold fewer than 40,000 ID.4 crossovers Stateside. although the numbers are increasing.

2023 Volkswagen ID.4

So pricing alone isn’t what kept VW and other players from selling more EVs. Range, availability, and charging concerns are also part of the mix, with Deloitte’s survey pointing out that the charging experience is an important factor when consumers decide to buy an electric car.

“It’s not just the time that the vehicle is plugged in, but it’s the time that it takes to find a charger or find one that works, waiting to access that charger, and the time it takes to charge the vehicle itself,” Robinson said.

What went through your mind when you decided to switch to an EV? Let us know in the comments below.