Consumers’ fears about electric vehicles persist, slowing the EV revolution

By Jon Dulin
Wealth of Geeks

In a recent poll from Yahoo! Finance and Ipsos, 57% of participants said their next car would likely not be electric.

While electric vehicle (EV) sales topped 1 million units for the first time in 2023, there was a slowdown in the second half of the year, and this slowdown continues today. High prices, lack of charging stations, and range anxiety are all factors that have consumers looking at other options.

Are electric vehicles the wave of the future? It depends on who you ask. Due to consumer concerns, many car manufacturers who have put their chips into the EV revolution are now shying away from the venture, focusing more on hybrids.

In an interview with ABC News last month, John Voelcker, a contributing editor at Car and Driver, said, “It may be difficult to get to 50% [of new EV sales] by 2030. We’ve moved beyond the early adopters now.”

At the end of the day, it’s the consumers who drive the market – and many have significant concerns about EVs, at least for now.


Expense and practicality of EVs called into question

A Yahoo Finance/Ipsos poll conducted in 2023 provides feedback on several aspects of the EV wave. When asked about the next vehicle purchase they make, around 31% of the respondents said that they were seriously considering an EV. Notably, 47% of the respondents with a college degree indicated they were much more likely to purchase an EV than respondents with a high school education or less.

Age and generational culture also play a part in EV interest, with 22% of baby boomers considering an EV compared to 40% of millennials. Gen X falls in the middle, with 33% interested in these vehicles.

Fuel prices are at least one factor affecting a person’s decision to purchase an EV. Of the respondents questioned, 49% said that fuel prices averaging $6 to $8 a gallon would increase the likelihood that they would purchase an electric vehicle. In comparison, 56% would be more likely if the fuel prices reached an average of $10 a gallon.


Lack of charging stations and overall costs among consumer concerns

Of the 1,025 respondents to the poll, 57% indicated that an EV purchase was likely not in their future. New or used did not make a difference. Only 31% of the respondents said they planned or were likely to buy an electric vehicle.

The participants who did not plan to purchase an EV cited the following concerns about EVs.

• 77% are concerned about a perceived or actual lack of charging stations

• 73% are worried about the vehicle’s driving range

• 70% are concerned about the overall costs of owning an EV

• 60% are worried about the impact of EV technology on the environment

Proponents of EVs have attempted to downplay these concerns in the media, but some consumer fears are true. Until buyers have enough information to ease those worries, EV technology will not likely catch on to the masses any time soon.


Owning and operating EVs is cost-prohibitive for many

Some costs associated with owning an EV may not immediately be apparent. What EV owners save on gas, their state loses in gas tax collections. To recoup this lost income, many states charge a higher licensing fee for EVs than those for registering the average gas-powered vehicle. For instance, registering an EV in Georgia costs an additional $213, while Ohio charges an extra $200 annually.

EV advocates argue that EVs are cheaper to maintain than their gas-powered cousins. However, that flips when the owner faces repairs. Data from Mitchell, a software platform company that works with collision repair shops and insurers, found that EVs cost $950 more on average to repair compared to traditional internal combustion engine vehicles. Part of the higher repair costs includes the special certifications required of mechanics who work or service EVs.

One common fear of potential EV owners is the cost of replacing the battery. Some estimate the cost to replace is anywhere from $4,000 to $20,000, depending on the make and model of the vehicle. The truth is replacing an EV battery is a relatively rare occurrence, and most car manufacturers offer extended warranties on the battery.

High insurance costs are an expense most EV owners don’t think about, but most owners don’t save money on car insurance by choosing an EV. Anthony Peretta, an Allstate agent in Philadelphia, Pennsylvania, quoted a 2023 Volvo XC90 Recharge Plus EV at $1,522 annually to insure, while the non-EV version costs $1,364, a difference of $158. This difference balloons to close to $1,000 for six years of ownership.

Current and upcoming laws in several states are also hitting the EV charging stations. Iowa, for example, is taxing EV charging stations $0.026 per kilowatt-hour while Montana charges $0.03 per kilowatt-hour. Utah taxes the EV charging stations based on their retail sales of electric current. These taxes will inevitably increase costs for EV owners as those tax hits trickle down.


Hybrids become the hail Mary as EV sales continue grinding down

As automakers feel the pinch of slow EV sales, many return to hybrid vehicles. These automobiles remove many people’s fears about EVs while providing better fuel economy than traditional vehicles. Carmakers benefit as hybrid SUVs and car sales fill the slowing EV sales gap. But while this solution is a compromise between both sides, consumers must remember that not all hybrids are worth it. Even though hybrid owners save money on gas, the higher purchase price, along with insurance and maintenance costs, can result in no savings over the long term.

Still, now is an excellent time for those who look to buy an electric vehicle. With slower sales, some dealers may be desperate to get them off their lots, allowing consumers to negotiate a car price and save significant money. To further reduce costs, those considering an EV should contact their insurance company to confirm the premium for the make and model they are looking at. Searching for an independent mechanic with knowledge of electric vehicles is also recommended to reduce repair and maintenance costs. Doing so can lead to a happy ownership experience.