The automotive industry is currently in the midst of a major revolution as the number of electric vehicles on the road steadily increases. Rising electric vehicle adoption has led to a shift in consumer behavior, meaning automakers and car dealerships that wish to succeed will have to evolve their sales, marketing and customer experiences. So how exactly is EV adoption affecting consumer behavior?
For starters, plenty of drivers are no longer checking how many miles per gallon a car can travel or looking for sports packages. They are instead researching EV battery range, referring to how far a vehicle can travel on a single charge, the availability of reliable public charging networks, and the functionality of EV technology. In short, the factors that drivers usually considered when buying cars have changed dramatically.
This, in turn, has had a significant impact on purchasing behaviors that is shaking up the automotive industry. Unlike before, drivers are more conscious of the need for clean energy in the transportation sector. Furthermore, the rise of the EV industry, which has fought against using the conventional car dealership model, has increased the distaste and general distrust of the car-dealership experience.
Drivers are now more concerned about range, with more than 50% reporting that they feared running out of charge while on the road. Insufficient public charging infrastructure, coupled with faulty charging stations, has exacerbated range anxiety among drivers. The Fuel Institute estimates that most EV drivers now charge their cars at home overnight.
According to a New York Times article, Millennials are two times more likely to look for and buy a car online, signifying a major shift in car purchasing behavior. Millennials would like a system that offers more transparency regarding prices and a faster, less-complicated purchasing process. They don’t want to have to deal with sales pitches and long, convoluted processes when they buy their cars, and the online EV shopping experience offers that.
Automakers such as Tesla that have adopted an online purchasing model, are much more likely to attract these kinds of buyers and outcompete other carmakers. And as electric vehicles become more affordable, we can expect shifts in the demographic of buyers that are more likely to purchase EVs. Studies have shown that for the past decade, the electric vehicle market has been mainly filled with males aged 40 to 55 years with a yearly household income of more than $100,000.
More affordable EVs will result in a change in this demographic, with more millennials being able to purchase electric vehicles because they become more affordable, available, and familiar. Firms like Lucid Motors (NASDAQ: LCID) have their work cut out to tweak how they communicate with current and future customers in order to deepen EV penetration.
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