In recent times, more or less every automotive manufacturer is investing heavily, and aggressively, into developing electric vehicles. While EVs are widely touted as the future of mobility, consumer studies keep popping up now and then to highlight some glaring flaws in this blind approach towards electric mobility.
A recent study by S&P Global Mobility shows that many EV owners do not exclusively remain tied to EVs through their vehicle usage, hinting at a potential EV loyalty problem. Yes. According to the figures collected, collectively, the overall loyalty by fuel type for EVs among luxury and mainstream brands has soared over the past three years. But remove Tesla’s industry-leading loyalty numbers from this, and things start to go pear-shaped for the rest of the industry – nearly half of the non-Tesla EV households that have acquired a new electric vehicle still end up purchasing an internal combustion car as their next vehicle.
The study reveals that the fuel type loyalty rate for mainstream brand EV households sat at 52.1% through July this year. However, S&P Mobility has made it clear that this observation does not mean that every 48 out of those 100 EVs was replaced by an ICE car. The latter could be a replacement for any other vehicle in a given household, and not necessarily for that EV.
One key part of the loyalty struggle can be attributed to a decrease in the willingness to purchase an EV. A survey by S&P Global Mobility found that a consumer’s consideration for purchasing an EV went down to 52% from a reasonably high 81% in 2021. Age-old pain points like EV pricing, charging infrastructure, and driving range were the top three reasons consumers listed for not purchasing an EV.
Compared to mainstream EV brands, loyalty results for the luxury EV space emerged with better figures. As per the study, the EV loyalty rate across the luxury segment remained above 70% for the past three quarters and above 60% for the past 18 months. But again, removing Tesla’s figures from the equation and looking at individual brand figures shows a worrying trend. While a few non-Tesla luxury brands like Jaguar, Mercedes-Benz, and Audi have managed to improve their EV loyalty rate, others like BMW have seen a marginal decline or very minimal improvement in some cases.
‘The OEMs are spending huge amounts of money to develop EVs,’ said Tom Libby, Associate Director for Loyalty Solutions and Industry Analysis at S&P Global Mobility. ‘So the last thing they want is an EV owner going back to ICE.’
While Libby’s statement highlights the main problem, it’s worth mentioning that the sheer utility of ICE vehicles is not lost on car buyers. While EVs offer an alternative, their degree of effectiveness and operational ease compared to ICE vehicles is still debatable.