According to the latest findings from McKinsey’s 2024 Global Automotive Consumer Survey, an increasing number of electric vehicle (EV) owners are considering switching back to gasoline vehicles.
Among EV owners surveyed in the United States, 46% indicated they might drive gasoline cars again. Globally, the survey of 30,000 respondents from 15 countries revealed that 29% of EV owners are considering switching back to gasoline vehicles.
Australia stood out on the global scale with 49% of respondents expressing a desire to return to gasoline vehicles, ranking the highest among all countries surveyed.
One of the main reasons cited by respondents for wanting to switch back to gasoline vehicles is the lack of public charging infrastructure. 35% of respondents mentioned that public charging facilities were “not good enough,” while 34% pointed to the high cost of EVs. Other disappointments with EVs included the inability to charge at home (24%), concerns and stress around charging (21%), changing travel patterns (16%), and an unsatisfactory driving experience (13%).
Overall, 21% of respondents globally stated they would never drive an EV, a figure unchanged from 2022. In contrast, 18% mentioned their next vehicle would be an EV, up from 16% in 2022.
29% of individuals expressed a desire to replace cars with other modes of transportation within the next 10 years citing high maintenance costs, a desire for a stable lifestyle, and remote work opportunities.
Similar trends have been observed in studies in the United States as well.
As per BloombergNEF’s “2024 Electric Vehicle Outlook,” growing concerns among consumers regarding the EV market have been noted. The report highlighted the tension in the U.S. EV market, attributed to the upcoming presidential election, leading to a deceleration in EV adoption this year. Forecasted data indicates that by 2027, only 29% of cars sold in the U.S. will be electric. Widespread concerns about mileage, pricing, battery life, and public charging infrastructure were identified in the EV market.
The White House aims for EVs to make up 56% of new car sales by 2032.
To boost EV sales, President Biden announced the strictest car tailpipe emission regulations in March, aiming to drive the automotive industry’s transition towards EVs. The new measures put restrictions on annual vehicle emissions, and carmakers failing to meet these new standards will face severe penalties.
However, despite efforts to promote EV sales in the U.S., infrastructure remains a significant challenge.
The landmark “2021 Infrastructure Investment and Jobs Act” authorized $7.5 billion for the construction of 500,000 public EV charging stations nationwide. The “Inflation Reduction Act” also raised tax breaks for EVs and charger installations, yet only eight public EV charging stations have been built so far.
Oregon Democratic Senator Jeff Merkley expressed dismay at the slow progress during a Senate Environment and Public Works Committee hearing on June 5, labeling the situation as a significant administrative error that needs addressing urgently.
Transportation Secretary Pete Buttigieg previously outlined a plan to build 500,000 charging stations by 2030.
Installing charging infrastructure now involves more than just planting a small device underground, Buttigieg emphasized during a CBS “Face the Nation” program in June, noting the electricity aspect as a new category of federal investments the administration has been working on in collaboration with 50 states.
When asked why only seven to eight charging stations have been completed, Buttigieg assured that 500,000 devices would be constructed over the next six years, with the first batch currently underway.
In early June, the Biden administration announced an additional $1.3 billion to expand EV charging facilities in urban and rural communities.
Gab Klein, Executive Director at the U.S. Federal Energy and Transportation Joint Office, emphasized the increased efforts in electrification for economic prosperity and national security, highlighting the urgent need for the U.S. to be a global leader in the industry.
Over the past year, stagnant consumer demand for EVs prompted automakers like General Motors, Ford, and Volkswagen to scale back or delay their EV plans.
As enthusiasm for EVs wanes, prices in the EV market have been on a downward trend, especially in the second-hand segment.
Data from iSeeCars shows that second-hand EVs are on average 8% cheaper than second-hand gasoline cars. Karl Brauer, Chief Analyst at iSeeCars, acknowledged the significant price drop in second-hand EVs over the past year, with prices decreasing by 30-40% since June last year, while average gasoline car prices only saw a 3-7% drop during the same period.
In January, Hertz revealed plans to sell 20,000 EVs, roughly one-third of its entire EV fleet, with some even priced at an average of $25,000, including second-hand Tesla vehicles.
This decision came three years after Hertz announced the creation of the largest North American EV rental fleet.
According to data from Edmunds, the cheapest new EVs currently available are the 2024 Nissan Leaf ($28,140 USD), 2024 Mini Electric Hardtop ($30,900 USD), and 2024 Tesla Model 3 ($38,990 USD).
The EV market is expected to stabilize in the coming years.
S&P Global Ratings predicts a 1-2% growth rate in EV demand from 2024 to 2026. A report from the company in April highlighted soft sales growth in March (equivalent to an annual sales volume of 15.5 million units), in line with forecasts. Higher car prices, sustained inflation, high-interest rates, and other macroeconomic factors impacting consumer purchasing power were cited as reasons for delayed consumption.