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IU study: Consumer intent to purchase electric vehicles is low, varies by city

December 27, 2012
Bloomington, Indiana --

A study from the Indiana University School of Public and Environmental Affairs casts doubt on the Obama administration's goal of putting a million plug-in electric vehicles on the roads by 2015. But the study does find that consumers are more receptive to buying electric cars in some cities, including San Jose/San Francisco, Chicago and Boston.

The researchers surveyed more than 2,300 adult drivers in 21 large U.S. cities in the fall of 2011. They found that the perceived drawbacks of electric vehicles outweigh the advantages for most consumers. The primary drawbacks are the limited driving range, the vehicles' high sales or lease price and the inconvenience of recharging batteries.

John Graham"Although many engineers, environmentalists and politicians are enthusiastic about electric vehicle technology, this survey reveals that new car buyers, based on early impressions, have little interest in purchasing plug-in vehicles," said John D. Graham, dean of the School of Public and Environmental Affairs and a co-author of the study.

The findings were published online by the journal Transportation Research Part D: Transport and Environment, in advance of its January 2013 issue. Sanya Carley, assistant professor in SPEA, is the lead author. Other co-authors are Rachel Krause and Bradley Lane of the University of Texas at El Paso.

While plug-in electric vehicles provide considerable fuel savings, those weren't enough to offset the perceived disadvantages, the study found. Graham said new-car buyers typically keep their vehicles only three to five years, not long enough for fuel savings to make up for the premium purchase price. Car buyers also typically do not consider the costs of operation and upkeep but tend to focus more heavily instead on the sticker price of the car.

The survey found the early adopters who are likely to buy plug-in electric vehicles are predominantly highly educated, male, concerned about the environment and worried about American dependence on foreign oil. They are also more likely to have previously owned a hybrid vehicle.

"Those interested in electric vehicles at this time are attracted to the environmental imaging associated with electric vehicles and are typically technology pioneers," Carley said. "It's helpful to know this information, because it can help manufacturers identify their early car-buying population, and it also reveals which consumer types are not being reached by current marketing campaigns."

Sanya CarleyThe challenge for manufacturers, the authors note, is to figure out how to market the vehicles to mainstream car buyers, not just the early adopters. This may require providing more information about fuel savings as well as addressing concerns about driving range, price and convenience.

Concerns about plug-in electric vehicles' limited driving range, so-called "range anxiety," helps explain another finding: Consumers are somewhat more interested in buying hybrid electric vehicles, with a gasoline-powered backup engine, than electric-only vehicles. This suggests there may be better market potential for hybrids like the Chevy Volt, Toyota Plug-In Prius and Ford C-Max Energi Plug-In.

Graham said vehicle manufacturers and suppliers are making progress in addressing the negatives associated with electric vehicles. Prices have come down for the Volt and the Nissan Leaf, and lease arrangements have been made more attractive. Second-generation plug-in vehicles are expected to have shorter charging times and the capacity to be driven farther without re-charging. Building more charging stations and concentrating them in areas where they can be easily seen could also help alleviate worries that an electric vehicle would leave drivers stuck with a run-down battery.

"Policy makers also need to develop more realistic expectations about the pace of market acceptance of plug-in technology," Graham said, "and they may need to retain policy incentives for plug-in vehicle purchases longer than they originally anticipated would be necessary." For example, President Barack Obama has proposed increasing the federal income tax credit for buying a plug-in vehicle and making it effective at the time of purchase rather than the end of the tax year.

The authors said one of the more interesting findings in the study was the city-by-city variation in intent to purchase an electric vehicle, suggesting car companies might target their sales and marketing efforts. The interest of survey respondents in buying a plug-in electric vehicle was rated on a 10-point scale; the average score was 2.67. Cities with the highest intent-to-purchase ratings were:

  • San Jose/San Francisco -- 3.72
  • Chicago -- 3.25
  • Boston -- 3.03
  • Seattle -- 3.02
  • Los Angeles -- 3.01
Cities with the lowest ratings were:
  • Dallas/Fort Worth -- 2.17
  • San Antonio -- 2.21
  • Indianapolis -- 2.21
  • Detroit -- 2.24
  • Nashville -- 2.36
To learn more, view this complete list of cities included in the survey and their intent-to-purchase ratings.

To speak with Carley or Graham, contact Jim Hanchett at the IU School of Public and Environmental Affairs, 812-856-5490 or jimhanch@indiana.edu.