Why millions of Americans aren't buying electric vehicles

By ValuePengiun
Part of the LendingTree Group

(March 16, 2023) From a rise in affordable options to Tesla's recent recall, electric vehicles (EVs) have been making headlines lately. But despite the stir, many Americans aren't ready to make the switch — and price is a particular concern. ValuePenguin asked more than 2,000 U.S. consumers about their attitudes toward EVs. In addition to going over consumers' top reservations, stick around for tips on deciding whether to make the switch — including how going electric may affect your auto insurance rates.

Key findings

    •    Despite a federal initiative to have electric vehicles (EVs) account for at least 50% of new car sales by 2030, many Americans aren't ready to convert. Although tax breaks could help with the overall cost, 36% of Americans say their major concern is price — this is followed by a lack of charging stations (24%) and driving range (12%).
    With the average price of an EV at $58,725, income level could be a major barrier to ownership. Americans making less than $35,000 are 43% more likely to cite price as a deterrent than those in households making at least $100,000.

    •    Cost aside, safety fears could be driving the hesitation. As more EV manufacturers offer automated driving features, 40% of Americans say a driverless automobile would make them feel much less safe on the road and 45% say these vehicles pose a tremendous risk to pedestrians. Even with the distrust in autonomous technology, though, Americans still hold human operators responsible: 53% say the driver is at fault if they get in an accident even if the car is being controlled by self-driving tech.

    •    Despite a 65% jump in EV sales in 2022, cost, accessibility and trust could be why 79% of Americans are primarily driving gas cars. You'll find more baby boomers at the pump than any other generation — 87% are driving traditional vehicles, followed by 84% of Gen Xers. Gen Zers are the most likely generation to drive an electric vehicle (whether purely electric, hybrid or plug-in hybrid), but they're also the most likely to report they don't drive or don't primarily use the same vehicle.

    •    Perhaps considering the impact vehicles have on climate change, Americans' affinity to purchase an EV in the future could be closely aligned with their political views. 22% of Democrats will consider the environment for a future vehicle purchase, compared with 6% of Republicans. In general, the biggest decision makers for vehicle purchases come down to cost (65%), fuel efficiency (56%) and size (42%).

Not all consumers are ready to go electric — here's what they're worried about

Although the U.S. government is ready to switch to EVs, many consumers aren't quite there. To help meet the federal goal of converting 50% of new car sales to electric vehicles by 2030, several initiatives have been introduced, including tax credits of up to $7,500.

Despite this, 36% of Americans say price is their major concern when considering EVs — the most common roadblock. Given the price of EVs, that's understandable. New EVs cost an average of $58,725 in January 2023, according to Kelley Blue Book estimates. While that's down 7.1% from a year ago (a notable achievement given that the average cost of all new cars has risen 5.9% in the same time), that cost may not be low enough for some consumers.

That's particularly true of low-earning Americans. While 40% of consumers making less than $35,000 cite cost as a top worry for EVs, just 28% of six-figure earners express similar concerns. That means low earners are 43% more likely to worry about the price tag the most.

ValuePenguin insurance expert Divya Sangameshwar says these concerns are warranted. "Americans aren't ready for widespread EV adoption," she says. "It comes down to the complicated math behind EV ownership. EV proponents argue that EVs are cheaper because they're cheaper to fuel and maintain — especially when gas prices are high. But the premium pricing of EVs leads to a very understandable hesitancy to buy one."

Following cost, a lack of charging stations (24%) and driving range (12%) are the top deterrents for consumers. Consumers with a master's degree (31%) and six-figure earners (28%) are particularly likely to cite charging station concerns. Meanwhile, men are much more likely to worry about a lack of driving range than women — 16% versus 8%, respectively.

While Sangameshwar understands these concerns, she believes the EV industry is rapidly changing — and many Americans aren't keeping up with the latest technology.

While there are about 47,200 publicly accessible EV charging stations in the U.S., according to an IEA analysis, President Joe Biden said during his 2023 State of the Union address that the country would build 500,000 EV charging stations.

"EVs have also shifted from first-generation models that barely ran for 100 miles on a charge to new and updated offerings that are now approaching 500 miles per charge," Sangameshwar says.

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Launched in 2013, ValuePenguin is a free online source for financial information and tools that help people make informed decisions about how to spend their money. Its focus categories include credit cards, auto insurance, banks and credit unions.