Despite Hurdles, Vehicle Electrification in the US Is Likely Here to Stay, Finds Bloomberg Intelligence

Originally published on bloomberg.com

• The BI survey indicates that 42% of buyers likely to opt for EVs for their next purchase
• Charging obstacles and affordability remain the largest hurdles to incremental adoption of battery EVs, albeit temporarily
• BI expects US Battery EV penetration to reach 25% by 2030

NEW YORK, April 18, 2024 /3BL/ - Electric Vehicles (EVs) continue to pick up major traction in the US, with adoption continuing to accelerate even amidst growing challenges with charging infrastructure and overall affordability. A new survey from Bloomberg Intelligence (BI) found that despite these hurdles to growth, US battery electric vehicles (BEV) penetration is likely to reach 25% by the end of the decade.

The survey, conducted with 1,000 prospective auto purchasers, found that 42% of respondents were considering purchasing an electrified vehicle as their next car, with 23% opting for hybrid electric vehicles, in contrast to the current 7% penetration in hybrid electric vehicles. 9% of those surveyed favoring battery EVs, which is higher than the 7% battery EVs penetration last year.

BI’s research shows that prospective auto purchasers who already own an electrified vehicle are incredibly loyal to BEVs, with the report finding that 93% would stick with their current powertrain for their next purchase, compared to 34% of gasoline vehicle owners who are deciding to opt for an electric car. Fuel-type stickiness suggests that EV penetration is unlikely to reverse course as the benefits to an electric vehicle could continue to outweigh costs to current owners; and this continuous preference for EVs is consistent across HEV, PHEV, and BEV owner segments.

Steve Man, Global Lead Director for Auto & Industrial Market Research at Bloomberg Intelligence and the lead author of this report said: “We’re continuing to witness a profound penetration of BEVs in the US auto market, which promises to reach 25% by the end of this decade. Tesla, GM and Stellantis’ slew of affordable EV models, set for debut by 2026, may tap more mass-market buyers.  Despite this, the market still has a long way to go to mature, with charging network inadequacy, range anxiety and extended charging wait times topping the list of concerns for all car buyers. China, a country with a 23% BEV penetration, has an average charge point per BEV almost 5 times higher than the U.S., signaling a critical need for charging infrastructure development in the country to bolster the technology’s penetration in the US auto market.”

Tesla still maintains an 87% brand retention rate, outperforming two non-electric automakers at 67% with Lexus and 54% at Toyota. 81% of prospective Tesla buyers are new customers switching from competing EV brands compared to 42% of Nissan’s prospective buyers.

Traditional driving preferences and trust in technology is slowing down wide adoption of Advanced Driving Assistance Systems (ADAS). Close to 80% of potential users, who would opt out of autopilot technology, remain skeptical about the reliance and safety of self-driving systems. Consumer preference for the fun of driving and a sense of being in control also rank highly in resistance to ADAS.

BI’s survey on auto-buying intentions in United States was carried out on Mar. 18-25, using the Attest platform. The target audience of 1,000 adults was selected using criteria specified by BI to reflect a nationally representative sample of geography and gender. Respondents qualified if they were planning to buy or lease a brand new car in the next year. The survey’s confidence interval is 99% and margin of error 5%.

The full 2024 US Auto Electrification Survey will be available to Bloomberg Terminal subscribers who can access the report via {BI<GO>}.

Contact
Oktavia Catsaros
Bloomberg Intelligence
ocatsaros@bloomberg.net

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