Consumer Attitudes Shift Away From EVs, Toward Affordability

Car buying behavior is shifting in various ways.

But shopper attention to vehicle price, performance and quality are constants that continue to influence purchase decisions. That’s according to Deloitte’s “2024 Global Automotive Consumer Study.”

The business consultancy's 14^th annual report is based on analysis of survey results gathered from more than 27,000 consumers in 26 countries last fall.

The report particularly focuses on interest in electric-vehicle adoption but also explores vehicle-purchase intent, brand loyalty, connectivity and people’s interest in vehicle-subscription plans.

Price tops the list of factors motivating consumer vehicle choice in the U.S. (59%), Japan (58%) and Germany (55%).

Vehicle performance is top of mind in South Korea (55%) and China (53%). Product quality is of utmost interest in India (65%). 

Here are other study takeaways:

— EV momentum slows. In the U.S., intent to purchase an internal-combustion engine (ICE) vehicle is up nine percentage points (to 67%), while hybrid-electric and battery-electric vehicle (BEV) purchase intent has slowed, dropping four and one percentage points year-over-year (to 21% and 6%), respectively.

Globally, consumer interest in ICE vehicles also rebounded in Germany, Japan and South Korea (up 4% in each market). 

The sustained interest in traditional ICE vehicles telegraphs significant near-term challenges in the shift toward automotive electrification, Deloitte says.

Consumer interest in BEVs is highest in China (33%). Japanese consumers (41%) continue to show the highest preference toward hybrid and plug-in hybrid-electric vehicles (HEV/PHEV) (41%). 

Despite price cuts and government incentives, EV adoption faces a multitude of challenges, says Masa Hasegawa, Deloitte principal- global automotive, and strategy and operations practices.

“Some consumers are steering back towards ICE platforms,” Hasegawa says. “This presents a challenge for a wide variety of ecosystem stakeholders, including government regulators, that are making generational investments to achieve ambitious EV adoption targets on an aggressive timeline.” 

And while EVs are touted as a way to reduce carbon emissions, many consumers have less high-minded views on the subject:

A desire for lower fuel costs is the main reason consumers cite for choosing EVs in the U.S., Southeast Asia, South Korea, Japan and Germany.

Only in India is concern for the environment the top motivator for purchasing an EV. In China, it’s the driving experience. 

— Range anxiety is real. To consider a battery-electric vehicle as a viable option for their next vehicle, almost half (46%) of non-BEV intenders in the U.S. would expect a driving range of at least 400 miles (640 km) on a full charge.

Time required to charge has taken over as the top concern hindering EV adoption in the U.S. (50%), Japan (48%), South Korea (48%), Southeast Asia (45%), India (43%) and China (42%).

Regarding range limitations on today’s EVs, dealer executive Eric Frehsée, president of the Tamaroff Automotive Group in metro Detroit, says, “A lot of people don’t like to plan the use of their vehicle.”

— Price is a concern, regardless of a vehicle’s propulsion system. Amid economic uncertainty and high interest rates, affordability remains a major issue for U.S. car consumers. Most people expect to pay less than $50,000 for their next vehicle, whether it is an ICE (81%) or EV (74%) powertrain.

In the U.S., 59% of U.S. consumers surveyed cite price as a top consideration when selecting a vehicle brand.

— Less than half of consumers are brand-loyal. More than half (51%) of U.S. consumers say they are likely to switch automotive brands for their next vehicle purchase, according to the report.

More than 4 in 10 surveyed intend to leave their current brand family, citing as main motivators a desire to try something different, affordability and access to the latest features. 

“Brand loyalty has been flat for a long time,” says auto industry analyst Tom Libby.

Meanwhile, although interest in connectivity is growing, the Deloitte report says only 25% of U.S. consumers surveyed are willing to pay extra for connected services. Many car buyers have come to expect new vehicles as a way for brands to differentiate themselves in the market.

The study also says vehicle-subscription plans (as opposed to outright purchases) are of interest to consumers who are rethinking their financial commitments toward vehicle ownership.

Nearly 30% of U.S. consumers ages 18-34 are considering bypassing traditional vehicle ownership for a vehicle-subscription service, according to Deloitte.