BEV Buyers Buck Brand Loyalty

A survey looking at the reasons car buyers are defecting from their current brands in the U.S., Germany, Japan and China may shed light on what automakers are getting wrong in their product development and design efforts.

Japanese technology company Asahi Kasei asked owners in the four major automotive markets about brand loyalty and key motivators for buying battery-electric vehicles, versus internal-combustion-engine vehicles.

More than half of the respondents in Germany and the U.S. say their next car will be a different brand. Customers in China are remarkably open to switching car brands, with 79% indicating they would choose a model from a different manufacturer. Looking at different age groups, Generation Z-respondents (born between 1995 and 2010) in all four regions showed the lowest degree of brand loyalty, indicating that the younger the car users are, the less connected they feel to a certain brand.

When asked about the most annoying factors in their current car, car users in all four regions cited “poor gas mileage/fuel consumption,” “not enough storage space” and “too much noise while driving.” This was also reflected in the main motivation to change brands, with a third of respondents in Germany and the U.S. citing “quality aspects” as an important factor.

As the global auto industry works to transition from ICE vehicles to BEVs, results of the survey show that the growth of battery-electrics, plug-in hybrids and hybrids answer consumers’ desire for more economical driving, but they still demand traditional amenities and features they have valued in ICE vehicles.

Since the first survey was conducted in 2020, fuel/power efficiency and operating costs have been the most influential factors in the buying process. This can be attributed to the rising cost of new vehicles and wage rates that have not kept up with those rising prices. Consumers, especially in the U.S. are taking out increasingly longer loans to make monthly payments affordable, but they are wanting more affordable operating costs to help offset the higher sticker prices.

There are government mandates and incentives in all four regions to buy BEVs. Compared with the survey’s results in 2020, though, as well as the influx of new choices, the “willingness to buy” a BEV for their next purchase has not grown on pace with government goals.

“Willingness to buy” rose by 6 percentage points in China and 8 percentage points in Germany, but that metric dropped 14 percentage points in the U.S. The fade-out of governmental subsidies and the high cost of electric vehicles, relative to their ICE counterparts, are key factors in this consumer sentiment at the end of 2023, say the survey’s authors.

The main drivers for switching to a BEV differ among the regions: while driving range is the major factor for car users in Germany, 34% of the respondents in the U.S. prioritize battery lifetime. There is considerable noise in the U.S. media about how long a BEV battery pack will last, and how expensive it could be to replace, despite the U.S. government mandate that automakers must back the battery pack for a minimum of 10 years.

Price is hardly to be dismissed as an impactful consideration for a BEV purchase. General Motors, Ford and Hyundai all saw BEV sales jump in the second quarter after laying generous lease incentives on consumers. GM’s BEV sales jumped 40% compared with the first quarter. Ford's BEV sales surged 61% in the second quarter compared to the same period in 2023.

According to the International Energy Agency, global EV sales are expected to reach 16.6 million vehicles this year, up from 13.7 million in 2023. EV sales will continue, but like ICE vehicles, the market share will go to the companies that listen best to what consumers want.