Battery-electric vehicles may have more momentum in the U.S. than it looks at first glance.
Measured by market share, sales of BEVs accounted for less than 7% of total U.S. light-vehicle deliveries through November. But a new index J.D. Power officially will release next month suggests true market share is closer to four times that level.
The new J.D. Power EV Index uses surveys, vehicle registration and other internal and public data to examine six key areas around BEV adoption rates and roll that up into an overall Index number meant to signal how competitive BEVs are against traditional internal-combustion-engine vehicles.
Through October, the Index registered at 47 out of a possible 100 – with 100 meaning BEVs have reached full market parity with ICEs.
The Index has a number of surprises, including Chevrolet leapfrogging Tesla in brand consideration; the Chevy Bolt already boasting a lower cost of ownership than a comparable ICE vehicle – even without factoring in new tax incentives kicking in in January; and a significant climb in forecast overall U.S. market share for BEVs over the next three years.
To reach its monthly Index number, Power rolls up scores compiled from the six subcategories of Interest, Availability, Affordability, Adoption, Infrastructure and Experience. Although the top-line Index number isn’t expected to fluctuate much month-to-month, there likely will be shifts in the individual subcategories that will provide critical market insight to automakers, policymakers and others.
“There are so many variables that have interdependencies, and it affects the true transition from ICE to EV, and it affects the adoption rate,” Elizabeth Krear, vice president of the Electric Vehicle Practice at J.D. Power, says of the six factors tracked.
In scoring Interest (rated 30 out of 100 in the October report), Power surveys more than 2,000 potential buyers each month and monitors their online behavior to find out whether they are interested in purchasing BEVs. The data is collected down to the brand and buyer-profile level, revealing Chevrolet is now the most-considered BEV brand, with a score of 42.6 to Tesla’s 41.5.
“No wonder,” Krear says of Chevy’s move into the top spot. “They went from one BEV at the beginning of the year to five mass-market EVs by October, so that brand familiarity is fueling a new customer base.”
Also notable, she says, is that millennials – the biggest new-vehicle buying group – is three times more likely to purchase a BEV than older Baby Boomers.
In Availability (also a score of 30), Power looks at whether BEVs are available that meet vehicle buyer needs in terms of configuration and price. For instance, in Texas, pickups are popular, and because there aren’t enough viable BEV options in that segment, Availability scores are weak for the state.
The overall U.S. Availability rating is expected to more than double to 75 in 2025, Power says, when more than 80 models are expected to be on the market across multiple vehicle segments.
In Adoption (22), Power tracks how many buyers who have viable BEV options actually purchase one.
Here’s where, when viewed against Availability, BEVs are actually performing much better than their overall 7% market share. When looking solely at the segments in which current BEVs compete, BEV market share is more than 20%.
“This is one that took us a little time to get our heads around,” says Doug Betts, president of Power’s Automotive Div. “But EV share as a percent of the whole automotive industry is really meaningless. It implies something that is totally inaccurate.
“You have to want to buy an EV pretty badly to buy one that doesn’t work for your use case,” he says. “So that (overall 7% market share) number is not really suitable for understanding the willingness for people to buy an EV. It’s not suitable for planning purposes.”
To no surprise, California scores highest on Adoption (48.9). However, more unexpected is that among the top 10 ranked states, only half have California-like strict zero-emissions-vehicle regulations on the books. And the top 10 is split evenly between warm- and cold-weather states, indicating neither of those things plays a critical role in whether consumers purchase BEVs.
Taking Adoption and Availability into account, Power says overall BEV retail market share will jump to 12% in 2023 and 21% by 2025, a forecast it calls its middle-of-the-road projection, meaning growth could come even faster.
“We’ll watch that,” Krear says. When the Inflation Reduction Act that incentivizes BEV sales kicks in in January, “we may see some trending (upward).”
In measuring Infrastructure (28 in October) down to a market ZIP-code level, Power focuses on charging-demand growth, charger reliability and consumer satisfaction with the public charging experience, the last of which it says is at an all-time low.
“One in five EV owners who attempt to charge are unable to do so,” says Brent Gruber, executive director for global automotive. “Reliability is an issue. And no charging network is building infrastructure fast enough to keep up with growing demand.”
There’s also a critical gap in infrastructure in states where pickups are popular. With more electric pickups on the verge of becoming available, the lack of public charging could be an issue that turns some potential buyers away in those markets.
Also factoring into the overall Index score are Affordability (86), which looks at overall ownership costs compared with ICE vehicles, down to the model level; and Experience (89), which compares BEV owner satisfaction to ICE vehicle owner satisfaction.
Power sees the customers for this Index ranging from automakers and Tier 1 suppliers to government agencies, utilities and large dealer groups.
The Index officially launches Jan. 17.
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