The Not-So-Surprising Truth About Who is Buying Electric Cars

AutoGuide.com News Staff
by AutoGuide.com News Staff

Electric vehicles (EVs) have seen a remarkable surge in popularity in recent years, with their market share growing steadily. According to the JD Power E-Vision Intelligence Report, EVs now account for 8.4% of the retail new-vehicle purchase and lease market. However, beneath this promising growth lies a stark reality: electric cars continue to be something only the wealthy can afford. The report highlights that a significant 76% of EV sales occur in the luxury market, with affordability being a key factor. Let's delve into the data and explore why electric cars remain out of reach for the average consumer.

Premium Brands vs. Mass Market Brands

JD Power's data reveals a staggering difference in the cost of ownership between premium brand EVs and mass-market brand EVs. In the compact SUV segment, which is the highest volume retail sales segment in the United States, premium brand EV buyers are paying just 0.4% more for an EV than a comparable internal combustion engine (ICE) vehicle. On the other hand, mass-market brand buyers are shelling out 18.0% more to own an EV over a five-year period.


To put this in perspective, the average five-year total cost of ownership for a premium compact EV SUV is $71,707, only $287 higher than the ICE counterpart. In stark contrast, the average five-year cost for a mass-market compact EV SUV is $60,736, a whopping $9,259 more than a comparable ICE vehicle.


Model-Level Comparisons

The disparity becomes even more evident when we delve into specific model-level comparisons. For example, the Mercedes-Benz EQB, the most affordable EV in the compact premium SUV segment, has an average five-year cost of ownership of $72,107. Its ICE counterpart comes in at $71,420 over the same period, a difference of just $687.


In contrast, the Ford Mustang Mach-E, which is the least affordable EV in the mass-market compact SUV segment, has a five-year total cost of ownership of $67,719. However, the average five-year total cost of ownership for its ICE competitors is $51,477, a staggering difference of $16,242.

Leasing Costs Amplify the Divide

Leasing costs further amplify the disparity between luxury and mass-market EVs. When comparing the Mercedes-Benz EQB and the Ford Mustang Mach-E, the EQB is $2,899 cheaper overall than the Mach-E on a three-year lease. However, in August, Ford began passing through the full federal tax credit of $7,500 to Mustang Mach-E lessees, potentially bringing three-year lease costs below those of the EQB.


New Mass Market Entrants: A Glimmer of Hope

Amidst the stark divide in EV affordability, there is a glimmer of hope with new mass-market entrants. While the average new vehicles in the compact SUV segment are priced significantly higher than their ICE counterparts, there are exceptions. The new Chevrolet Equinox EV, for instance, is projected to be introduced at the lower end of the price curve, making it more accessible to consumers and aligning it with comparable ICE compact SUVs.


Conclusion

The JD Power E-Vision Intelligence Report paints a clear picture: electric cars remain predominantly a luxury market phenomenon. While EVs have gained ground in recent years, the exorbitant cost of mass-market brand EVs compared to their ICE counterparts is a significant barrier for many consumers. The data suggests that manufacturers need to bridge this affordability gap to tap into the mass market segment and bring EVs within the reach of a broader range of consumers. Only then can EVs truly become a mainstream choice for the average car buyer, and the transition to a greener future can gain momentum.

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This article was co-written using AI and was then heavily edited and optimized by our editorial team.

AutoGuide.com News Staff
AutoGuide.com News Staff

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  • Jerry & Lynn Jerry & Lynn on Oct 07, 2023

    Do your cost figures take into account government rebates?

  • Pbug56 Pbug56 on Oct 08, 2023

    Some fleets whose daily mileage is low by EV's. Many of the others who do just don't understand the horrible damage to the environment from mining the materials needed; manufacturer's next target is the floor of the Pacific Ocean, with no limit to the amount of damage they will do. Also, that solar works, on average year round, a few hours per day, wind is also intermittent, so that most power for EV's comes fossil fuels including very dirty soft coal. They also may not understand what happens if you take a road trip and, when running low, pull into say, a truckstop, only to discover that none of the chargers there if any actually work. And if you live in an area like I do, near NYC, one bad storm and you have no power for weeks if not longer, plus the grid and power plant capacity can't handle it.

    • David David on Oct 09, 2023

      I get what you're saying about the mining and the like. North America and Europe aren't exposed to what it takes to mine the goodies required to make the batteries. But, that will change as demand increases. Canada sits on a lot of lithium. Mining is going to open up not far from Winnipeg, MB. It will be interesting to see how the environmentalists weigh tearing up the Earth in order to satisfy their zeal to have vehicles go all electric. We do know that environmentalists are okay with slaughtering birds with wind farms. Wind farms are part of their narrative, dead birds are just in the way.


      Now, as to your concerns about losing power. Electricity is required to run gas/diesel pumps. Power goes out and unless you have a couple dozen gas cans filled, you won't be any better off than the EV owners.


      Charging stations; Tesla, read, Musk, had the foresight to know that charging stations are critical to Tesla's success. As it is today, you can go from Miami to Seattle and not worry about finding a Tesla charging station, as long as you don't wander off into the boonies. Further, more and more auto companies are switching to the Tesla charging system....Musk is going to make even more money with licensing fees. Smart man.


      But, all things aren't rosy for the future EV buyer. Inner city parking that depends on street level parking whether on the street, parking garages, or parking lots will be a problem. Then there's people that own homes or rent that park on the street. The bullet point that EV owners pride themselves in is home charging and it's a good one...unless you live where you're forced to park on the street or in a parking garage. 120V is quite slow. Add to that all the extension cords that will be snaked around, it will be a nightmare. I can see the delinquents doing a Tik Tok challenge; gather up all the extension cords that you can and post them online to show what kind of idiot you are. :-)


      At some point, the government will stop giving EV tax breaks so the purchase price will rise. And, at some point, the government will stop giving away carbon credits to those engaging in 'green technology'. Tesla has made around 2 BILLION DOLLARS selling their free from the government carbon credits. And, as gasoline/diesel is used less and less, the government will find ways to tax EV owners more and more. The government will NEVER do with less.


      So, there's a lot of stuff the EV fan base leaves out when pros and cons are discussed. Thankfully, I have no desire to own one and considering my age, I'll have assumed room temperature before EVs are the norm.



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