Electric vehicles take too long to pay for themselves - J D Power

ERJ staff report (DS)

Westlake Village, California - Automotive research company J D Power has launched a study of US consumers which measures satisfaction among electric vehicle owners.

The inaugural study explores the EV shopping and consideration experience as well as the ownership experience, and provides an analysis of the needs and expectations of current and future EV owners. The first conclusion is that Electric vehicles (EVs) will remain a very small part of the US market unless automakers can reduce prices and demonstrate the economic benefits to consumers.

Current EV owners most often cite environmental friendliness as the most important benefit of owning an EV. Nearly one-half (44 percent) of these owners indicate the top benefit of their vehicle is lower emissions, compared with emissions from gasoline- or diesel-powered vehicles.

However, consumers considering an EV for their next vehicle primarily want to reduce their fuel costs. While 11 percent of consumers would consider an EV for its environmental benefits, 45 percent want to reap the economic benefits of fuel savings. For example, current EV owners report an average monthly increase in their utility bill of just $18 to recharge their vehicle's battery--which is significantly less than the $147 that they would typically pay for gasoline during the same period of time.

Compared with sales prices for a similar gasoline-powered vehicle, the study finds that owners of all-electric vehicles (AEV) pay a premium of $10,000, on average, for their vehicle, while plug-in hybrid electric vehicle (PHEV) owners pay a $16,000 premium, on average. Based on annual fuel savings, it would take an average of 6.5 years for AEV owners to recoup the $10,000 premium they paid at the point of purchase, while the payoff point for PHEV ownership is 11 years.

"The payback period is longer than most consumers keep their vehicle," said Neal Oddes, senior director of the green practice at J.D. Power and Associates. "The bottom line is that the price has to come down, which requires a technological quantum leap to reduce the battery price.

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Press release from J D Power