Record sales for electric vehicles but knowledge gaps remain
Consumers’ interest in electric vehicles is growing, and they’re willing to pay a premium, but few brands have built strong associations in this area.
Electric car sales in the UK are booming. Around 190,000 were sold in 2021, despite the well publicised issues around global supply chains. The Society of Motor Manufacturers and Traders (SMMT) annual sales report for 2021 showed that more battery electric cars were registered in 2021 than in the years 2016-2020 combined.
With sales of fuel-powered cars stalling, battery electric cars accounted for about 12% of total sales last year. With the drive towards net-zero carbon emissions, this is a sector that will continue to grow, with a predicted global market value of $2,495bn by 2027 according to Meticulous Research.
In light of this growing sector, Teads partnered with Kantar to research the consumer trends driving these purchases, and to shed light on the electric vehicle audience. Our research found that almost one third of electric vehicle intenders (those considering a hybrid or plug-in electric car for their next vehicle) are under 35 years old. By comparison, under-35s’ intention for fuel powered cars is only just above one in 10.
It suggests that those newer to the autos market are more willing to try out new technologies or make their first purchase of an electric vehicle.
Key purchase drivers
So, what are the key factors for buying or leasing an electric vehicle? Unsurprisingly, environmental concerns are the biggest driver. The race to lower carbon emissions has been well-documented, and the climate emergency has been given more airtime than ever before. With brands and consumers aiming for a more sustainable future, it’s not surprising that owning a car with lower carbon emissions has become desirable for many.
But environmental concerns are not the only reasons people give for wanting an electric vehicle; intenders also cited the benefits of fuel and cost savings. These factors are so appealing that electric vehicle intenders are willing to pay more for a new car than they might for a conventionally fuelled equivalent. Over two thirds are willing to pay up to a 10% premium for their electric vehicle.
However half of electric vehicle intenders are still concerned about battery life (or ‘range’) and nearly a third also cite a lack of knowledge as a potential blocker for making a purchase, with 32% saying they don’t understand the full benefits of purchasing an electric car.
There is also an association gap between car manufacturers and electric vehicle production, with only a handful of brands associated with plug-in electric vehicles. Tesla was well ahead in our survey, with 48% associating them with plug-in electric vehicles, more than double the score of second-place Nissan with just 21%.
Brands clearly have a key role to play in educating consumers about the benefits of electric vehicles, and laying to rest some of the fears consumers have relating to battery life and charging points. Brands also need to invest in building their association with electric vehicles, to stay relevant and to capitalise on the opportunity. If done successfully, there are great rewards to be had; last year saw Tesla’s Model 3 becoming the first electric car to rank in the SMMT’s top 10 for overall sales – coming in second behind the Vauxhall Corsa.
Brands’ digital presences provide a great opportunity to engage with consumers: 51% of first-time electric vehicle buyers said a brand’s website had increased in importance during the pandemic for researching their purchasing decisions. When starting the process, UK automotive consumers are most likely to visit the brand website before contacting the dealer. The importance of brand’s digital presence has increased as a result of Covid, with 51% of electric vehicle intenders saying they are interested in going through the entire leasing or purchasing process online.
Consumers’ information sources
Brands should make the most of this digital opportunity and push consumers to their sites, to increase awareness of their models and features. They can also use this opportunity to educate potential buyers about the benefits of electric vehicles, while allaying potential concerns.
When brands communicate with potential electric vehicle owners, our research showed that consumers place higher importance on having the latest technology in their car, compared to those intending to buy conventionally fuelled cars. But, in many ways, the core needs are not that different from other fuel types, with driving performance, brand reputation and appearance scoring highly for influencing the decision-making process.
The drive to get more electric vehicles on our roads is set to continue this year. Last year’s record sales were still achieved despite the global supply chain issues that affected car manufacturing. In a follow-up survey, we found that 82% of UK automotive intenders were aware of chip shortages and their impact on purchases. As global supply chains recover that will be one less bump in the road for future electric vehicle owners to overcome.
The clock is ticking for car manufacturers to build their association with electric vehicles, as there is now less than eight years until the UK government is planning to phase out the sale of petrol and diesel cars, to help achieve the UK’s commitment of a net zero carbon economy by 2050.