Published on December 3rd, 2013 | by Zachary Shahan5
3 Reasons Why Navigant’s $26,000 EV Demand Finding Should Be Taken With Half A Grain Of Salt
As you may recall, I reported a few days ago on a new Navigant Research white paper about electric vehicle consumer interest and awareness. The big finding, in my opinion, was what I stuck in the title of my article: only 22% of Americans know about the Tesla Model S, and only 31% are “familiar with” the Nissan Leaf. There were some other fairly interesting findings, and I did share some of them, including ones about the $26,000 EV price point option that has garnered the majority of headlines.
But, frankly, findings regarding that $26,000 price point and related matters need to be taken with a grain of salt… no, half a grain of salt. Below are three reasons why I think Navigant’s $26,000 EV finding is not all that sound of a finding.
1. People Don’t Know What They’re Talking About
Let me reiterate: fewer than ⅓ of the respondents could name the highest-selling pure electric vehicle on the market, the Nissan Leaf; and fewer than ¼ could name what is widely considered the best mass-manufactured car (of any type) on the market, the Tesla Model S. Furthermore, many respondents named conventional hybrid electric vehicles or gasmobiles when asked to name electric cars. In other words, the large majority of the respondents knew close to nothing about electric cars. And, if they didn’t really know anything about electric cars, how could they say at what price point they’d like to buy one?
2. Not On The Market For A Car
Contrary to how many auto surveys are conducted, this survey included people who were not on the market for a car. Furthermore, a considerable number of the participants seldom drove at all. 7% of respondents said that they do not own a vehicle, while 12% said that they owned a vehicle but did not drive on a regular basis. To what extent can answers from such people regarding vehicle price and purchasing of a vehicle be useful?
Undoubtedly some in-the-market shoppers would agree they want to pay less, but is it safe to say that people who aren’t in the market, or don’t own cars, or don’t regularly drive could affect the results of a car shopping survey?
If they express expectations about price, to what degree would they be unreasonable expectations? If $25,000 is too high to some respondents, might they also say many gas and diesel cars also cost too much, given the average new car price is hovering around $31,000?
3. Do Electric Car Purchases = 15% Of Car Purchases?
39% of respondents noted that they’d be very interested or extremely interested in buying a battery-electric vehicle with the following characteristics:
- Electricity cost equivalent of $0.75 per gallon
- Driving range of 100 miles on a single charge
- You could plug in the vehicle to charge at your home each night
- Additional charging stations may be available around town
- A price of $26,000 after any purchase incentives
The Nissan Leaf costs just $21,300 after the federal tax credit. Its driving range is 73 miles on a single charge. The other assumptions are nothing special. Even if we remember that only 31% of the respondents were supposedly familiar with the Nissan Leaf, if we project that 50% of an “aware” population should be buying the car (based on 39% being very or extremely interested and another 36% being somewhat interested / somewhat disinterested), that means that about 15% of the US population should be buying the Nissan Leaf, Chevy Spark EV, or some similar electric car. The Nissan Leaf accounted for about 0.0017% of US auto sales in October. That’s a far cry from 15%, or even 10%, or even 1%!
Of course, there are various other factors to take into account here, but I think it’s clear that we can’t take these findings too seriously. The overall points are that most people are clueless about the existence of electric cars and their benefits, but a good proportion of the population likes the idea of electric cars from a first glance at the numbers. And maybe all those people who said they were familiar with the Nissan Leaf and other EVs actually aren’t familiar with them. Or maybe they’re just around the corner from buying an EV? (I’m skeptical, even though I do think electric cars are much more enjoyable to drive and have many other benefits, as well.)
Obviously, I wrote about the $26,000 response in my first article because I thought there were some interesting things to note about it. However, with such surveys, it’s important for people to get the context and learn more about the respondents answering the questions. If someone asked me a bunch of questions about a technology I don’t really know anything about, I hope anyone looking at the results would take them with no more than half a grain of salt.