By Alysha Webb, Editor and Publisher
Low gas prices are the death knell for electric vehicle sales, right? Not necessarily. Sales of EVs are slowing as gas prices stay low, but a survey by the Consumer Federation of America found many consumers are interested in buying electric vehicles in the future. That means it would be unwise for dealers to dismiss EVs as potential growth segment. However, converting consumer interest into actual purchases requires some work by both auto manufacturers and dealers to educate consumers about electric vehicles.
“There is no question that electric vehicles are poised to become the next big thing in the automotive space,” says Jack Gillis, director of public affairs at the Consumer Federation of America.
The non-profit Federation recently surveyed consumers about their knowledge and attitudes toward electric vehicles – which included plug-in electric and plug-in hybrid electric vehicles. It was surprising to find that though EV sales currently account for a tiny percentage of all cars sold in the U.S., some 31 percent of those surveyed said they will consider buying an EV for their next car purchase.
Given that such EV sales are still such a small percentage of total new car sales, “the 31 percent was phenomenal to us,” says Dr. Mark Cooper, the Federation’s director of research.
In the first ten months of 2015, 92,347 plug-in electric vehicles were sold in the U.S., according to insideevs.com, compared to 100,364 units in the same time period in 2014. Total light vehicle sales in the first ten months of 2015 topped 14.4 million units.
Not surprisingly, interest in buying an EV increased along with knowledge about the technology, says Cooper. The more consumers know about EVs, the more positive they feel about them, he says. Consumers who feel positively about electric vehicles – and 54 percent of those surveyed did feel positive about EVs – are more likely to consider buying one. That means more education should equate to more EV sales.
“From a demand side, given the early stage of EV development and deployment, this is quite positive,” says Cooper.
Consumers interested in buying an EV already have a wide variety of choices, with 12 automakers producing 18 different models, says Gillis. That is a greater number of models than were offered at the same stage in the hybrid process.
One of its missions is to educate consumers, and the Federation has put out an online Snapshot Guide to Electric Vehicles to help consumers sort through the choices.
But what is really needed is more mainstream marketing, says Gillis. Auto manufacturers should throw more market muscle behind their EV models, he says, because “there is a tremendous opportunity for sellers to take advantage of the EV market.”
Extended test drives and HOV lane access
At the dealership level, training is crucial. Dealership sales people who know more about the EVs they are selling are able to sell more. One of the biggest barriers to purchasing an EV, for example, is “range anxiety” – fear of running out of electric fuel.
“As consumers are in the showroom and they express range anxiety, it is important for dealers to let consumers know most of us would be fine with even the shortest range,” Gillis tells Automotive Buy Sell Report.
Santa Monica BMW takes that to heart. Peter Rangar, the dealership’s internet director, tells Automotive Buy Sell Report that a lot of its employees – including himself – actually own an i3, BMW’s pure electric vehicle. That helps a lot when they are talking to potential buyers, he says.
BMW encourages customers to take an extended test drive, and allows them to drive the car for up to three days at no charge. If they are concerned about the EV – which has up to an 80 mile all-electric range – meeting their driving needs, “they can get those issues answered,” said Rangar. When they return after the test drive, “we can have a two-way conversation,” he said.
BMW offers a battery-only model or one with a range-extender, a gas-powered two-cylinder engine that recharges the battery and doubles its range. Most customers buy or lease the range extender model, says Rangar.
The automaker also gives Santa Monica BMW a lot of backing, said Ranger, including sending people to the dealership to train employees and answer their “nitty gritty” questions.
In the first ten months of 2015, BMW has sold 8,879 units of its all-electric i3 vehicle in the U.S., according to insideevs.com. Santa Monica BMW has the highest percentage of i3 sales in its region, says Rangar.
The Nissan LEAF was the second-best selling pure electric vehicle in the U.S. in the first ten months of 2015 at 14,686 units, according to insideevs.com. (The Tesla Model S topped the list at an estimated 10,900 units.)
Nissan holds ride and drive events at companies around the U.S. to promote EV sales and workplace charging, said Dan Passe, a spokesman for Nissan Motor Co. It is also the exclusive sponsor of National Electric Drive Week, which hold events across the U.S. that include test drives.
All dealerships that sell LEAFs must go through a training program and be LEAF certified, and Nissan has an Electric Vehicle Operations Manager who is a dedicated resource for dealers.
The drop in gas prices has made the LEAF a harder sell, says Joseph Sage, owner of Sage Automotive Group in Los Angeles, which includes two Nissan franchises.
Still, EVs have other advantages besides savings on gas, such as access to California’s High Occupancy Vehicle lanes, he notes.
“For a smart person who isn’t really worried about the [price of] gas, but realizes how much easier it is to get around in that [HOV] lane, you gotta go with electric,” says Sage.
