Interest in EVs and Hybrids Remains High As Fuel Prices Slowly Decrease

The national average gas price for a gallon of gas is still high at the beginning of April, down 6 cents to $4.17 per gallon on April 10 compared with a week earlier. President Biden’s decision to release oil from the strategic reserves coupled with this week’s waiver allowing the use of ethanol this summer continues to lower prices at the pump and hopefully alleviate consumer concern.

As gas prices retreated from mid-March highs, Cox Automotive saw a slight decrease in shopping for fuel-efficient vehicles and now shopping has plateaued.

Higher gas prices tend to drive consumers to consider fuel-efficient vehicles, including electric and hybrid vehicles. Vehicle shopping traffic in the early April on Cox Automotive’s Autotrader and Kelley Blue Book websites showed:

• Shopper interest in EVs increased to 66% since January, when gas prices started to rise.
• Non-luxury EV SUVs continue to hold the highest share of shopping on the sites among EVs, showing a 96% increase versus the beginning of the year. It suggests that non-luxury buyers are most affected by the higher gas prices and potentially more motivated to switch to electric.
• Shopping traffic for hybrid new cars increased 20%, back to the same levels as in the fall of 2021.
• Fuel-efficient subcompact/compact car segments maintained double-digit gains of 15% compared to January.

Persistent supply chain issues continue to impact new vehicle inventory on dealer lots. The global computer chip shortage is still an issue, and consumers predict that the shortage will last for six months or more. In a recent Cox study, 45% of consumers are likely to postpone their purchase with half of those surveyed saying they’ll postpone their purchase by 7 months or more. “Shopper interest for EVs, hybrids and more fuel-efficient gas vehicles remains high,” said Cox Automotive executive analyst. “The problem is that those are the very vehicles hardest hit by supply chain disruptions and are in the lowest supply.”

Blessin Cho, director of sales analytics, and Rebecca Rydzewski, research manager of economic and industry insights, at Cox Automotive

ADDITIONAL RESOURCES

1. In the Kelley Blue Book Brand Watch studies, fuel efficiency has dropped in importance for car buyers over the past five years, likely due to improved fuel economy and cheap gas prices. That could change in the Q1 2022 study due out later this month.
2. Interest in EVs is high, a fact that is again borne out in the Q4 2021 Kelley Blue Book Brand Watch study. 
3. EV sales in the U.S. set a record last year. The Kelley Blue Book sales count for 2021 was posted in January. An update for Q1 2022 will be published soon.