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Price vs perception: Is vanity killing EV sales?

We know electric vehicles are expensive right now, but apparently that’s not all which is holding Australians back from buying an EV.

AUSTRALIANS AREN’T BIG into electric cars. If we look to Europe, China, even the US, electric vehicle sales are relatively roaring compared to last year’s uptake of brand new electric cars in Australia, which made up just 0.6 per cent of new car sales.

However, it’s worth keeping in mind that last year’s 6718 sales of electric vehicles was triple the amount sold in 2018, showing a swing toward EVs even if the new propulsion technology makes up just a small fraction of new car sales. Still, that number is pretty small, so there are some barriers customer aren’t getting over, like price, with equivalent fully electric vehicle models costing about double the equivalent petrol variant, and then there’s range anxiety – or how far you can drive before waiting an hour on a fast charger to fill up again.

But according to research performed by Deakin University, we car-loving Australians care even more about what the people around us think; we’re vain, and won’t buy an EV if we think we’ll look better in a big petrol SUV, or pick-up truck, or whatever. 

Research from a survey of 500 Australians shows that the majority are more concerned about ‘keeping up with the Joneses’ and what people around them think of what is parked in the driveaway than what the actual car costs. And that probably explains the explosion in SUV sales and uptake of premium brands in recent years, all those neighbours falling like dominoes to have the same or better car sitting out front…

Mercedes-Benz EQC

Now while one could argue that there are some shiny electric SUVs around, like the new Mercedes-Benz EQC and the established Jaguar I-Pace, they’re also relatively expensive – a factor that Deakin Business School’s lead researcher Dr James Davidson says is still undoubtedly influential in the purchasing decision.

“We found that tangible things like purchase price, operating costs, driving range, emissions and acceleration time are all certainly influential in the decision-making process,” he said.

“But they also sit closely alongside psychological components, because some consumers only act in a certain way because of prevailing attitudes and social norms.

“We found it’s actually this part of the equation that has a big role to play in driving a higher uptake of electric vehicles in Australia. It’s not just the tangible attributes that underpin buying behaviour, but social norms, such as what your friends and family might think of your purchase and attitudes towards the vehicles.

“That means policy-makers and industry need to do more change the social acceptance of electric cars, as well as consumer understanding. It doesn’t matter how good a vehicle is or how much it costs, if a potential buyer’s friends and family encourage it as the right choice that will make the real difference.”

Hyundai Ioniq

Some car manufacturers are making strides to at least help consumers into electrified vehicles, like Toyota with its wide range of affordable mild hybrid cars and Hyundai and Nissan which sell Australia’s most affordable fully electric cars the Nissan Leaf and Hyundai Ioniq. But still, at almost $50,000 before on-road costs for a hatch, both are expensive kit. And that’s obviously an issue as we head toward emissions targets that propose petrol and diesel-powered car bans, says Davidson.

“That’s particularly pertinent when we consider proposed targets like electric cars making up 50 per cent of all new vehicle sales by 2030 in Australia.

“In the UK, Prime Minister Boris Johnson recently announced that the UK government will now ban the sale of new gasoline-powered cars five years earlier than planned, bringing that forward to some point in 2035.”

“Across in Norway, battery electric vehicles make up more than 29 per cent of market share, and when combined with plug-in hybrid electric vehicles, more than 46 per cent, but they have multiple incentives.

“So if Australian policy-makers and industry want to increase the domestic uptake of electric vehicles by Australian drivers, they need to look at incentives that not just address the tangible attributes around cost and performance, but also incentives that position electric vehicles as the social norm.”

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1 Comment

  1. David J Pearn
    February 21, 2020 at 8:02 pm — Reply

    The old worlds manufacturers don’t want this transition to happen and the feds are concerned about lost fuel tax revenue.
    Tesla is a WMD.

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Alex Rae

Alex Rae