Tesla Motors' (TSLA) efforts to bring electric cars to the mainstream have been paying off.
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Consumers, specifically young ones, have become increasingly interested in buying an electric vehicle (EV) in the past year, according to the Consumer Federation of America's (CFA) second annual survey on EVs. CFA found that this interest was driven by companies including Tesla and General Motors (GM) bringing more choices to market while lowering prices to make electric cars competitive with traditional gas-powered models.
"Consumer interest in buying electric vehicles is growing at the same time these vehicles are becoming more available and more attractive," said Jack Gillis, CFA Director of Public Affairs and author of The Car Book in a press release. "It does not surprise us that electric vehicle sales have grown more rapidly in their first four years than did those of hybrid vehicles."
Tesla's Model 3 is cheaper than previous lines. Image source: Tesla.
To know is to want
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According to the survey of 1,007 adult Americans conducted for CFA by ORC International, people's interest in EV's increases as they learn more about them. The results showed that among respondents who considered themselves "very knowledgeable" about electric vehicles, 55% are interested in buying one. Conversely only 22% of people who say they have no knowledge of electric cars are considering buying one.
Overall interest in buying an EV has increased from 31% in 2015 to 36% in 2016. Young adults (18-34) were the most interested in taking the electric plunge with 50% being willing to consider buying one.
The survey also asked respondents if they would consider buying an EV if it cost the same as a gas-powered car while delivering a 200-mile range between charges (as Tesla's various models do as does Chevy's new Bolt) and having lower operating costs. With those caveats, the numbers of people interested in an EV jumped to 57% among all those surveyed. Given those conditions, highly knowledgeable people had a 62% interest rate and young adult interest climbed to 70%.
"As the younger buyers enter the market, more attractive EVs are made available, and consumers learn more about these vehicles, interest in purchasing them is likely to grow significantly," said Gillis.
Work remains to be done
This survey shows that consumers will buy EVs when they cost less than gas-powered cars. The problem is that they don't. Tesla's Model 3, which starts at $35,000, greatly lowers the base price for the company's line, but it still costs considerably more than comparable gas-powered models. Chevy's latest Bolt, which starts at about $37,500, has the same problem.
Tax incentives and gas savings bring these cars much closer to their gas-powered rivals, but up-front costs remain higher. Clearly, the EV industry, led by Tesla, has made the concept of electric cars something people will consider.
Now it's simply a matter of bringing the cost down even further. Consumers are obviously willing to drive EVs. They just need to be able to afford them.
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Daniel Kline has no position in any stocks mentioned. He wants an EV, but parks in a garage that does not offer plugs. The Motley Fool owns shares of and recommends Tesla Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.