CDK Global research indicates consumer uncertainty on EV costs, tax incentives and repairs

Recent electric vehicle price cuts and federal tax incentives are boosting interest among consumers, yet today’s EV shoppers remain hesitant on making the switch, according to a recent study by CDK Global, a leading automotive retail software provider. CDK’s market research, EV Confusion Carries On, unveiled that despite efforts across the automotive industry, the state of electrification remains a tangled maze for shoppers regarding the benefits, costs, charging options and performance of electric cars and trucks.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231003955501/en/

CDK Global surveyed over 1,200 consumers in May 2023 who planned to purchase a new vehicle within the next six months. Longer driving range was a top draw among shoppers searching for EVs, with 90% of customers selecting a brand that offered maximum drive time before recharging. With a third of CDK’s EV survey respondents logging 15,000 to 20,000 miles on their cars each year, cost savings on gas is a motivating factor for potential EV ownership. Yet those polled believe that electric vehicles remain the most expensive cars overall to own and maintain.

Among the biggest concerns for consumers were ongoing electric vehicle repairs and annual maintenance, with 49% of respondents citing tire replacements as the highest expense factor for EV ownership. When compared to hybrid and gas vehicles, all respondents believed hybrids would be the least costly to maintain when in fact EVs have been heralded for years for their reduced maintenance needs from longer-living brakes to oil changes. The EV consumer disconnect creates an opportunity for auto retailers to sway shoppers in taking the next step in going electric.

“While we’re still in the early stages of electric vehicle adoption, automotive dealers can help provide knowledgeable expertise on EV benefits and incentive education as consumers increasingly transition to EVs,” said David Thomas, automotive industry analyst at CDK Global. “There are also strong opportunities for sales staff to dispel the myth of high annual costs for EV ownership by outlining the benefits, especially for those who put significant miles on their vehicles.”

Additional concerns are plaguing shoppers when choosing between electric, gas and hybrid vehicles:

• 87% of EV shopper plan to choose from an array of home charging systems that range in cost plus installation fees, while 64% of non-homeowners said they plan to rely on public charging networks that vary in availability, speed (power) and cost.
• While 83% of EV shoppers are aware of the U.S. Treasury Department’s recently updated federal tax incentives, confusion remains regarding new guidelines on where vehicles are assembled, vehicle cost, and how much an EV buyer lists as income on their annual taxes.

• 82% of electric vehicle shoppers believe that tax incentives will make an EV more affordable but questions remain around leasing. Lack of understanding those options could slow EV adoption for those hesitant to purchase electric vehicles that fit their lifestyles or living/charging situations.

CDK’s EV survey showed that consumers are willing to make the EV transition when exposed to the “neighbor effect", with 82% of EV shoppers citing their purchase decision being influenced by friends and family members. But for those still on the fence, dealers should consider going beyond the standard test drive, Thomas recommended.

“Moving to an electric vehicle is a lifestyle change. The traditional ‘going for a spin’ test drive likely won’t work with consumers who have had little exposure to EVs. Loaning an electric vehicle to customer for a day or longer provides an opportunity to highlight the true benefits of EV ownership,” said Thomas. For those who are considering one as second vehicle versus their primary mode of transportation, the decision should be an easier one to make, he added.

For additional information on CDK’s EV market research, please visit EV Confusion Carries On.

About CDK Global, LLC.

CDK Global is a leading provider of cloud-based software to dealerships and Original Equipment Manufacturers (“OEMs”) across automotive and related industries. The Company’s cloud-based, software as a service (“SaaS”) platform enables dealerships to manage their end-to-end business operations including the acquisition, sale, financing, insuring, repair, and maintenance of vehicles. By automating and streamlining critical workflows, the integrated platform of modern solutions enables dealers to sell and service more vehicles by creating simple and convenient experiences for customers and improves their financial and operational performance.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231003955501/en/