Fuels Institute Report: Consumers and Alternative Fuels 2017

A report released by the Fuels Institute finds a strong disconnect between what potential car buyers say they will do and what they actually do when it comes to purchasing non-gasoline powered, alternative fuel vehicles. Consumers and Alternative Fuels 2017, the latest installment of the Fuels Institute’s annual measure of American consumers’ sentiment on vehicle purchases, finds that significantly more consumers said they were very likely or somewhat likely to purchase an alternative fuel vehicle than actually did purchase such a vehicle last year.

“There remains a strong disconnect between stated consumer interest and actual consumer purchases across all types of alternative fuel vehicles, including electric, hybrid, and diesel vehicles,” said John Eichberger, executive director of the Fuels Institute. “Consumers’ theoretical interest in non-gasoline powered vehicles hasn’t yet been reflected in actual sales at dealer lots. But the sustained interest in alternative fuels could result in increased alternative vehicle sales in the coming years, depending on many variables, including the decisions of policymakers.”

For electric vehicles, the report found that factors influencing the gap between consumer interest and actual purchases included low gas prices, lack of battery charging infrastructure, range anxiety, and battery replacement costs. Pending congressional legislation also could pose an additional challenge to the emerging electric vehicle market.

Check the INFOGRAPHIC for the Fuels Institute's report.

Fuels Institute Report: Consumers and Alternative Fuels 2017

The U.S. House of Representatives’ version of the Tax Cuts and Jobs Act eliminates the federal tax credit (worth up to $7,500 per vehicle) for the purchase of an electric vehicle, while the U.S. Senate version of the tax legislation would not repeal this tax credit. How Congress ultimately proceeds likely will have a significant impact on the electric vehicle market, as the experience of the state of Georgia helps demonstrate. In 2015, Georgia repealed a $5,000 electric vehicle tax credit and simultaneously imposed a $200 registration fee on electric vehicles. Electric vehicle sales in Georgia have declined by 80 percent since repeal of the tax credit.

“The cost of an electric vehicle remains a stumbling block to broad consumer adoption,” explained Eichberger. “In our survey, 81% of consumers who said they would not consider an electric vehicle said the vehicles were too expensive. With regards to this factor, what the government does can have a significant influence on the pace of market adoption.”

Among other key findings in the report:

When specifically asked if they would consider an all-electric vehicle for their next purchase, 51 percent of potential car buyers said they were very or somewhat likely to do so, up from 48 percent of respondents in a February 2016 Fuels Institute survey. Yet, electric vehicles represented only 0.45 percent of all light duty vehicles sold in 2016 (80,039 units).
While the Fuels Institute report indicates electric vehicles have a long way to go before capturing significant market share, increased consumer interest in electric vehicles, especially among consumers aged 18-34, could reflect a growing trend that spurs sales in coming years. Those aged 18-34 are significantly more interested in electric vehicles than older drivers.
The Fuels Institute report found a similarly strong disconnect between stated consumer interest in purchasing hybrid and diesel vehicles and actual sales of these vehicles.
Strong consumer interest in alternative fuel vehicles holds the promise of these vehicles capturing significant market share in the future. Factors, including government policies, will play a critical role in how quickly and whether the significant gap between stated consumer preference for alternative fuel vehicles and actual sales of these vehicles will narrow.

The Fuels Institute partnered with the National Association of Convenience Stores (NACS) on Consumers and Alternative Fuels 2017, which is based on a survey of 1,100 American adults. Download the full report below.

FULL REPORT: CONSUMERS AND ALTERNATIVE FUELS 2017