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Exclusive: High gas prices boost electric vehicle buying sentiment

Gas prices may have tailed off a bit recently after hitting new highs in early March, but they're still taking a toll on consumers' wallets — and they're changing the way people feel about buying an electric vehicle.

Online auto research site Cargurus.com has new data, first seen here at Yahoo Finance, that shows a big boost on the impact of high gas prices on behaviors and attitudes surrounding EVs in general.

CarGurus conducted an online survey of 2,176 automobile owners in the U.S. on their sentiments toward electric vehicles. The survey was done in three waves: on February 28, as gas prices in the U.S began to climb, then a second wave on March 14 as gas prices climbed higher, and finally, a third wave was conducted on April 8, as gas prices leveled out.

Looking at consumer sentiment towards EVs in general, 40% of respondents said they expect to own an EV in the next 5 years, versus 34% from a year ago. Looking further out, 60% said they would own an EV in the next 10 years versus 40% from last year. Overall, those "excited about development" in the EV space climbed to 51% from 45% from a year ago.

Cargurus.com 2022 Electric Vehicle Insight Report
Cargurus.com 2022 Electric Vehicle Insight Report (Cargurus.com)

"Consumers know that EVs are the future," says Madison Edwards, Cargurus.com director of consumer insights. "But as gas prices were increasing in March, and moderating in April, we saw that expectations to own in the next 10 years started increasing once again."

However, looking deeper into gas prices and EV buying sentiment produced some unexpected results. In 2021, respondents said if gas prices jumped to $5 per gallon, 56% would “be much more likely to consider buying an electric vehicle,” with that percentage hitting 71% if gas reached $6 per gallon.

In 2022, only 27% of respondents said gas at $5/gallon would boost their consideration in buying an EV, and only 47% of those respondents said it would take $6/gallon gas to make them more likely to consider an EV.

Cargurus.com 2022 Electric Vehicle Insight Report
Cargurus.com 2022 Electric Vehicle Insight Report (Cargurus.com)

"Five dollars a gallon became a much more realistic a possibility to consumers when they were seeing gas already over $4 a gallon, and that make it much different to think about - 'would i go right now and buy an electric vehicle if gas was $1 higher than it is today?'," Edwards said. "So I think we just saw that the bar became a little bit higher for what gas prices would need to be to cause people to go out and buy an EV today."

How consumers are coping with expensive gas

Amid high gas prices, consumers with gas-powered cars are using them less. Sixty percent of respondents said they are lowering fuel consumption to combat higher prices — 81% of those people are only driving when necessary and shifting shopping behavior online as opposed to in-person trips.

From a consumer point of view, beyond gas prices, automakers still have a lot of work to do to convince buyers that going electric is the way to go. Respondents said technology improvements regarding range and charging speed (43%), more charging stations (43%), and cost parity between EVs and gas-powered cars (40%) would be most effective in convincing them to buy an EV.

Among the EV brands consumers would be looking to buy if they were in the market, Tesla (TSLA) is still king, but the traditional automakers are catching up.

Cargurus.com 2022 Electric Vehicle Insight Report
Cargurus.com 2022 Electric Vehicle Insight Report (Cargurus.com)

"Cleary Tesla is always top of mind when it comes to electric vehicles, and in every study we've done... Tesla is at the top of the list, but Tesla's lead has been shrinking," Edwards says. "We actually see that Toyota gets a lot of credit for being an early innovator in the hybrid space."

The survey revealed 45% of potential EV buyers list Tesla as their top choice, but Toyota (44%), Honda (40%), and Ford (31%) are right behind California-based Tesla.

——

Pras Subramanian is a senior autos reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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