What's Holding Back Electric-Car Sales?

Many Consumers Don't Know Much About the Vehicles or Available Incentives

 

People tend to underestimate the benefits of plug-in electric vehicles, researchers found.  

 

Electric cars aren't selling nearly as well as many predicted. Why is that?

Research suggests a host of reasons—including a basic lack of familiarity, a high price tag, misconceptions about the cars—and ineffective government incentives.

Consider the lack of familiarity. In a survey by researchers from Indiana University and the University of Kansas, respondents couldn't correctly answer basic factual questions about plug-in electric vehicles more than 60% of the time. Some 75% of wrong answers underestimated the beneficial aspects of the vehicles.

The survey, the most exhaustive on consumer perceptions of electric cars in recent years, was published in the journal Energy Policy last year, and was based on field work conducted in several U.S. cities in 2011.

Key Differences

Many respondents didn't realize that all-electric cars require less maintenance than gasoline-powered cars. Oil changes aren't necessary, for example, and there are fewer breakable parts. The study also found that people often underestimated the fuel savings electric cars offer.

"The lack of accurate information about electric vehicles certainly [has] contributed to their small adoption," says Rachel Krause, an assistant professor in the School of Public Affairs and Administration at the University of Kansas, and a co-author of the study.

A committee of the National Research Council issued a report last year examining barriers to greater electric-car sales. Obstacles cited in the report included high prices, few model choices, limited driving range on a single charge, the lack of a widespread charging infrastructure, and the inconvenience of installing charging stations at home.

Public Demonstrations

The report suggested that helping people learn more about electric cars, including through demonstrations at locations such as sports stadiums, office parks and malls, would go a long way to changing their attitudes.

 

"Most potential customers have little knowledge of [plug-in electric vehicles] and almost no experience with them," the report said. "Thus, it is often difficult for people to develop an interest in [plug-in electric cars], let alone decide to purchase one, even if it might be a suitable option for their transportation needs."

Other research turned up similar findings. Some 71% of drivers in a study by the Institute of Transportation Studies at the University of California, Davis, said they were much more likely to buy an electric car after they test-drove all-electric Mini Coopers.

But not all studies agree that experience and education lead to a more positive reception. In a study by the Technical University of Denmark, 31% of study subjects said they were interested in buying an electric car before they got to drive one, but only 17% said they were interested afterward.

Subjects drove the cars, including a Mitsubishi i-MiEV, for three months free. The same study noted, however, that some attitudes toward electric vehicles improved after use. More people, for instance, agreed that electric cars are "more fun to drive" than conventional vehicles.

Meanwhile, if manufacturers and policy makers may need to do a better job educating the public about what it's like to drive an electric car, they also have to get better at communicating what perks and incentives are available to buyers, such as tax breaks and the ability to use carpool lanes on highways.

Few Knew

The Kansas-Indiana survey, for one, found a "negligible number of respondents" knew about state and local sales incentives.

Another study looked at different ways incentives are administered and how that can affect sales of hybrid vehicles. For example, the study found that offering a sales-tax waiver worth $1,037 at the time of purchase had more than three times the effect on the consumer's purchase decision than a tax credit worth $2,011 that was applied later to buyers' tax returns.

The 2008 study's co-authors were Kelly Sims Gallagher, an associate professor on leave from Tufts University and now senior policy adviser at the White House Office of Science and Technology Policy; and Erich Muehlegger, an assistant professor at University of California, Davis.

In their study, the researchers concluded that immediate and easy-to-understand reductions on the purchase price were more appealing to buyers than a bigger perk that is complicated and whose benefit is delayed.

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Ms. Chernova writes for Dow Jones VentureWire. Email: yuliya.chernova@wsj.com.