If motorists knew more about electric cars, they’d be more willing to buy them

Knowledge and familiarity with electric vehicles (EVs) could be the missing link in speeding up their adoption, with a new study published this week by NRMA indicating that if motorists knew more about EVs they would be more willing to buy them.

Australia has been a laggard in the uptake of EVs, but after a big burst in interest over the last two years that trebled the market share of electric cars in new car sales – up to around 10 per cent in some months – the growth has stalled.

According to Changing Gears: The Road Ahead for EV Adoption in Australia report, just 20 per cent of Australians planning to buy a vehicle in the next five years are considering an EV.

According to the survey that percentage increases significantly – to 32 per cent – among people who say they are already familiar with EVs.

Part of the problem, then, according to the report, is a lack of familiarity with EVs in general, with only 26 per cent of Australians feeling knowledgeable about the technology. Happily, nearly half (47 per cent) are eager to learn more about EVs, paving the way for increased adoption.

The report draws upon a nationally representative survey of 2,079 Australian consumers conducted online in February of 2024, weighted to reflect the latest ABS census data on key demographic variables.

Respondents who said they were not considering an EV for their next car cited a number of different concerns, including driving range (54 per cent) and charging times (53 per cent).

This highlights the prevalent lack of familiarity with EV technology and ongoing unease regarding long-distance travel and charging infrastructure, given that most Australians still drive less than 50 kilometres a day – well within the range of EVs.

Similarly, the report shows that, even as current EV owners remain confident in their cars’ sustainability and cost savings, many Australians remain sceptical, with only 30 per cent viewing EVs as the most cost-effective option, and only 42 per cent seeing them as the most environmentally friendly choice.

The high costs of EVs remains another ongoing barrier for consumers, with only three models in Australia available for under $40,000 and a limited second-hand market continuing to ensure that EVs are inaccessible to budget-conscious buyers and lower-income demographics.

This was reinforced by the report’s discovery that EV uptake has been strongest among drivers with an annual household income of over $200,000, families with children, and those in capital cities.

For those with the ability to afford the higher initial purchase price, however, the report also found that many consumers were unaware that EVs boast lower running and maintenance costs, making them more cost-effective over their lifetime.

According to the report, an average car driving 13,700 kilometres per year could save around $1,000 each year in fuel, or $1,200 with overnight off-peak charging.

NRMA Insurance CEO Julie Batch also recommended increasing support for the second-hand EV market and the introduction of standardised battery testing as two potential key steps to boost consumer confidence in EV technology.

“Even with the progress made to date, there are a significant number of Australians still hesitant about purchasing an EV due to worries about driving range and cost,” said Batch.

“To tackle these issues, more investment and effort are needed in driver education to encourage adoption.

“The good news is that more affordable models are now becoming available. This expansion will boost the used car market and make EVs more accessible to a broader audience. The research shows that 58% of Australians interested in EVs are open to buying a used car, so this will be a practical option for many drivers.

The report also highlighted the increasing growth of EV uptake. In 2020, EVs accounted for less than 1 per cent of new car sales, but that has consistently doubled each year, reaching 8.5 per cent of light vehicle sales in 2023 and already hitting 8.4 per cent at the halfway mark of 2024.

“To capitalise on this momentum, we need policies and incentives to support the second-hand EV market, which will help make these vehicles more accessible, especially among some buyers who may be deterred by the upfront cost,” Batch concluded.

“Additionally, standardising battery health testing, similar to an odometer test, will be a positive step to building consumer confidence in the longevity and safety of these cars.”

Changing Gears: The road ahead for EV adoption in Australia is the first instalment of a two-part report produced by NRMA Insurance. The second report will include an analysis of EVs versus hybrid vehicles focusing on several critical aspects including cost comparison, repair considerations, battery recycling, and implications of public policies and government subsidies.