More and more consumers are prioritizing affordability when it comes to electric and hybrid vehicles, tilting momentum away from luxury EV brands, according to a new report.
Experian’s Automotive Consumer Trends Report: Q2 2024 reflects an ongoing transformation in electric vehicle sales driven by technological advances, increased competition and government incentives. As a result, EVs and hybrids are becoming more accessible to a broader range of consumers.
The report found that non-luxury EVs are slowly making up more of the market, growing from 22.7% last year to 26.6% in Q2 2024. Nearly 60% of EV buyers cited affordability as a key factor in their decision-making — surpassing performance and environmental benefits.
Meanwhile, the percentage of exotic and luxury models declined from 77.3% to 73.4% year-over-year, the report found.
Overall, EVs continued to make significant gains, the report found. For instance, of the 291.1 million vehicles on the road in Q2 2024, EVs accounted for more than 3.5 million, an increase from approximately 2.7 million this time last year.
The report also found:
The average price of an EV has decreased by approximately 15% over the last two years. The report attributes the shift to several factors, including advancements in battery technology, reduced production costs, and various automakers’ introduction of new, lower-priced models.
Demographically, younger buyers and those with tighter budgets show increased interest in EVs and hybrids. The share of buyers under 40 has grown by nearly 10% in the past year, with many citing affordability as their top consideration.
What’s driving affordability?
The reduction in EV prices can be traced to several contributing factors, primarily government incentives and rebates. Many states and the federal government offer tax credits and other financial incentives that reduce the initial purchase price of an EV or hybrid.
In addition, technological advancements, particularly in battery technology, have resulted in lower production costs for EVs, with innovations in design and manufacturing leading to a gradual decline in prices.
The availability of pre-owned EVs is also growing, providing an additional layer of affordability for those interested in electric or hybrid vehicles and willing to forego buying the latest model.