Battery electric vehicles were a strong and growing share of new EV sales in the U.S. before 2023, but now the hybrid market is growing faster than BEVs
Fort Wayne, Ind.—Used vehicle buyers operate over 80 percent of cars and light trucks on U.S. roads, the vast majority of which are internal combustion engine (ICE). According to a new analysis by Lang Marketing, it’s projected to remain that way until 2040.
The operating characteristics and capabilities of today’s battery electric vehicles (BEVs) do not satisfy the transportation needs of many buyers in the pre-owned market, states the latest Lang Aftermarket iReport. Before 2023, BEVs represented a strong and growing share of new electric vehicle sales in the U.S. (BEVs and Hybrids).
However, that sales ratio has been flipped, and hybrids are now growing faster in new-market sales than BEVs. Highlights from the report are below.
Vehicle Lifecycles
Vehicles are owned by a succession of consumers, who may differ significantly in their environmental values, transportation needs, and financial resources. Most cars and light trucks in the U.S. are not driven by their original buyers.
For BEVs to be a viable alternative to ICE vehicles, they must meet the needs of a range of vehicle buyers, not just those who buy them new.
New Versus Used Vehicle Buyers
BEVs remain largely an “enthusiast” market in the U.S. and have yet to reach the mainstream of new vehicle buyers.
Many buyers of new BEVs in the U.S. (many are leased) can overlook or overcome some of the operational limitations and unique characteristics of EVs at their current technological level.
Three of the most significant operational differences between BEV and ICE vehicles are driving range, charging (fueling) time and convenience, and reliable performance over many years (the average light vehicle in the U.S. is approximately 13 years old).
BEV Range Challenge
Range anxiety is a major factor that causes many new-vehicle buyers to avoid EVs or to select hybrids over BEVs. Some of this fear of BEV range limitation is offset by the fact that EVs (with their original owners) average only about half as many annual miles as ICE vehicles.
Many BEV buyers can switch to an ICE vehicle when range becomes an issue, or they have limited auto transportation needs. Most pre-owned vehicle buyers do not fall into either of these two groups. Therefore, driving range can be much more important to them than to new BEV buyers.
BEV Charging Challenges
Over three-quarters of today’s new BEV buyers purchase at-home charging equipment. As BEVs enter the used market, many pre-owned vehicle buyers will not be able to charge them at home (they live in an apartment, cannot afford the necessary equipment, etc.), so they will face more significant charging problems than today’s new BEV buyers.
A nationwide network of fast-charging and convenient stations must be in place for pre-owned vehicle buyers to fully embrace BEVs.
Aging Electric Vehicles
It is still unclear how long BEV batteries, their most costly component, will last. Battery replacement can top $6,000. That cost would scrap a 12-year-old BEV.
Some BEVs (notably Tesla models) can face other problems. A Tesla often cannot operate if certain body parts are damaged due to sensors and other electronic issues. Some of these debilitating damages can be relatively minor, such as a dented fender.
Since approximately 30% of vehicles on the road, especially older models, have unrepaired body damage, this could pose a problem for owners of older BEVs, especially Teslas. Add to this the “technology depreciation” faced by aging BEVs with the introduction of each year’s new models with new technology.
ICE Vehicles Will Gain Extended Life
It will be a number of years before all-electric EVs evolve to the point where they can match ICE vehicles in all operating conditions, including long-distance driving, extreme weather and off-road use. For these and other reasons, consumers in the future will keep ICE vehicles in operation longer than they do now.
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