Lack of appeal of EVs for many pre-owned buyers will boost the long-term internal combustion engine aftermarket into “Golden Age”
Fort Wayne, Ind.—It is not uncommon in the U.S. for a car or light truck to have four or more owners during its life on the road. Buyers of new all-electric vehicles often have environmental values, transportation needs, and financial resources that differ significantly from those of used vehicle buyers. The characteristics and demands of today’s BEVs, however, will not meet the needs and resources of many buyers in the pre-owned vehicle market, states the latest Lang Aftermarket iReport.
“Without a strong market of secondary buyers who will purchase an increasing number of pre-owned electric vehicles, sales of new BEVs face strong headwinds, likely causing internal combustion engine (ICE) vehicles to remain on the road longer than is common today.” Lang adds, “This will produce an ICE aftermarket Golden Age that will extend well past 2040.”
The following are key takeaways from the analysis.
Vehicle Ownership Cycle
Over 80% of cars and light trucks in the U.S. are driven by used-vehicle buyers. This means that for BEVs to be a viable alternative to ICE vehicles, they must meet the needs and resources of a variety of buyers, not just those who buy them new. Without a strong pre-owned market that will purchase a growing number of used BEVs, Lang stresses that the new market for BEVs will face significant challenges.
New Vehicle Buyers Versus Used Buyers
BEVs remain largely an “enthusiast” market in the U.S. and have yet to expand their appeal to the mainstream of new vehicle buyers, states the report. Many buyers of new BEVs in the U.S. can overlook and overcome many of the operational limitations and characteristics of BEVs at their present level of technology (and for some years to come).
Three of the most significant operational differences between BEV and ICE vehicles are driving range, charging fueling issues and reliability over time. Here’s a closer look at each:
BEV Range Challenge
Range anxiety is a significant factor causing many new-vehicle buyers to avoid BEVs or select hybrids over BEVs. Some of this fear of BEV range limitation is offset by the fact that BEVs presently average only about half as many miles per year as ICE vehicles of the same model year.
This could mean that many BEV owners can switch to an ICE vehicle when the range becomes an issue or they have limited auto transportation needs. Many pre-owned vehicle buyers do not fall into either of these two groups. Accordingly, 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 charge them at home, requiring special equipment and locations. As BEVs transition to the used market, many pre-owned buyers will be unable to charge them at home, Lang states, as they may live in an apartment or elsewhere that can make it challenging, and may not be able to afford the necessary equipment, etc., so they will face more significant charging problems than most of today’s new EV buyers.
A nationwide network of fast-charging and convenient stations must be in place to avoid significant EV-changing issues for pre-owned buyers. This will become even more urgent when BEVs grow in number and are more widely distributed across the U.S. Construction of an efficient and convenient charging infrastructure is a considerable challenge, and even with strong government support, the analysis reports that it will likely not be achieved for many years.
BEV Reliability Over Time
It is still unclear how long BEV batteries will last. Battery replacement can top $6,000, according to Lang. That cost would likely scrap a 12-year-old BEV. The average age of ICE vehicles on U.S. roads is nearly 13 years.
In addition to battery health, some BEVs, notably Tesla, can have other concerns. Frequently, a Tesla cannot operate if certain body parts are only slightly damaged, due to sensors and other electronic issues critical to their operation. Some of this debilitating damage, such as a dented fender, can be relatively minor.
Since approximately 30% of vehicles on the road have unrepaired body damage, this could present a problem to owners of older BEVs, especially Teslas, which presently account for most of the BEVs across the U.S.
ICE Vehicles Will Gain Extended Life
It will be many years before BEVs evolve to the point when they can match ICE vehicles in critical operating conditions: long-distance driving, ease and speed of refueling, extreme weather, and off-road use. For these and other reasons, Lang predicts that consumers are likely to keep ICE vehicles in operation for a longer time in the future.
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