Why Gen Xers Hold the Keys to the EV Market

Consumer interest in electric vehicles (EVs) has been accelerating as the dual concerns of environmental impact and fuel costs weigh on car shoppers’ minds. But while EV sales have improved in the past few years, they still make up a tiny portion of the overall auto market — less than 7% of new vehicle sales, according to Edmunds. In order to expand the market, automakers must widen their potential consumer base. Morning Consult Audience data reveals that the characteristics of consumers who may purchase an EV in the future look very different from the current market.

The electric vehicle market of the future is older and lower income

The demographic profile of current electric vehicle owners shows that the stereotypes are spot on: mostly millennial, mostly male, high-earning liberals who reside in urban areas. But while the EV market has this consumer group covered, the profile of those who plan on owning an EV sometime in the future looks remarkably different from nearly every angle. 

Potentially the most surprising characteristic is the age of those who plan to own an EV in the future, which skews more heavily towards older consumers than the age of current owners. What this means is that, rather than capturing the interest of Gen Zers who may not be interested in driving at all, EV brands may want to shift their attention towards Gen Xers. Certainly baby boomers make up a slightly larger share of those interested in owning an EV, but they’re also closer to the end of their vehicle-buying days than Gen Xers — converting Gen X now could create long lasting customers. 

Another notable difference is the gender split: While current EV owners skew much more heavily male, the gap is much smaller among future EV buyers. Men still make up the majority of the segment, but women show more promise as future buyers.

Income levels of these cohorts are also worth examining. While current EV owners are much more likely to be high-earners — logical given the retail price gap between electric vehicles and their internal combustion engine (ICE) counterparts — the balance shifts among the future owner demographic. Perhaps this reflects more aspiration than reality at the current time, though as EVs become more mainstream and the price gap narrows, there will be a market among lower earners.

EV brands will need to make a strong price play to capture future customers

In order to reach these future buyers, brands must understand the potential barriers to EV ownership. While younger consumers may be compelled to invest in an electric vehicle for climate and emissions reasons, older adults express less concern about climate change as a whole, and more specifically their own carbon footprint from everyday driving. Gen Xers in particular are the least likely generation to say they’re concerned about the auto industry’s impact on the environment (though nearly half say they are). 

To reach disaffected Gen Xers, brands must address price concerns. Notably, this generation is most likely to say they’re very concerned about the cost of gasoline — 9 percentage points more than Gen Z adults and millennials. That said, they’re also more concerned than their younger counterparts about the cost of EVs, with 27% saying they’re “very concerned.” Getting past those concerns will require education not just about the retail price of electric vehicles, but about the vehicle’s lifetime cost in relation to an ICE alternative. Helping these discerning consumers to calculate the out of pocket costs as a whole rather than simply considering upfront spend may help tip the balances in favor of EV ownership.

Automakers need to close the trust gap to win over future customers

One other area auto manufacturers will need to address is trust. Compared with current EV owners, future EV owners are 12 points less likely to say they trust major auto manufacturers. What’s more, the gap between the two groups has widened since the beginning of 2020, when it was only 1 point — since then, trust among current owners has grown by 16 points, compared to a 5-point increase for future owners.

Building trust is crucial when introducing consumers to a new product, especially one that comprises one of the largest purchases most consumers will ever make in a lifetime. And while major automakers have had decades to work on building trust with consumers, negative interactions with a brand or product can tarnish trust for good. A first-time EV owner whose experience is not matching up with brand promises may lose faith completely in the brand’s ability to deliver, so automakers will have to address EV-specific concerns around things like battery life, mileage and charging infrastructure that may be keeping potential customers at bay in a transparent and straightforward manner.