Is there a generation gap in the auto industry for electric vehicles?
Electric vehicles have successfully created their space and demand in the mobility market. Reports suggest that more than 50% of potential buyers in the US are open to picking electric vehicles as their next purchase. This clearly indicates that there is a huge scope and market for the purchase of electric vehicles in the coming years. Still, the auto industry is seeing a considerable generation gap for electric vehicles.
Despite the increase in consumer interest, fully electric car sales continue to be a modest part of the overall light vehicle industry.
Despite high-profile launches of electric vehicle models from traditional automakers, Tesla remains the dominant force in the EV market, with its share of battery-electric car sales increasing from 70% in the first quarter of 2021 to 76 percent in the first quarter of 2022. Why isn’t the number of electric vehicles sold increasing? Why is it so difficult for traditional businesses to catch up to Tesla?
In this write-up, let us explore all the key points, a particular understanding of electric vehicles, and the possibility of a generation gap in the auto industry.
Have you ever wondered what all factors have contributed to making electric vehicles an uprising trend in the industry? Experts believe that specific reasons play a significant role in pushing buyers’ interest toward electric vehicles.
Factors contributing to the popularity of electric vehicles
The world is becoming concerned about various factors impacting the planet’s overall health quotient. Here are the top key points that explain why people are inclined towards choosing electric vehicles over conventional vehicles as their choice to travel.
1) Moving towards sustainability
As we have already mentioned about the growing concerns of individuals toward the health quotient of the earth, the sustainability factor holds the most substantial grounds.
People are showing their concern for the deteriorating condition of the environment and are actively participating in changing the current scenario. The addition of electric vehicles can help in pushing the planet toward a healthier atmosphere without compromising the day-to-day traveling too. Hence, it becomes the most compelling reason to opt for electric vehicles.
2) Fluctuating gas prices
The gas prices are stubbornly increasing frequently. This has created a need for developing consumer interest in the purchase of electric vehicles. As compared to 2018, there has been a sudden rise of individuals who are now ready to opt for electric vehicles because of the gas price surge.
The above-discussed points clearly indicate why the market is seeing a rapid spike in demand for electric vehicles.
But surprisingly, studies have suggested that instead of these existing factors, there is a clear bifurcation among the generation of buyers. Wondering how and why it is there?
Let us find it!
Prevalence of generation gap in the auto industry for electric vehicles
There is a specific qualification of generations in our society. Among those, gen y and z are open to exploring and making their purchasing decision for electric vehicles.
Tesla leading the race has crafted and designed their electric vehicles keeping in mind the taste and requirements of their specific class of buyers. As compared to older generations, the younger generations are quite open to making electric vehicles their traveling partner.
As compared to Boomers, Gen Y/Z are among the high potential buyers and are ready to make it ( electric vehicles) their next purchase. The gap is widening subsequently, and in the past three years, the market has become quite understandable and open to negotiating the existing generation gap in a better way.
Now the burning question that overpowers the debate is why? Why is there a subsequent generation gap in the auto industry of electric vehicles? What all active factors contribute to making this gap provisional essential and decision-making element for the electric vehicles industry?
Different Perspectives of old buyers vs. their younger counterparts
Almost three-quarters of Generation Y/Z buyers indicate they’re open to buying a battery-electric vehicle as their next vehicle. In comparison, just around a third of Baby Boomers share this sentiment. To make matters even more complicated, interest among Gen Y/Z buyers has increased faster than that of Boomers in the last three years. To put it another way, the divide between younger and older buyers is growing.
The gap in interest is due to very different perceptions about battery electric vehicles, particularly the cost of ownership. The majority of Gen Y/Z consumers (63%) believe that owning a battery-electric vehicle is less expensive than owning a typical gas or diesel vehicle. Only a quarter of Baby Boomers agree.
Some aspects of BEVs, like battery life, recharging time, and range, are shared by both older and younger buyers. These same concerns are cited by both groups as the primary reasons for deciding not to buy a BEV after contemplating one.
In comparison to Gen Y/Z, boomers account for a substantially bigger share of new vehicle sales. According to Statista.com, Boomers accounted for 41% of light vehicle sales in 2020, while Gen Y/Z accounted for only 23%. Boomers, on the other hand, account for only 7% of individuals who considered a BEV during their most recent car purchase, while Gen Y/Z account for two-thirds of that cohort.
In addition, boomers are more likely to be able to afford the increased pricing of today’s BEVs. When it comes to future considerations of BEVs, boomers also choose more established brands. Although both age groups are enthusiastic about Tesla, Baby Boomers are far more likely to cite Toyota, Honda, and Ford. Gen Y/Z, on the other hand, is considerably more likely to mention brands such as BMW, Audi, and even Apple.
Common reasons that explain the existence of the generation gap
Here is the list of the most common reasons that showcase the prevalence and existence of the generation gap.
1) They are open to a change
The young generation has not used conventional traveling modes for years. As they are already young enough to own that history, they are quite flexible to change and opt for a change.
In contrast, older generations, such as boomers, had spent most of their lives predominantly using conventional modes of traveling. They have created their own comfort zone and are quite skeptical about moving towards this 360-degree change. If you have been into the boomer generation, you must be knowing about the sense of hesitation and why they are looking to limit themselves to certain traveling modes only.
2) They are ready to experiment/explore new things
Gen Y and Z are open to experimenting and trying new things. This open-hearted feeling of trying out new things has created a scope for adding electric vehicles as their new traveling partner.
On the other hand, the people belonging to the older generation are still not confident to choose and try their hands on new things. And choosing a completely different mode of traveling ( electric vehicles ) is certainly a big ask from them.
3) They are more technology-driven
There is no doubt about the love and liking of the younger gen towards technology and its other parts. The tech-driven enthusiastic individuals are always keen to try out the new options and learn more from the tech side.
On the other hand, the older generation is not so friendly with the usage and adoption of technology. Though they have well-acquainted themselves with the adoption of smartphones, there is still a long road to making them comfortable with electric vehicles. This hesitation among them is one of the possible reasons for them limiting themselves from trying out new electric vehicles in the market.
4) They are getting aware of sustainability
The younger generation is more concerned and aware of the greener earth. The rising consumption of non-renewable resources has been an alarming reason why individuals are looking for vehicles that do not largely contribute to actively adding pollution and energy consumption.
This increased concern has been one of the possible reasons why gen y and gen z are looking for electric vehicles as their travel choice. For more information about sustainability quotients and how it makes a visible difference in the green quotient, feel free to connect with our experts and get advice.
5) They are concerned about skyrocketing gas prices
Last but not least, the skyrocketing gas prices are a major concern among today’s generation. The fluctuating and exponentially growing gas prices have created chaos and are burdening the regular users with the heavy price structure.
In such cases, going ahead with electric vehicles can be a subsequent step for the cost-effective benefits too. If you are looking for a stable and genuine travel cost, it is important to choose electric vehicles. They can help you in limiting your cost and fuel prices conveniently. To know more about how electric vehicles can help in saving costs, feel free to connect with us.
There is no second thought that there is a generation gap for electric vehicles.
Jugnoo is a leading mobility tech provider that has always believed in making technology get partnered with your traveling needs. If you still have doubts and hesitation about embracing this technology into your existing processes, feel free to call us or book a demo consultation.