Energy prices are soaring. There are many different reasons for this, but in Europe the Russian invasion of Ukraine is certainly causing untold instability. Many European nations have relied extensively on Russia for energy and some, like Germany, have turned away from nuclear power generation. Europe has a major energy crisis. In addition to gas and electricity prices going up, petrol pump prices are also at record levels. Drivers in the UK are now paying around £1.67 a litre – that’s 2 Euros or about $2.20. These are record petrol pump prices and some analysts are predicting a semi-lockdown as people work from home and avoid commuting or unnecessary travel.

All this uncertainty about energy prices is causing many consumers to look again at one of the key advantages of electric vehicles (EVs) – you never need to ever visit a petrol pump again. Although the higher cost of electricity at home does mean that recharging is becoming more expensive, it remains only a fraction of the cost of filling a car that uses petrol. Typically the electricity cost when recharging an EV is less that 10% of the comparable fuel bills for a traditional car – and with petrol pump prices soaring this ratio may be even more favourable for EVs now.

Recent research from the US shows some interesting insights into consumer behaviour. Both the changing price of electricity and petrol changes the intention of consumers to purchase an EV, but the fluctuating petrol price is four to six times more influential on consumer intentions.

This is because people are usually far more aware of the changing petrol pump prices than electricity prices. So even if electricity bills are also increasing, this has much less of an effect on EV purchasing intention than the rising price of petrol at the pumps.

This is an important observation because all forms of energy are becoming more expensive at present, but increasing home electricity bills do not appear to be significantly damaging the intent to purchase an EV.

Last year, around 4 million new EVs were shipped by auto manufacturers. This year the industry analyst Gartner has suggested that over 6 million will be shipped. There are tens of millions of EVs across Europe, but with this rate of acceleration it is feasible to imagine that by the end of this decade almost all new cars sold will be EVs.

The same Gartner analysis predicts that the number of public EV chargers will surpass 2 million globally this year. All indications are that the infrastructure is now growing at a similar pace to EV sales. With no indication that petrol prices are going to drop anytime soon, it looks like the analyst predictions may even be conservative.

More people want to move away from a reliance on petrol and fears such as ‘range anxiety’ are now looking less and less like a reason to not jump into the world of EV ownership. 2022 is likely to be the year when EV purchases go mainstream and the soaring cost of petrol may well have made this happen.

Please get in touch with me directly on LinkedIn here if you want to discuss these ideas further. Interested in learning more about electric vehicle customer experience solutions? Please contact ICON’s Mark Matthews.