Why Do EV Shoppers Believe The Myths with David Thomas

CDK Study 👇
https://www.cdkglobal.com/insights/new-study-reveals-sharp-shift-evs

Electric vehicle adoption faces a surprising challenge: shoppers believe things about EVs that simply aren't true. And according to automotive leader David Thomas, from CDK Global, these misconceptions are getting worse, not better.

In this episode, David shares eye-opening data from his latest research on EV shopper perceptions, revealing a massive gap between what people believe and what's actually true about electric vehicle ownership costs, charging infrastructure, and long-term value.

What We Cover:

🔧 The Maintenance Myth – Why all shopper types (including current EV owners!) wrongly believe EVs cost more to maintain and repair

💰 The Leasing Landscape Shift – How 77% of shoppers changed their preference when offered great lease deals, and what happens now that those incentives are gone

⚡ The Charging Infrastructure Paradox – 30% more DC fast chargers added in the past year, yet shopper confidence is declining. Why?

🚗 Tire Wear: Myth or Reality? – Unpacking whether EVs really chew through tires faster (spoiler: it's complicated)

📊 The Plug-in Hybrid Shopper Advantage – Why PHEV shoppers are the most informed group, even more than current EV owners

🔮 2026 Predictions – Where David is putting his money: luxury EVs and what that means for dealers

🏠 The Home Charging Blind Spot – Why 80% of households have the charging solution already (their driveway), but don't realize it

Guest:
David Thomas is an automotive industry leader at CDK Global specializing in market research and consumer behavior insights.

About EV Insider:
EV Insider is produced by Scott Case and the team at Recurrent, bringing you ground-level insights from automotive dealers, executives, and industry experts navigating the electric vehicle transition.

Learn more about Recurrent: https://www.recurrentauto.com

Subscribe for weekly EV industry insights from the people who live it every day.

Transcript

SPEAKER_00 0:00

When someone comes in with negative equity, a lot of dealers were able to put them into an EV with that strong incentive and give them a price and a monthly payment that kind of took the sting out of losing all that negative equity they had built up. So that lever is not going to be there. And that definitely sold a lot of EVs.

SPEAKER_01 0:18

Welcome to EV Insider by Recurrent, where we make it easier to buy and sell electric cars by giving you access to leaders from across the industry. Let's get started.

SPEAKER_00 0:29

Let's talk about perception and reality of cost of ownership. So I think this is like such an interesting divide between the current EV owner and the uh current gas car owner as they think about what they're gonna save. So I think that there are some misperceptions around if you already have an EV versus you don't, what you expect to pay as a result of the, you know, what your cost savings or negative cost savings is gonna be. So can you untwist like what's going on there? Yeah, yeah. This is definitely that misperception type type thing. And so, you know, what we we we ask the shoppers of all types of vehicles, what do you think is gonna be the most expensive in terms of purchase price to insure, to repair, to maintain, to replace tires? Is it gonna be, you know, is it the gas car? And and and we so we asked it's a little difficult because yes, we asked all four types of shoppers about all four types of cars. So yeah, yeah. Uh our our design team really uh really did went the distance in terms of putting that into a visual. So, you know, when it comes to the cost of EVs, uh almost all shoppers believe it's gonna cost more, but that's kind of true, right? To purchase. And the tires, you know, that kind of came through a little bit, but it's really this repair and maintenance misconception across all shoppers that EVs will cost more to maintain, um, which is the one of the number one benefits of EVs, besides the savings on fuel. So that's something we've tracked and it remains true. What we have seen though is the uh residual value of the EV um being lower, that definitely has taken hold, and which is true. I mean, they don't they don't hold their value quite as well, but that's something that did break through. Like all groups said, Yeah, I believe EVs will not hold their value as well. But the maintenance one um and the repair one really stands out to to be totally off from what reality is. And the group that is most in tune are the plug-in shoppers, not even even the EV shoppers aren't as as spot on on some of these things. So uh the plug-in, I I don't know what it is about plug-in shoppers if they're just really into technology and they're they already were choosing between two things and and picked a third, or why they're they're they're kind of locked in a little bit better than than even the EV shoppers. But yeah, on the gas side, especially, um, they they really don't and and we break down some other areas of um they just don't understand the benefits and it's getting worse. It's not maybe so much the like the operating, like the the fuel cost, basically. Maybe they understand that's gonna be cheaper, but in their mind, they think, well, the any kind of savings I'm gonna get in in day-to-day or week to week fuel costs is gonna be overwhelmed by a much higher maintenance cost that just simply doesn't exist. Is that is that what you think it is? Yeah, that's that's that's there um for sure. And then on the tire side, you know, which was something you know early on in EVs that we talked a lot about, I talked to dealers and they're like, it's not really we're not really seeing a huge difference in terms of of EV uh buyers coming in for the tires versus um non-EV. So that's that's kind of interesting. Four or five years ago, whenever we you know started doing this and tires were a problem, is mainly because Teslas were the the the bulk of EVs out there and they have a ton of torque. Um and so as more EVs hit the market that weren't like that, you know, that weren't putting out all that torque. Um, you know, an ID four driver is not like a Tesla driver. So so I think on the tire side, we're gonna see um, you know, that's gonna be less of a factor going forward, too. I hang on, I was an ID four driver, I had a 2021, and I will say, and I do not have a lead foot, the front tires on that car got chewed to cr to hell. I mean, yes, and uh I think what it was to combination of two things, I actually think they did not put awesome original tires on it, right? And two is the turning radius on the ID4 is so good that I think I was actually like grinding the tires with doing my beautiful U-turns tires because the back tires are fine, the front tires got all pitted up. Yeah, low rolling or or high efficiency tires wear faster for sure. Um, and frankly, I don't think are as good. But that's a that's a that's a um automakers do not put the best tires on all of their cars unless you're looking at a performance vehicle. So, you know, they're going for the one that gets the MSRP at the right price to move move the needle. So yeah, I wonder, I actually so now I'm just sitting here wondering whether the entire like EV's go through more tires thing is just a myth and it and it's not founded, but like it is a almost universal myth in the industry, if it is. Yeah, everyone uh talks about it. There were studies about um the emissions from the rubber pellets and the rubberware. Like I remember some study that said, Oh, the gas emissions you're saving is offset by all the rubber. I didn't first of all I never knew I never knew that rubber breaking apart emitted a gas until I read that. And so that was something I learned. I just I don't believe that it's to that volume of of level, but I never knew that. So yeah, there's there's lots of stuff out there. Okay, so one of the other big changes that we frankly are already in this world, but will intensify in the coming year is the leasing as a as a sort of a way of of purchasing a new car, a new EV, right? So this is like, you know, because of the tax credit um that disappeared as of September 30th, you know, EV lease rates were through the roof, you know, uh both plug-in hybrids and battery electric, so 60, 70, 80 percent in a lot of cases. And that's you know, and those all those, the thumb on that scale isn't there anymore. How how do you expect lease rates to change over the next year um as a result of just like hey, people's preferences and what's and where the incentives are? Yeah, it's a it's a great question. It's something again going back to when we started, and I imagine how we focus on the dealer side, like this is one of the questions that dealers have, right? And we've put this in the study for a long time. And when you asked me what surprised me the most probably over the years, is how many EV uh shoppers and owners want to purchase versus lease? And it's always been really high. And and this year, when we asked, would would you rather purchase or lease? 83% of EV shoppers said I'd rather purchase the vehicle. Okay, and yet 70% of them leased it, like right? What then we but we weren't we weren't dummies. We said, Well, what if you got a great deal on a lease? Would you change your mind? 77% said they changed their mind. And that's what we saw in the market. That happened in the market. We know it happened, and now we have that number at 77%. So that's gonna go away because there's no option on the leasing that's gonna give you that great deal anymore, right? Um, now I still think if you're kind of EV hesitant, leasing is a terrific idea because you're not locked into that depreciation, right? So, all things equal, leasing for that type of buyer, maybe that plug-in hesitant person to lease, has always made sense for EVs to me. The 83% wanting to purchase is great for dealers to understand, and I think all of us to understand that EV um sales aren't gonna go off a cliff because that lease loop loophole is gone. That's not gonna that's not gonna be the driving force here. Um now, some dealers, and you're on the on the again, you got to frame your mindset for the dealership world. When someone comes in with negative equity, a lot of dealers were able to put them into an EV with that strong incentive and give them a price and a monthly payment that kind of took the sting out of losing all that negative equity they'd built up. So that lever is not gonna be there. And that that definitely sold a lot of EVs. Um, so there's things like that that I think will will knock the total number down, but just that mindset of the EV shopper wanting to purchase, um, that's not gonna be a problem for people going forward in 2026. Yeah. So um one thing I wonder is like whether, so we're gonna have a lot of people coming in over the next year or two years. A million people are gonna walk into dealerships with uh the end of the their EV lease. And, you know, I think lease rates for around luxury cars have stayed pretty high because it's sort of like you go from one lease to the next. And and I I wonder if that thumb on the scale was on there long enough to create just a higher ongoing level of leasing, because if you already had one, it's just it's easier to sort of stick with a similar monthly payment moving forward and just sort of roll from lease to lease. Do you think that there are gonna be like kind of just uh echo effects of that of that initial lease boom? When I think about the people coming in this year, I don't think they're gonna be the ones with those really dirt cheap lease rates, right? Like I think those those those people are another year or two off. Okay. Um, you know, that that was really something that that took hold in the last year or maybe year or two. Yeah. So the people coming with a lease now are probably looking at similar rates to what today is. I don't think that's gonna be a problem to move into a lease or a purchase of a new EV or any other car. I don't so I think that they're already paying$500 a month already. And so Yeah, I think I think they're they're gonna be normal, like it's gonna be a normal interaction. Next year, when the person comes in with a hundred and ninety dollar monthly payment on a EV and they see any other payment in the store to you know, it it's not gonna go well. They're they're gonna have some issues getting used to it again. It's it's kind of one of those things, like, hey, you got a great deal, it doesn't always happen. It's it's so it's like life's tough. I don't know what else to say, but but that's very hard to communicate to a to a customer coming into a dealership. Um so I think, yeah, this year, um you know it it's showing what you know, as you you we talked about earlier. Uh what did you love about that EV you had on lease that you're turning in? Do you want to give up what you loved about that EV? Because, you know, they if they choose to go to a less expensive gas model to to you know bring down the payment 20, 30, 50 bucks a month and they haven't driven a gas car in three years, it it's gonna be jarring. And you know, that that's what I think the dealers have to communicate is you know, I I understand that it's not the price that you were thinking of, but you're gonna lose what you love about an EV. Great, thank you. My I we're almost at time, so this has been an amazing conversation. My last question, I wanted to talk a little bit about perception of charging availability, because this one confounds me even more than the than the operating cost sort of like disconnect. Uh, we we've spent the last year on fast charging, sort of like build out 17,000 new fast charging ports all over the country. That's more of an increase than there was last year. So 30% more ports than are than we're out there, just total, right? And and yet gas owners in this latest survey had a lower perception of availability than they ever have when so it's diametrically opposed to the actual thing going on. How is that possible? I think it's mindset, and um, you know, the question's pretty straightforward. Like, do have you identified charging in your area and that dropped? And as you mentioned, there's should be more. So is it is it just how like thinking of that question and no, I haven't put in the legwork or I'm not gonna do a legwork. Like, so I'm not quite sure if it was how the question was asked. But then when you ask, you know, what's holding you back, um, you know, the charging infrastructure not being enough dropped. So that's not holding them back as much. It's not great. It's a quarter of them said that held them back, but it dropped a little bit. Um, so there's there's there's some good and bad. And you know, again, this is one of those times and and one of the areas of EVs where geography again makes a difference. Yeah. Because while there's more EV infrastructure in many places, uh much of it grew in certain places and not others. And you know, the infrastructure in in the in the states that aren't high EV in tenders or or volume or market share, I should say, um, they don't have a lot of infrastructure. And so it's kind of a self-fulfilling prophecy in a way. The those certain states, and I have a slide in one of my presentations, I think it's 16 states below 5% market share. And you look at those states, they are not uh readily populated with infrastructure. So um now they're also probably politically aligned not to like EVs and all those other things when you look at which 15 they are, 16 they are. But it's the those 16 states are going to be very hard to penetrate. Um, and my positive there is those 15 states or 16 states uh account for very few total sales volume. Like I think 16 states account for 15 percent of all sales in the country, these these below EV market share, these low EV infrastructure. So, you know, you gotta you can't be an automaker and say, I'm not gonna sell to all 50 states, but but um the volumes being put out in states like California and Colorado and Texas and Florida are immense, and that's where the growth is gonna be. And yes, we need to get these other states caught up on infrastructure and that will help the self-fulfilling prophecy type thing, but I'm I'm less concerned about that in a way, even though you're right, the perception number dropped really, really big. Um I think I think for these states that drive the volume, it's it's much less of a concern. Yeah. I I I want to pick a fight over the wording of that question, or actually maybe I want to re- a suggest a rephrasing the next the next time. I think that one thing I've noticed when I I hear like the objection around the the way it goes that I hear it back from dealers is I don't want to buy an Eevee because I I don't know where in my town I can I don't there aren't fast chargers in my town. There aren't chargers in my town. And I think that that is um a natural thing to so like there's this blind spot of almost all the time the charger that is in your town is your garage in your driveway, right? Like that's where you're going to be charging it. You don't actually need, you wouldn't use a charging station in your town. Yes. So I wonder whether the right way to ask this question is um, are you aware of like or how confident are you in being able to charge an EV on a road trip along the highway, you know, on the places you like to go. Um because that's really like where they will actually end up using it and being able to charge or not being able to charge, you know, versus like I know where the charger is right near me. And like it doesn't matter if there isn't one. So I don't know if that if you've guys have thought about it. Unless you're not a homeowner, right, right. Yeah, if you're not a homeowner, yeah, and I think that's that's a but that's only I mean, I I just want to say that that that percentage of people like that do not have a it's like 80% of the households in the US live in a single family home, presumably most of them with a driveway, right? Like so uh that this the the it's real multifamily charging access, that's a real deal, but it is not a majority case. Yeah, I've I've stressed that myself. And then and there is there is a that positive that we had in the study about non-homeowners, and uh I I I hadn't really thought of it, but more of the non-homeowners are now deciding to charge at work, and it went up quite a lot versus using a public network. And I thought, well, maybe that's a really good positive side effect of return to office, you know, that that it's uh it moves the needle a little bit on on uh on on uh apartment dwellers getting EVs. I'm sure that that question will evolve over time, but that's my two cents on that one. So there are so many things we don't know about where the EV market goes in 2026. Like, what's like what are one or two things that you can just set your watch by? Like, I know this will be true next year in 2026. I believe luxury EVs will perform pretty well. Um, some of the stuff we've seen from um the new Audi uh Q6 actually became one of their best sellers uh during that time period uh of the incentives. Uh and I think this new BMW, iX3, and their whole new EV system, and they BMW already really does well with EVs, um, will continue to do well. So I think on the luxury side, EVs are are gonna have a good year. And then it'll be interesting to see um how the the more affordable players um if if we get them um kind of show up. But yeah, I think on the luxury side, we're I I don't want to say it's at my watch or or put a bet on it, but I think that's that's where I'd I'd put it. Okay, fair enough. Cool. Thanks a lot for joining. Scott, thank you. Really had a good time.

SPEAKER_01 17:54

Thanks for joining this episode of Eevee Insider. Be sure to like, comment, and subscribe. And we will see you next time.