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Consumers Show High Interest in Buying Electric Cars, But Reluctant About Price
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Consumers Show High Interest in Buying Electric Cars, But Reluctant About Price

A new survey from The Nielsen Company shows that the majority of U.S. and U.K. consumers would consider purchasing an electric vehicle – a car powered by a battery-operated, electric motor instead of just a gasoline engine. However, many consumers are suffering from sticker shock when they discover the price of driving a “green” car.

When asked if they would be willing to pay more for an electric car than the cost of a conventional car, 65% of U.S. consumers said they did not want to pay more for electric cars. In the U.K., more than three-quarters (76%) were unwilling to pay more. Of those who accepted the price differential, slightly more than half of consumers in both countries (51% U.S., 57% U.K.) said they would not be willing to pay more than $5,000 above the average price of a standard vehicle.

“Although electric cars have been around for a while, big car manufacturers like Chevrolet and Nissan have been ramping up their advertising efforts recently as they get ready to introduce their new offerings – the Chevrolet Volt and Nissan Leaf,” said Sallie Hirsch, SVP of Research for Nielsen’s automotive unit. “There are some obvious challenges, such as the higher cost of electric cars, that advertisers will need to navigate as they develop their marketing campaigns, but the overall interest shown by consumers in this survey is promising. As electric vehicles are brought further into the mainstream and begin gaining in popularity, the cost will likely come down and many of the other challenges will be addressed as well.”

Through its advertising effectiveness and engagement tools, Nielsen has begun measuring the new national TV ads that debuted last month for the Nissan Leaf. The Leaf ads are part of Nissan’s new “Innovation for All” campaign, which has been gaining traction across Nielsen’s key resonance metrics for recall and likeability.

The increase in advertising is a sign of a rebound in the auto industry, which has struggled amidst the prolonged recession and weak consumer confidence. Of the top 20 product categories in U.S. ad spending, the largest growth in the first half of 2010 was seen in automotive as auto sales began to improve. According to Nielsen, in the first six months of the year, more than $42 million was spent in the U.S. advertising the Chevy Volt and Nissan Leaf brands. Overall, $3.5 billion was spent on auto advertising in the first half of 2010, up 27% over a year ago. The increased automotive advertising was driven largely by spending by Chevrolet parent company, General Motors, which was up 95% over last year.

Despite modest improvements in consumer confidence and a resulting boost in car sales, Nielsen’s survey on electric cars, which was conducted in September among more than 2,300 people in the U.S. and U.K., also showed that inflated gas prices continue to weigh on the minds of recession-weary consumers when considering the purchase of a new car. In fact, despite the global push towards choosing more fuel-efficient and environmentally-friendly cars, 78% of consumers in both the U.S. and U.K. said their main reason for wanting to buy an electric car was to “save on fuel costs.” Helping the environment ranked second on consumers’ list of priorities. While more UK consumers (70%) than U.S. consumers (63%) were likely to cite the environment as a reason for going electric, U.S. respondents were 60% more likely than their U.K. counterparts to say they would buy electric to support the companies making the vehicles.