Around half of ICE vehicle owners in the U.S are considering buying a fully electric or Hybrid vehicle in the next two years according to KPMG’s consumer pulse summer 2023 survey. The survey, released on May 15,  also found 35% of those consumers expect to purchase an electric or hybrid vehicle within the next two years, with a further 28% buying within 5 years. 

KPMG found 87% of respondents are concerned about inflation, with 43% being “extremely concerned” and 72% of those surveyed are not only expecting a recession in the next 12 months, but many are also planning for it. More than half of the consumers (46%) expressed  “extreme concern” over rising gas prices. With 48% of respondents considering the switch to an electric vehicle based on rising fuel costs. 

Many consumers are tapping into their savings to compensate for higher prices. The personal savings rate as a share of disposable income dropped to 4.4% in April, the lowest since September 2008 according to the Bureau of Economic Analysis.  

The used EV market tripled in Size in Q1 2023, giving interested buyers a little more choice on dealer lots. However, the around $25K sticker price market remains small compared to the number of buyers looking for a used electric vehicle that will also qualify for the full $4,000 used EV tax credit. The number of used EVs that are potentially eligible for a tax credit sits around 30%. 

Affordability remains a barrier for many potential buyers, the Inflation Reduction Act tax credits for EV buyers may help change this, but it will take time for manufacturers to adjust their supply chains to qualify for the credit, according to KPMG’s global automotive sector leader, Gary Silberg.

KPMG surveyed 1,003 people in the U.S. on April 21-26