Everything You Need To Know About J.D. Power’s EV Index

Episode Highlights:

 

(0:00) – Introduction

(0:37) – Episode beginning

(0:56) – Elizabeth’s background

(2:58) – How is the EV Index is helping the auto industry and consumers

(7:53) – Total cost of ownership for EVs

(9:35) – How can consumers learn more about the EV Index?

(10:54) – Some misconceptions about EVs

(14:15) – Episode wrap-up

Links

Connect With Elizabeth Krear

Check out J.D. Power’s E-Vision

Transcript

Elena: Elizabeth is here from JD Power. And I am so honored and humbled that you have taken the call and that you are on the show today. Elizabeth, how are you this afternoon?

Elizabeth: I’m doing great. And thank you. It’s my pleasure to be here. It was so great to meet you last month at the Auto Summit.

Elena: Let’s talk about your background, your career in automotive just so the listeners are up to speed.

Elizabeth: Okay, sure. Thank you. I spent my career in the automotive industry aka the many different names of Chrysler, you know, most recently Stellantis, I’ve always been passionate about the auto industry. I think of vehicles as the ultimate consumer good. They provide the ability to go anywhere and do anything. I’m an engineer by training. I have an undergraduate and master’s degree in mechanical engineering. So I started my career at Chrysler 30 years ago, and I quickly realized that I ultimately wanted to oversee the entire vehicle. So I spent the first 20 years preparing for a chief engineer role, you know, preparing myself both technically understanding the engineering from bumper to bumper, but also the process development standpoint, meaning, you know, the true understanding of what it takes to bring a vehicle to market from concept through launch. Ultimately, I landed as the chief engineer for the Rams 1500 full size pickup truck. And then a few years later, I moved over to Jeep where I was the chief engineer for the iconic Wrangler, and Jeep Gladiator. So talk about vehicles that can go anywhere and do anything. Electrification is the biggest technological disrupter that the auto industry has seen, at least in my career, and I wanted a front row seat not only to watch the transition, but to be a part of providing all the stakeholders who are investing billions of dollars with the critical and dynamic data needed to make decisions during the electrical transformation. So hence, I’m thrilled to be running the electric vehicle practice at JD Power.

Elena: That is an amazing story. Elizabeth, let’s talk about the JD Power EV index. I know that this was the big announcement that was unveiled at the JD Power summit back in January. So the question I have is, how is it helping both the automotive industry and consumers in this transition from internal combustion to evey, what are your thoughts there? That’s a big question.

Elizabeth: It is a big question. It is two questions. One is what is it and then the other is how can it be used to really help the transition? So let me try to break it down. In the simplest terms, the Evie index tracks the transition from ICE to EVs, and when the index reaches 100, then parity has been achieved. Now the index currently has a score of 47. So we’re about halfway there. There are six factors that make up this top line number. And think of these factors as barriers that need to be overcome for true adoption. So although the top line number is slow to change, we see a lot of dynamics in the underlying six factors. So what are they? The first one is interest. Our new vehicle shoppers interested in EVs. We survey over 2000 new vehicle shoppers every month, and we monitor their online shopping behavior. Today, three out of 10 new vehicle shoppers are very likely to consider an Eevee for their next vehicle purchase. The second factor is availability and this is an important one. We define availability relative to meeting customer needs. So for example, up until a year ago, there were no AV trucks available and very limited SUVs, and these two segments make up over 80% of new vehicle sales. So for these customers there were no substitute choices available. But over the past year, the availability of EVs has almost doubled. And in the next two years, we see this number doubling again by 2025 70%. of new vehicle shoppers will have an Eevee substitute to ice. The third factor is affordability. Are EVs affordable, or are they as affordable as their ICE counterparts? You know, in this case, we look beyond the price of an Eevee and we look at the total cost of ownership of owning an EV over a five year period or leasing an Eevee over a three year lease period. And we see this new standard as approaching parity with ice. The score is currently at nine but there’s a lot of moving components there. The fourth factor is infrastructure and infrastructure. You know, is it in place to support adoption and that’s the key here and we look not only at supply versus demand, but we also look at the location of charging and the speed of charging. And we have the ability to drill down the infrastructure score by zip code. So we can differentiate between urban and rural areas. And frankly, infrastructure is an area that is falling behind. Even though billions of dollars are being invested in the infrastructure is just not keeping up with the pace of Evie adoption. The number of EVs on the road last year increased by 46% but infrastructure growth only increased by 26%. The fifth factor is experience. So how does the EV ownership experience compare to ICE? And here we compare the vehicle model level sales and service experience initial quality and reliability. We look at the overall appeal and even the range of EVs compared to ice. Overall, EV experience is very positive with a score of 89. So quickly approaching parity with ice in general EVs outperform ice and appeal. Customers love the driving performance of an Eevee with the quick torque off the line, the quiet smooth ride, as well as the interior and the exterior styling. And that reminds me just this morning, we released our EV ownership experience awards so hot off the press. The Rivian R1T was the highest rating EV in the premium segment breaking the two year straight from Tesla.

Elena: Well, congratulations to Rivian I’ve had a good run but and it’s so ironic. I was just out taking my dog for a walk and I saw a rivian and I was like I think that is literally the first rivian I’ve seen in New Jersey but no, that’s great. And also going back to one of the factors that you had mentioned about total cost of ownership. I find that to be really fascinating. Can you talk a little bit more about total cost of ownership because I think it’s a big consideration.

Elizabeth: While it’s true that in general the transaction price of an Eevee is more expensive than its eyes counterpart. There are a myriad of incentives that offset this cost. Now, you you mentioned the cost of gas. The biggest one is that the federal tax incentives need $7,500 And in addition to the federal tax instead of there’s several state and local credits also that can offset the price. So Oregon for example, they offer $4,800 tax credit, you know you couple this with the $7,500 that’s north of $12,000 of savings off of that sticker price, New Jersey, they don’t charge sales tax and then the cost to maintain that you mentioned simply because the cost of electricity is a fraction the cost of gasoline. And for a lot of people who drive a significant number of miles that adds up to hundreds of dollar, hundreds of dollars a month. And furthermore, several utility companies offer rebates for the implementation of a home charger and then also discounts for Time Of Use charging. So when all these variables add up, that’s how we get to that score of 89. I mean as a whole approaching parity with ICE, but there are some specific vehicles that have exceeded parity with ICE.

Elena: That’s so so interesting. I threw two parts of a very large question at you at once but the other part about is how the JD Power EV index is helping both the automotive industry and consumers.

Elizabeth: So we will be releasing to the you know the media, what the index score is what the key drivers are from month to month. But we think of this index really is a tool to help the industry. So while there’s tremendous value in each of the factors to monitor each one on the path to true adoption, there’s tremendous value when you look at the interdependencies between them. So for example infrastructure, let’s say that it’s trailing in Texas. And that’s a top adaption state for pickup trucks. So this can affect whether consumer purchases in evey for their next truck. So it’s important for the automakers to also keep up with the consumer might be aware of that infrastructure score. Or they just might be aware of infrastructure in general based on where they live, you know, they tend to do some of the research. But the automaker also needs to know at that zip code level. How is it keeping pace to make sure that the vehicles that resonate with consumers in those areas are available in the infrastructure is keeping up with that pace of adoption?

Elena: Just switching gears a little bit listening about misconceptions. I would love to hear this from your perspective and your point of view. What are some of the biggest misconceptions around electric vehicles that you’re hearing just in your day to day work?

Elizabeth: Yeah, I think the biggest misconception is that one we talked about with affordability. consumers think I can’t afford an EV but when you break it down into that total cost of ownership equation, it becomes affordable. Another one is the charging story. So while it’s true that there’s a growing concern for reliability, we see that in the news chargers are unreliable 20% of the time customers get to a public charger and they can’t charge for one reason or another. What we forget about is that you know and what’s get lost in the translation is that over 85% of EVs owners charge at home so they wake up to a full charge every morning. So it really becomes a question of exceptional use cases versus everyday use. So we ask EV owners what range is required to not have to change your driving behaviors and habits? And the answer is 263 miles for mass market consumers that is far lower than many EVs on the road today.

Elena: It is it absolutely is so interesting.

Elizabeth: Yeah. Another one so I want to go back to that. You know, I love trucks, and probably because I worked on them for so long. I want to go back to that evey truck owner. A year ago, no trucks in the market now all the main names that have either trucks available or soon to launch trucks. And one of the questions that we often get is how does the range of EVs perform while towing? Okay. So I mentioned earlier that we released our EV ownership experience results this morning, and one of the big changes that we made in the survey from last year to this year in anticipation for all of the trucks entering the Evie marketplace was probing more deeply on the towing experience of an EV. And what we found is that the satisfaction of battery range was higher among owners who tell than owners who don’t tell. And then we also said, Well, what’s your accuracy of stated battery range? In other words, the automaker will say this is what the range should be in. Sometimes people experienced different ranges again, the satisfaction was higher among people who tell the people who don’t tell. And so I think this speaks directly to the difference between the anticipation or expectation versus the reality of owning an EV. And that’s something that we’re monitoring every step of the way.

Elena: Yes, absolutely. Well, I have had my mind blown a couple of times during this chat that we’re having today. I can’t believe that towing stat that’s just

Elizabeth: and one more thing, that is going to blow your mind, as part of this morning’s release 96% of EV owners say that they would buy an EV again. So that’s up six percentage points from last year.

Elena: Elizabeth, thank you so much for your time. I know that I’ll see you in April at the Automotive Forum in New York. That’ll be so much fun. So in the meantime, I would love for the listeners to know where they can learn more about the JD Power EV index, as well as where they could reach out to you if they want to connect.

Elizabeth: That’s all on the J.D. Power business website. So just toggle to the EV section. E- vision is what we call it and we’ve got all of our information posted there.

Elena: Perfect, excellent. Elizabeth, this has been amazing. Again, thank you so much for your time. I know you were so busy traveling a lot. So I appreciate you and I appreciate all the insights that you’ve brought to the show. Thank you so much for your time.

Elizabeth: Thank you, have a great day.