Gas prices are less of a factor behind consumers switching to EVs, Barclays says

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According to Barclays, citing its own credit card data for its findings, gas prices may not play as much of a factor in encouraging consumers to switch over to electric vehicles. In a note published on Tuesday, analyst Joy Zhu stated that the trend of consumers buying EVs before spending more money on gas has begun to reverse. Barclays’ study is focused on Tesla EVs, not other brands. The study found that consumers are more likely to buy an EV, even if they spend less money on fuel before the purchase. Zhu posits the idea that EV demand may be based more on financial, social, and environmental factors than fuel costs. This could result in a higher demand for EVs even if gasoline prices fall. Zhu stated that consumers who purchased EVs in previous years spent more money on gas before their purchase. This suggests that EV buyers will continue to purchase EVs even if the gas price drops. Zhu stated that “our U.S. Barclays data shows consumers with lower gasoline expenditures are more willing to purchase EVs now than before.” In recent years, EV purchasers were already spending less gas before purchasing their EV than previous EV purchasers. Zhu stated that in 2017, Tesla owners spent nearly three times as much gas than drivers who did not purchase a Tesla during the year. The analyst said that by 2023 the ratio would have fallen to 1.9 times. Recent signs of cooling In recent months, the EV market showed some signs of cooling. The market leader Tesla reported that vehicle deliveries fell by 7% in the third quarter, compared to the previous quarter. In response, the company slashed its prices for both the Model 3 & Model Y again in an effort to boost demand. Volkswagen, who has increased its EV offerings over the past few years, has slashed production of ID3 and Cupra Born and no longer plans to build a new plant in Germany. Despite any bumps in the road, it seems that the total demand for EVs will continue to grow. Volvo reported on Thursday that global sales of electric vehicles increased by 52% last month compared to 2022. Volvo’s sales in the U.S. increased by 631% from September 2022 until September 2023. TSLA mountain Performance of Tesla’s shares over the past 12 months. Michael Bloom, CNBC’s Michael Bloom, contributed to this article.