Author: Johan Moreno

JD Power Revises EV Retail Share Forecast

E-Vision Intelligence Report
August 2024

Key Findings

• Near-Term EV Forecast Revised Down: JD Power has revised down its 2024 and 2025 EV market share forecast, projecting 9% total EV market share in 2024, which translates to approximately 1.2 million in sales of battery electric vehicles (BEVs), excluding plug-in hybrids (PHEVs) and hybrids (HEVs). The 2024 EV forecast was revised down from 12%. Longer term, JD Power projects annual EV sales volumes will reach 36% market share by 2030 and 58% market share by 2035.
• Growth of PHEVs, Lingering Concerns About Public Charging Create Hurdles to Adoption: While 60 different EV models are now available, the number of PHEV options has also grown considerably, reaching 45 models and accounting for 1.8% of total sales. The growth of PHEVs has created additional substitutes for gas-powered vehicles and increased competition for EVs. The other persistent headwind on EV sales has been consumer concern with public charging infrastructure.
• Incentives, New Models and Returning Lessees Could Spark More Growth: EV affordability and availability scores have been improving for two consecutive months, with current tax incentives and lease deals making EVs more affordable than their gas-powered counterparts, in many categories. Continued improvements in overall accessibility of EVs and increased volume from returning EV lessees—94% of whom say they are likely to consider another BEV—are likely to drive a surge in EV sales volume during the next two years.

Executive Summary

Welcome to the messy middle of the EV evolution. As manufacturers continue to refine their go-to-market EV strategies, offering an increasingly varied mix of powertrains ranging from HEVs to PHEVs to BEVs, the adoption curve continues to grow but in a less predictable, more volatile fashion. Overall, BEV sales are up 35,000 units through July 2024, and while that is a clear sign of continued momentum, it is a slower growth rate than previously expected. In this report, we’ll discuss how this trend has affected our EV sales forecast and dive into the data to better understand the dynamics at play in the current market.

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from JD Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

EV Market Share Forecast Revised Down

Based on the current mix of EV interest, availability, adoption, affordability, infrastructure and customer experience metrics tracked each month at JD Power, we are projecting total EV market share will reach 9%, or 1.2 million units, by the end of this year. That forecast is revised down from 12% in January 2024, based on a slower-than-expected growth rate for the first half of the year.

Longer term, we are projecting EV sales will reach 36% of the total U.S. retail market by 2030 and 58% by 2035. The current rate of slower-than-expected sales volume is being driven by a combination of relatively near-term variables that will fade as EV adoption continues to reach critical mass.

Consumers Confront Mixed Signals

One major driver of the slower-than-expected EV growth rate in the first half of this year has been increased competition in the market for gasoline-powered vehicle alternatives. While HEVs and BEVs currently account for the lion’s share of sales in this category at 8.6% and 8.4%, respectively, PHEVs have recently gained more widespread attention and now account for 1.8% of retail sales. That’s up from just 0.6% in 2020 across 45 different models that are now available. However, while PHEV sales have been increasing recently, JD Power customer satisfaction data suggests this surge in interest may be temporary. PHEVs score significantly lower than BEVs in nine of the 10 categories tracked in the JD Power 2024 U.S. Electric Vehicle Experience Ownership Study, particularly when it comes to battery range and total cost of ownership.

The other headwind on EV sales has been ongoing consumer concerns with public charging infrastructure. According to the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Public Charging Study,^SM the ease of home charging is the most satisfying single aspect of the EV ownership experience and public charging availability is the least-satisfying aspect. However, customer satisfaction with both Level 2 and DC Fast Charging segments has improved for two consecutive quarters—a first for the study which is in its fourth year. As public charging infrastructure continues to improve, this headwind to EV adoption should dissipate.

Expect an EV Inflection Point

EV availability and affordability metrics have continued to improve for the past two months as a surge in new mainstream models rolls out nationwide. Currently, 66% of new-vehicle buyers have a viable EV alternative available to them and, in many cases, EVs are now less expensive to own than their gas-powered counterparts.

One important detail in current EV sales volumes is the extraordinarily high proportion of leasing activity. Due to tax incentives introduced under the Inflation Reduction Act, which allow the $7,500 Clean Vehicle Credit to pass through on leased EVs, 86% of premium BEV transactions (excluding Tesla) are leases. Similarly, 72% of mass market BEV transactions are leases. Conversely, only 11% of Tesla transactions are leases. When these leasing customers return to market, we expect a significant surge in new EV volumes, especially from traditional franchise dealers. Currently, 94% of current BEV owners say they are likely to consider another BEV for their next vehicle, according to JD Power data.

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index, the JD Power EV Retail Share Forecast, the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Ownership Study,^SM the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study^SM and the JD Power U.S. Electric Vehicle Consideration (EVC) Study.^SM The JD Power EV Index is an analytics tool to benchmark the growing EV market in the United States. It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with gas-powered vehicles in the U.S. Each month, the JD Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace.

Find out More

This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The JD Power E-Vision initiative is a company-wide program focused on maximizing JD Power industry-leading EV data, analytics, insights and solutions. Please contact us at the numbers below to connect with the authors or to learn more about the underlying research.

Media Contacts

Shane Smith; East Coast; 424-903-3665; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

It’s a Buyer’s Market for EVs. Where are the Buyers?

E-Vision Intelligence Report
June 2024

Key Findings

• EVs More Widely Available and Affordable Than Ever: The majority of premium (70.1%) and mainstream (55.7%) vehicle buyers now have a suitable electric vehicle (EV) option available in the marketplace and the prices for these vehicles has never been lower. The average total cost of ownership (TCO) for a premium EV fell to $62,600 in May and the average TCO for a mainstream EV is now $58,100. In many cases, EVs are now more affordable than their gasoline-powered counterparts.
• EV Consideration and Adoption Stalled: Overall, 59.5% of new-vehicle shoppers say they are either “very likely” or “somewhat likely” to consider buying an EV in the next 12 months, a slight increase from April (58.2%), but down from the highest levels observed in the fourth quarter of 2023. Real-world EV adoption rates have been flat at 8.4% since March 2024.
• Next Several Months Pose Critical Test for Mainstream Consumer Demand: Two major impediments to widespread mass market EV adoption have been a significant price premium vs. comparable gas-powered vehicles and a notable lack of vehicle options in the mainstream market. During the past two months, both of those trends have shifted sharply, with major mainstream launches and trim expansions planned during the next several quarters. Consumer response to these changing market dynamics during the next several months will be a key indicator of future EV demand.

Executive Summary

It’s become impossible to ignore the rising tide of negative sentiment about consumer demand for EVs.  But when we look deep into the data on EV market dynamics, consumer sentiment and infrastructure development, we find that it is still too early to say exactly how shoppers will respond to major new improvements in EV affordability and availability. The next several months will be critical in shaping that longer-term forecast.

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from JD Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

EV Availability and Affordability Surges

The EV market has skewed premium since its inception, and that is still the case. Tesla, a premium brand, accounted for 50% of all EVs sold in the U.S. in May, and 70.1% of premium vehicle buyers currently have a comparable EV option available. In addition, many premium EVs are now more affordable than comparable gas-powered vehicles. But that dynamic is starting to shift into the mass market, as well. In fact, mainstream EV availability has surged considerably since March 2024, with 55.7% of mainstream buyers now having a viable EV option. A combination of manufacturer incentives and growth of lower-priced trims in existing EV models is driving this surge. Additionally, new mainstream models in the popular crossover SUV segment are coming to market, meeting more consumers’ needs, including the Honda Prologue and Chevrolet Equinox EV.

When it comes to affordability, mainstream EVs are now just $1,500 more expensive, on average, than their gas-powered counterparts. That gap has shrunk from a high of $8,400 in May 2023. When looking at specific models, in many cases, EVs have become considerably cheaper than gas-powered vehicles. The Ford F-150 Lightning, for example, now has an average customer-facing transaction price (CFTP) of $53,494 after federal tax credits, which is $5,073 cheaper than the average CFTP of a gas-powered F-150.

Mainstream Affordability

Premium Affordability

Demand Stalls

Despite these recent improvements in affordability and availability, total EV industry market share has been largely flat for the past three months, currently accounting for 8.4% of total vehicle sales. When it comes to consumer sentiment, 59.5% of new-vehicle shoppers say they are either “very likely” or “somewhat likely” to consider buying an EV in the next 12 months, a slight increase from April (58.2%), but down from the highest levels observed in the fourth quarter of 2023.

Digging deeper into those numbers, we find that the month-over-month increase in EV consideration is being driven by vehicle shoppers who say they are “very likely” to consider an EV. Conversely, the percentage of vehicle shoppers who say they are “very unlikely” to consider an EV is trending down.

EV Retail Share 

Mainstream EV Adoption: Still in the Early Days

While it is tempting to read these data points as an indication of waning consumer interest in EVs, it is important to keep perspective of the larger context of the transformation currently unfolding in the automobile industry. The industry is at a tipping point in the evolution of the EV market, whereby the initial influx of premium vehicles that appealed largely to early adopters is now giving way to more mainstream models designed—and priced—for a mass-market audience. Importantly, this is only the third consecutive month that we’re seeing an improving trend toward mainstream affordability and availability.

The next several months will be critical to watch as mainstream EV models are being offered at steep discounts when compared with comparable gas-powered models. Once the barriers of cost and availability are no longer a factor in the EV purchase equation for consumers, the focus will shift squarely to driving and charging experience as the true gauges of consumer sentiment in the EV market.

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index, the JD Power EV Retail Share Forecast, the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Ownership Study, the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study and the JD Power U.S. Electric Vehicle Consideration (EVC) Study. The JD Power EV Index is an analytics tool to benchmark the growing EV market in the United States. It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with gas-powered vehicles in the U.S. Each month, the JD Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace.

Find out More

This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The JD Power E-Vision initiative is a company-wide program focused on maximizing JD Power industry-leading EV data, analytics, insights and solutions. Please contact us at the numbers below to connect with the authors or to learn more about the underlying research.

Media Contacts

Shane Smith; East Coast; 424-903-3665; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

Are New Lease and Financing Deals Enough to Pull Mass Market Shoppers into the EV Market?

E-Vision Intelligence Report
April 2024

Are New Lease and Financing Deals Enough to Pull Mass Market Shoppers into the EV Market?

Key Findings

• Mass Market Shoppers Have Highest Level of Interest in EVs: The number of new-car shoppers who say they are “very likely” to consider an electric vehicle (EV) for their next purchase is highest among those with median household incomes under $150,000. But at $59,560, the current average Manufacturer Suggested Retail Price (MSRP) for EVs is $2,227 more than comparable gas vehicles. That said, federal government and manufacturer incentives are quickly chipping away at the gap. Incorporating those variables, the average customer-facing transaction price for EVs is only $83 higher than comparable gas vehicles.
• Lower Total Cost of Ownership Boosts EV Affordability: When total cost of ownership—which includes all predicted costs required to purchase and maintain the vehicle throughout the full ownership period—is factored into the equation, EVs are now more affordable than comparable gas vehicles. The surge in affordability is not only driven by tax credits and charging incentives, but lower operating costs and improved residual values for 2024 model-year Tesla vehicles.
• Pent-Up Demand Growing Among New-Car Shoppers: While EVs and comparable gas vehicles are similarly priced, all vehicle prices have risen since many shoppers were last in the market. The average vehicle trade-in age has climbed to 6.2 years in 2024, up from 6.0 in 2023 and 5.6 in 2022. The last time these shoppers were in the market, the average transaction price was $32,496. Today, average monthly payments are $271 higher for gas vehicles and $345 for EVs. But as dealers and manufacturers introduce new sales incentives to lower payments, there could be an increase in sales.

Executive Summary

Cars have gotten really expensive. While the average new-vehicle retail transaction price is down 3.6% from the highs seen in March 2023, new-vehicle shoppers are still looking at an average transaction price of nearly $54,000 in the most popular segments. For EVs, that number swells to $57,637 before federal tax credits, and $53,816 after federal tax credits. Now, however, as these sky-high valuations have helped create a build-up of inventory, automakers are starting to lower prices and introduce incentives to spur sales. Will they be enough to get more mass-market shoppers into EVs?

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from JD Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

Mass Market Hungry for EVs

It is no secret that early EV adopters were largely affluent, progressive consumers who could afford the six-digit price of entry for a Tesla Model S. But the dynamics of consumer demand are starting to shift. In terms of absolute volume, the number of new-vehicle shoppers who say they are “very likely” to consider an electric vehicle (EV) for their next purchase/lease is highest among those with median household incomes under $150,000 (see chart below).

EVs Getting More Affordable

While overall transaction prices for EVs are considerably higher than comparable gas vehicles, EV affordability is starting to improve, driven by several factors. First, EVs require less maintenance and, on average, cost $900 less to operate throughout the full ownership window. In fact, according to the JD Power EV Index, which evaluates EV affordability based on total cost of ownership for three-year lease and five-year purchase time frames, EVs are now more affordable than comparable gas vehicles.

Tax credits and steep discounts, along with incentives from manufacturers, are helping to drive down EV prices. Tesla, for example, which accounts for 56% of all EVs sold in the United States, has seen its affordability score improve 5 points (on a 100-point scale) in the JD Power EV Index, driven by better residual values and a relatively high purchase mix. Interestingly, while Tesla has been categorized as a premium brand due to the average sale prices of its vehicles, demographics of the average Tesla owner are tilting heavily toward the mass market buyer. As noted in the table below, 46% of current Tesla owners have household incomes of $150,000 or less, which is nearly double the number of other premium EV brands.

Industry-wide, EV buyers are seeing discounts of 3.2% off MSRP, excluding the federal tax credit. When the tax credit is included, EV buyers see discounts of 9.6%, which is notably more than gas-vehicle buyers in comparable segments, which see a 6.3% discount, on average.

Cash on the Sidelines

Another important factor helping to influence recent trends in consumer demand for EVs is the dramatically increased cost of entry of all vehicles—particularly among buyers who last purchased or leased before the start of the pandemic, when inventory and incentives were historically high. Shoppers returning to market in 2024 are paying, on average, about $600 per month for their vehicles. From that $600 baseline, the average jump to a new gas vehicle in a comparable-EV segment is $271, for a total outlay of $871 per month. For an EV, the gap is even higher at $345, for a total monthly outlay of $945.  But when comparing the total cost of ownership between new EVs and comparable gas vehicles, including state tax incentives, charging incentives and lower operating costs, the average monthly outlay is $31 less expensive.

Even so, given the heavy dose of upfront sticker shock in general, many shoppers are holding onto their existing cars longer. The average vehicle trade-in age has climbed to 6.2 years in 2024, up from 6.0 in 2023 and 5.6 in 2022. This has created considerable pent-up demand in the marketplace, which could shake loose with the introduction of competitive sales incentives addressing both high prices and high interest rates.

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index, the JD Power EV Retail Share Forecast, the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Ownership Study, the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study and the JD Power U.S. Electric Vehicle Consideration (EVC) Study. The JD Power EV Index is an analytics tool to benchmark the growing EV market in the United States. It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with gas-powered vehicles in the U.S. Each month, the JD Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace.

Find out More

This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The JD Power E-Vision initiative is a company-wide program focused on maximizing JD Power industry-leading EV data, analytics, insights and solutions. Please contact us at the numbers below to connect with the authors or to learn more about the underlying research.

Media Contacts

Shane Smith; East Coast; 424-903-3665; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

VIDEO: Financial Services Intelligence Update — February 2024

Miles Tullo shares the results of the JD Power Buy Now Pay Later Satisfaction Study and surprising details on brands, like American Express, Affirm, AfterPay, Zip, and PayPal.

JD Power 2024 U.S. Buy Now Pay Later Satisfaction Study

The JD Power 2024 U.S. Buy Now Pay Later Satisfaction Study is a syndicated benchmarking study profiling the experiences of Buy Now Pay Later customers in the United States.

This study identifies the dominant factors that drive customer satisfaction with Buy Now Pay Later lenders.

View all the study details

Miles Tullo 

Miles Tullo is the Managing Director for the JD Power Financial Services team. He oversees the company’s consumer payments program, focusing on point-of-sale choice and non-credit card payment methods. Drawing from over 20 years of experience in both payments and mortgage lending, Miles brings valuable expertise to clients. 

Follow Miles on LinkedIn  

EV Sales Volume Grew 50% in 2023; Can Trend Continue?

E-Vision Intelligence Report
February 2024

EV Sales Volume Grew 50% in 2023; Can Trend Continue?  

Key Findings

• EVs Accounted for a Significant Portion of Retail Growth in 2023: Industry-wide, automobile sales and lease retail volumes rose 8% in 2023 from 2022, totaling approximately 13 million units. With roughly one million in total volume for the year, EV sales and leases grew 50%, while gas-powered vehicles grew 2%.
• Mainstream EV Availability Continues to Lag: The JD Power EV Index availability score for premium market EVs has climbed to 75.1 (on a 100-point scale), which means that more than three-fourths of premium market buyers currently have a viable EV alternative to comparable gas-powered vehicles. In the mass market, however, the availability score is just 33, which means that one-third of mass market buyers have a viable EV alternative. That number has declined from 37.5 in July 2023 as manufacturers have struggled with production delays.
• JD Power EV Market Share Forecast Revised Down for 2024: JD Power has revised its EV market share forecast down 0.8 percentage points to reflect delayed vehicle launches, production issues, restrictions associated with the Clean Vehicle Credit, slowing adoption patterns in some states and plateauing shopper interest driven largely by concerns about public charging. Our current forecast is 12.4% EV market share in 2024, with new EV market share projected to top the 50% mark in 2031.

Executive Summary

While some EV-related news coverage has taken a pessimistic tone recently, the data on EV sales and lease volumes for 2023 is telling a much different story. In fact, EV sales grew 50% year over year in 2023, accounting for 37% of total auto sales growth in the United States. Sales of gas-powered vehicles, by contrast, rose just 2% for the year. The EV marketplace is still facing headwinds, however, as a combination of production delays, a notable lack of mass market vehicles and complicated tax credits are keeping the segment firmly entrenched in the early adopter phase.

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from JD Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

One Million Reasons Why EVs Are Important to Manufacturers

EVs were a significant contributor to the overall growth rate of the automobile industry in 2023. All told, the industry sold approximately 13 million units last year, up 8% from 2022. Within that total were more than 10 million gas-powered vehicles and one million EVs. While gas-powered vehicle sales rose 2% in 2023, EV sales were up 50% over the previous year, ultimately accounting for 37% of the industry’s total growth rate.

The biggest contributors to the overall EV growth rate in 2023 were Tesla (56%), BMW (8%) and Mercedes-Benz (7%).

 

Mass Market Availability Lags Premium Market

One of the central challenges keeping EVs from significant growth in the mainstream marketplace is a notable lack of availability of mass market vehicles. The JD Power EV Index availability score tracks the percentage of shoppers with a viable EV alternative to a gas-powered vehicle by evaluating a range of criteria including vehicle type, price point, origin of manufacture and other variables. Based on these variables, premium market shoppers have a lot more EV options than mass market shoppers.

In the premium vehicle segment, availability climbed steadily during 2023, reaching a high of 75.1 in December, meaning that 75% of buyers in the market for premium vehicles have viable EV alternatives from which to choose. In the mass market segment, however, availability trended down in 2023, with just 33% of mass market shoppers currently able to purchase an EV that checks all the boxes that a gas-powered vehicle would.

2024 EV Sales on Track for 12.4% Market Share

The decline in mass market availability has been driven by a confluence of factors that includes manufacturing delays (e.g., the GMC Sierra and Chevrolet Equinox EVs); production cuts (e.g., those initiated by Ford with its F-150 Lightning); continued complexity surrounding Clean Vehicle Tax Credits; and slowing adoption rates in numerous states, a dynamic to which stagnating shopper interest and concerns about public charging are contributing.

Regarding Clean Vehicle Credit, starting in 2024, eligibility requirements have tightened and now include new restrictions surrounding battery and component manufacturing. Specifically, at least 60% of a vehicle’s battery components must be produced or assembled in America and 50% of minerals used in the battery must be extracted from a free-trade agreement country in order for vehicles to qualify for the full tax credit. These restrictions are negatively affecting overall EV availability, particularly in the price-sensitive mainstream marketplace where vehicles such as the Ford Mustang Mach-E, Nissan LEAF and Chevrolet Blazer EV no longer qualify.

Accordingly, JD Power has revised down its EV sales forecast by 0.8 percentage points to 12.4% market share for calendar year 2024. At this rate, we project new vehicle EV market share to top 50% in 2031. The strongest growth is anticipated in California, but will vary significantly state to state.

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index, the JD Power EV Retail Share Forecast, the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study and the JD Power U.S. Electric Vehicle Consideration (EVC) Study. The JD Power EV Index is an analytics tool to benchmark the growing EV market in the United States. It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with gas-powered vehicles in the U.S. Each month, the JD Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace.

Find out More

This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The JD Power E-Vision initiative is a company-wide program focused on maximizing JD Power industry-leading EV data, analytics, insights and solutions. Please contact us at the numbers below to connect with the authors or to learn more about the underlying research.

 

Media Contacts

Shane Smith; East Coast; 424-903-3665; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

Customer Satisfaction with Digital Wallets Continues to Grow as Usage Skyrockets

Banking and Payments Intelligence Report
March 2024

Digital wallets are now the fastest-growing payment method in the United States, with almost half (48%) of U.S. consumers indicating that they have used a digital wallet in the past 90 days, up 12 percentage points from 2023, according to JD Power data. What’s driving this surge in adoption and how will it all play out for the major players in the space?

This Banking and Payments Intelligence Report dives into the findings of the JD Power 2024 Digital Wallet Satisfaction Study to spotlight emerging trends and important shifts in consumer sentiment with digital wallet brands.

Satisfaction Increasing with Frequency of Use

Remember when cash was king? Now, convenience is the top driver of payment method choice and that’s causing consumers to increasingly turn to digital wallets for all types of transactions. Overall customer satisfaction with digital wallets is up 4 points (from 660 to 664, on a 1,000-point scale), according to the JD Power 2024 Digital Wallet Satisfaction Study, and the top factor driving that increase is ease of use, both online and in-person.

As a result, consumers are using digital wallets more frequently than ever. Overall, 48% of consumers have used a digital wallet in the past 90 days. Among those, 40% have used PayPal; 28% have used Apple Pay; 22% have used Venmo; and 19% have used Cash App Pay. Among more frequent users who access their digital wallets at least once a month, Venmo and Cash App Pay are seeing the highest overall customer volume. However, within the subset of digital wallet power users, who are using these services at least five times per month, Apple Pay is the most frequently used service.

A Market Ripe for Competition

While digital wallet usage rates and satisfaction scores are both going in the right direction, the industry is far from mature and gaps exist for new entrants. Chief among these gaps is inconsistent merchant acceptance. As we saw in the JD Power 2024 Merchant Services Satisfaction Study, only 57% of small businesses now accept digital wallets (94% accept cards) and some large merchants are still not wallet enabled in-store. Some wallets can only be used for online purchases while others can only be used in-store. And, no wallets are universally available at accepting merchants the same way that cards are.

The lack of perks associated with digital wallet providers, such as rewards programs or merchant discounts, is also a problem. Among the most important drivers of customer satisfaction with digital wallet providers, such as ease of use and security of account information, scores are lowest for perks. These gaps mean that customer loyalty is hard to secure in this space, with just 34% of customers indicating that they “definitely will not” switch brands.

Watch This Space

In the near-term, we expect digital wallet usage to continue to grow rapidly, outpacing other methods of payment at the point of sale, by virtue of its ease of use and its privileged position in the center of consumer lives in smartphones and online. It is noteworthy, for example, that the percentage of people who say they prefer to use digital wallets for online and mobile purchases rises 5 percentage points and 6 percentage points (from 12% to 17% and 22% to 28%, respectively) in 2024. As online and mobile continue to be the channels of choice for so many consumer transactions, digital wallets are certain to benefit from that volume.

Merchant acceptance will continue to grow. Seventy-nine percent (79%) of small businesses have a favorable impression of digital wallets, calling out fast transaction speed and customer demand as the primary attributes of the payment method, and traditional large merchant holdouts continue to convert as demand increases.

Find out More

This Banking and Payments Intelligence Report is based on responses from the JD Power 2024 Digital Wallet Satisfaction Study, which included 3,957 responses and was fielded from September-November of 2023. It is authored by Miles Tullo, Managing Director of Financial Services. Please contact us at the numbers below to connect with Mr. Tullo or to learn more about the underlying research.

Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

EV Consideration Trends Down for Fourth Consecutive Month as Public Charging Experience Continues to Deteriorate

E-Vision Intelligence Report
March 2024

EV Consideration Trends Down for Fourth Consecutive Month as Public Charging Experience Continues to Deteriorate

Key Findings

• Consumer Interest in EVs Declines for Fourth Consecutive Month: The percentage of automobile shoppers who say they are “very likely” to consider an electric vehicle (EV) for their next purchase or lease declines to 24.4% through the end of February 2024, the fourth consecutive monthly decline in EV consideration. Meanwhile, the percentage of shoppers who say they are “very unlikely” to consider an EV has climbed to 22.2% during the same period.
• Charging Infrastructure Remains Stumbling Block to Mainstream Adoption, and it’s Getting Worse: The top reason for not considering an EV, cited by 52% of consumers, is lack of charging station availability. According to the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Ownership Study,^SM satisfaction with public charger availability among non-Tesla owners is 32 points (on a 1,000-point scale) lower than a year ago.
• All Eyes on Tesla Charging Network: Tesla has been the sole EV manufacturer to deliver a consistently positive public charging experience through its proprietary charging network. Soon, EVs from more than a dozen different manufacturers will be compatible with Tesla’s North American Charging Standard (NACS), and if that positive customer experience holds, we could see a reshuffling of the ranks of most popular EV brands as models from BMW and Rivian start to impress owners with a stand-out customer experience.

Executive Summary

Consumer interest in EVs is being put to the test as the nation’s foundering public charging network continues to disappoint users. Will mass access to Tesla’s NACS network fix the problem? And if it does, how will that influence consumer interest in non-Tesla models?

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from JD Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

EV Consideration Declines

Two important EV adoption trendlines are converging in a way that should signal some concern for automakers. The percentage of consumers who say they are “very likely” to consider an EV for their next vehicle purchase or lease is declining, while the percentage who say they are “very unlikely” to consider an EV for their next purchase or lease is on the rise. This is the fourth consecutive monthly decline in EV consideration and the lowest level recorded since JD Power started tracking the trend in June 2022.

Public Charging Experience Goes from Bad to Worse

The majority (52%) of consumers who say they would not consider an EV for their next vehicle purchase or lease cite lack of charging station availability as a key reason for their decision. Other charging-related concerns, such as time required to charge (45%), limited driving distance per charge (43%), inability to charge at home or work (37%) and power outage/grid concerns (33%) are all among the top drivers of EV rejection.

EV customer experience with the public charging network and widespread media reports about EV owners struggling to charge their vehicles in harsh winter conditions is exacerbating these concerns. Among mass market EV owners, satisfaction with public charger availability declined 32 points during the past year. We also find that the percentage of EV rejecters citing “inadequate performance in extreme temperatures” rose 8 percentage points in February from January—an indication of the influence news reports of “Chicago’s EV Apocalypse” likely had on consumer sentiment.

How Will the Opening of Tesla’s Chargers Shuffle the Deck?

Tesla has consistently earned significantly higher customer satisfaction scores than rival EV manufacturers when it comes to using public charging networks. According to our data, overall satisfaction with DC fast charging (Level 3) among Tesla vehicle owners in 2023 was 738, while the industry average for all other brands is just 569. With 17 automotive corporations now having signed agreements with Tesla to use their NACS standard and many non-Tesla vehicles soon-to-be compatible with the Tesla network, the big question is: Will it work?

Will non-Tesla vehicles suddenly enjoy the same great public charging experience that Tesla owners have had for the past several years? Or will there be issues with capacity, conversion equipment or software that blunt the positive effects of the transition? We’ll soon find out.

If the plan does work, non-Tesla brands could see a significant bump in consumer demand. The BMW i4, Rivian R1T and Rivian R1S recently took the top three spots in the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Ownership Study,^SM significantly outperforming Tesla in key areas like satisfaction with vehicle quality and reliability. However, like other non-Tesla models, these vehicles dramatically underperformed Tesla in satisfaction with the availability of public charging. If that problem were to improve substantially with greater access to fast charging through usage of Tesla’s Supercharger network, we may see a significant change in the competitive dynamics with the ownership experience among EV models.

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index, the JD Power EV Retail Share Forecast, the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Ownership Study, the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study and the JD Power U.S. Electric Vehicle Consideration (EVC) Study. The JD Power EV Index is an analytics tool to benchmark the growing EV market in the United States. It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with gas-powered vehicles in the U.S. Each month, the JD Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace.

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This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The JD Power E-Vision initiative is a company-wide program focused on maximizing JD Power industry-leading EV data, analytics, insights and solutions. Please contact us at the numbers below to connect with the authors or to learn more about the underlying research.

Media Contacts

Shane Smith; East Coast; 424-903-3665; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

VIDEO: Financial Services Intelligence Update — March 2024

Despite a challenging year for retail banks in 2023 due to factors like bank failures, inflation, and declining consumer health, customer satisfaction with primary banks only slightly declined, registering at 644 out of 1000 on the JD Power scale. However, satisfaction declined in four out of seven dimensions, with millennials leading the decline, particularly in levels of trust.

What do banks need to do to win over millennials? Watch the latest Financial Services Intelligence Update for key takeaways from the 2024 U.S. Retail Banking Satisfaction Study and discover what areas banks need to focus on to retain and grow younger generations before the relationship solidifies with another institution.

BONUS: Download our exclusive insights detailing each generation’s overall satisfaction (OSAT) with their primary retail bank, followed by satisfaction levels with the seven dimensions that determine overall satisfaction.

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JD Power 2024 U.S. Retail Banking Satisfaction Study

The J. D. Power Retail Banking Satisfaction Study^SM  is the longest-running and most in-depth, independent analysis of retail banking customers available. While some things have changed, banks have continued to rely on this invaluable study for unbiased intelligence about retail banking customers’ satisfaction with their primary financial institution.

The study measures customer satisfaction with retail banks in 15 geographic regions. Read key insights from this year’s press release and view the highest-ranking banks and scores, by region.

Read the 2024 U.S. Retail Banking Satisfaction Study Press Release.

View Press Release

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Contact us today.

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Miles Tullo 

Miles Tullo is the Managing Director for the JD Power Financial Services team. He oversees the company’s consumer payments program, focusing on point-of-sale choice and non-credit card payment methods. Drawing from over 20 years of experience in both payments and mortgage lending, Miles brings valuable expertise to clients. 

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VIDEO: Financial Services Intelligence Update — April 2024

In the JD Power Financial Services Intelligence update for April 2024, we discuss the 2024 U.S. Full-Service Satisfaction Study and the 2024 U.S. Self-Directed Satisfaction Study. Kapil Vora notes: “Full-service investors express greater satisfaction compared to DIY investors.” The discussion explores intersecting trends from both studies, examining how investor types and segments, such as financial health and generation, influence satisfaction levels. 

Key highlights from the update include: 

• Service Levels Impact Satisfaction: Investors working with advisors report higher satisfaction; DIY platforms lack personalized guidance. 
• Trends Over Time: Full-service investor satisfaction rises due to market performance and staffing investments; self-directed investor satisfaction remains stable. 
• Segmentation Matters: Older investors more satisfied year over year; younger investors show declining satisfaction, requiring targeted outreach. 
• Trading Habits and Financial Health: Active traders are more satisfied; buy-and-hold investors may need additional guidance. 
• Brand Spotlight: T.D. Ameritrade and Charles Schwab excel among DIY investors; U.S. Bank stands out in the full-service segment. 
• Differentiation Strategies: Clear communication, effective support, and transparent fees are vital for a unique value proposition. 

 

Where can you find more insights like this?  

• The JD Power Full-Service Investor Satisfaction Study measures overall investor satisfaction among those who invest through a dedicated advisor or team of advisors, unveiling insights into affluence, age, and gender preferences. It offers valuable insights for enhancing client satisfaction, loyalty, and retention rates, refining investment strategies, and promoting client advocacy, aiding in identifying areas for improvement within wealth management firms. Read the Press Release  
• The JD Power Self-Directed Investor Satisfaction Study evaluates the satisfaction levels of investors utilizing self-directed investment platforms, providing critical insights into their needs, expectations, and preferences. These valuable insights pinpoint the dynamics that influence satisfaction, such as portfolio size and trading activity, enabling them to tailor their offerings better to meet the needs of different types of investors.  Read the Press Release  

 

More About These Experts 

Kapil Vora is the Senior Director of Wealth Intelligence at JD Power. In this role, he is focused on equipping clients with data, analytics, and strategy to make them competitive with today’s investors and financial advisors. He leads research for various syndicated studies, including Investor Satisfaction Study, Financial Advisor Satisfaction Study, Retirement Plan Digital Study, Advisor Online Experience Study, and Wealth Management Digital Satisfaction Study.  

Miles Tullo is the managing director of the JD Power Financial Services team. He oversees the company’s consumer payments program, focusing on point-of-sale choice and non-credit card payment methods. Drawing from over 20 years of experience in both payments and mortgage lending, Miles brings valuable expertise to clients.  

As Consumer Financial Health Shows Modest Improvement, New Bank Late Fee Cap Could Provide More Relief

Banking and Payments Intelligence Report
April 2024

Incremental Improvement 

While the changes in customers’ financial health are modest, they are trending slightly upward. Nearly one-third (32%) of respondents are financially healthy, while 44% fall into the vulnerable category. These are the most encouraging levels we’ve observed since August 2023.  

Customer sentiment regarding financial health status, stress levels and empowerment to improve one’s financial situation also ticked slightly upward to levels not seen since August 2023. These changes can be attributed to improving levels of customer savings to cover both short- and long-term needs.

Late Fee Cap Could Help
Even as conditions start to improve, 25% of customers say they have paid a credit card late fee in the past year. Unsurprisingly, this level is higher among financially unhealthy customers. When asked how much they paid on this late fee, 73% said the fee was more than the proposed $8 cap.

More than half (59%) of customers view the proposal to cap late fees as at least somewhat helpful, with 23% considering it to be very helpful. Younger customers—and those who are financially unhealthy—are the most likely to see the cap as a benefit.

Even though this proposed legislation could help some bank customers, most are unaware of it. Two-thirds (67%) said they have not heard of this proposed change. And even once they do hear about it, many customers doubt it will come to fruition. More than half (52%) of all respondents say they do not believe this change will take effect this year.

The Fraud Factor

As customers await changes on late fees, they are still grappling with instances of fraud on their bank accounts and credit cards. Nearly one-fourth (22%) believe their risk of fraud has increased during the past 12 months, with older customers more likely to believe they are more susceptible.

Customer ratings of both their bank and card issuer security protections have declined across all key metrics since June 2023, when JD Power established a baseline. Overall, customers with healthy financial situations and those under 40 years old are more likely to rate their bank or card issuer’s security higher.

Building Awareness

As customers begin a slow climb back toward better financial situations, many are still living in a precarious financial state. Receiving a large late fee on a credit card or falling victim to fraud could take a customer on the precipice of a healthier financial outlook and plunge them back into a vulnerable state.

As programs from governmental or in-house bank or credit card programs focused on tamping down late fees or bolstering security enter the marketplace, institutions will need to build awareness. It’s possible that even a small piece of aid could make a major difference.

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This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in March 2024. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.

Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]