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Video: Fraud and Unmet Guidance for Banking Customers Under 40

The JD Power National Banking Satisfaction Study recently reported that satisfaction levels among banking customers aged 40 and under have seen a steep decline, whereas customers with an older age group have seen only marginal change.  Paul McAdam, Senior Banking and Payments sheds light on the issues on these findings to allow banks the opportunity to remedy them.

Fraud Issues Are on the Rise

A trend we are watching is rising incidents of fraud. Across our most detailed studies, fraud seems to be a widespread issue:

• 1 in 4  had experienced, or a close relative experienced fraud via a peer-to-peer service | Financial Health and Advice Platform
• Fraud is the second most common reason customers contact their bank with a problem | Retail Banking Satisfaction Study
• Customers’ confidence in protecting their account from fraud has the most impact on Customer Satisfaction  |  National Banking Satisfaction Study

Customers Look to Banks for Advice

Customers tell JD Power that they want their bank to be proactive when it comes to providing advice on how to navigate this difficult economy. Banks should also think about providing educational programs and webinars to help customers gain more understanding of their finances. The topics covered can range from investments, retirement planning, and other financial strategies to practical tips on managing debt. This can help build relationships with customers, as well as enhance their trust in the bank

At the end of the day, the goal is to make sure all banking customers feel supported and valued, no matter their age. This video is an eye-opening take on the banking industry’s customer satisfaction needs. Discuss these insights and with JD Power’s Banking and Payments Intelligence Team.

Do-It-Yourself Nation: How Inflation is Influencing Home Improvement and Retail Spending

Home and Retail Intelligence Report
March 2023

Do-It-Yourself Nation: How Inflation is Influencing Home Improvement and Retail Spending

Inflation may turn all of us into followers of Bob Villa, the famous home improvement do-it-yourselfer.

The persistent high cost of goods has everyone thinking about how they can tighten their belts. It turns out that for some, according to the latest JD Power data, that might mean adjusting their tool belts, as they get set to paint their walls or install their cabinets to save some cash.

Tool Time

When asked, at the end of 2022, how consumers in America planned to spend money, 56% said they plan to tackle home improvement projects. While the most common projects were painting (31%) or lawn/landscaping/gardening (18%), some plan to start more ambitious bathroom (14%) and kitchen remodeling projects (12%).

Nearly half (43%) of those who plan to take on a home improvement project say they plan to do the project themselves, while 33% say they plan to have friends/family help them. The remaining 24% say they will hire someone to do the work. That reflects a four-percentage point shift from those that say they completed the last home improvement project themselves (39%) vs. those who hired someone to do their last project (28%).

Curtailed Spending

While many American consumers are forging ahead with their projects in the face of inflation, rising prices have tamped down spending for some. When asked how they feel about being able to make a major purchase ($100 or more), including a home improvement project or receiving the home improvement services they want, 44% of consumers said they feel positively and have no concerns, 41% were neutral and 15% feel negatively and have concerns about that kind of expenditure.

Those with concerns cite inflation/rising cost of products and services as their main worry (29%). Concerns also included rising interest rates (20%), not being able to finish the project due to the high cost of a product they need (20%) and supply chain issues (15%).

Don’t Write Off Retail Just Yet

The death of brick-and-mortar retail stores may be greatly exaggerated. When asked how they will make their purchases, 42% of consumers said they will use a combination of in-store and online for their purchases, while 34% said they will make online purchases only and 24% said they will make in-store purchases only.

Where brick-and-mortar stores really shines, though, is with bigger expenditures. When asked how customers plan to make their larger purchases ($100 or more), a majority (51%) said in-store only. Of those who said they would shop online-only for larger purchases, 21% incorporated some component that requires a retail space, like online ordering with in-store pick-up (15%) and curbside pick-up (6%).

Informed Strategies

While retailers are understandably nervous about what inflation and a possible recession could mean for their businesses in 2023, it’s clear that American ingenuity is still alive and well, as customers are eagerly pursuing ways to make their big projects and purchases possible. That should inform retailers on how they can engage with their customers and avoid some of the volatility that may come with any future financial instability.

Marketing do-it-yourself (DIY) home improvement as attainable and doable, continuing to put on customer demonstration classes for weekend warriors and making sure big box retail stores are still adequately staffed (especially in the customer service/online pick-up locations) are just some of the ways retailers can make sure they’re adequately meeting customer demand. Retailers that can understand those goals and cater to customers should build themselves enough of a buffer between their balance sheet and a shaky economic climate.

Find out More

This Home and Retail Intelligence Report is based on responses from 2,005 consumers nationwide and was fielded in October 2022. It was authored by Christina Cooley, director of home and retail intelligence at JD Power. Please contact us at the numbers below to connect with Ms. Cooley 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]

Do Wealth Apps Play a Big Role In Financial Literacy?

In the continuing battle for customer loyalty and investment dollars, it’s clear that financial institutions must continue to provide quality content and services on their mobile apps. This was made abundantly clear by the 2022 JD Power U.S. Wealth Digital Experience Study, which found that half (50%) of Gen Y and Gen Z investors in the U.S. are turning to their primary investment firm’s mobile app for educational content. This reflects a clear appetite for more financial education.

Evaluating Financial Wellness

Just 39% of pandemic-era investors (those who started investing in 2020) can be classified as financially healthy, compared with 72% among more tenured investors, according to our 2022 Self-Directed Investor Satisfaction Study. Brokerage firms need to make financial literacy a priority, as financially vulnerable clients have significantly lower satisfaction with their firms and are more likely to defect and less likely to recommend.

What Education Is Most Valuable for Clients?

JD Power research shows that firms can improve satisfaction and brand loyalty by doing a better job of delivering content, tools and services that teach clients to:

• Effectively manage investments in the context of their overall financial lives;
• Overcome the challenges of paying bills on time;
• Manage debt in a challenging economy;
• Develop a savings plan to cover six months or more of living expenses.

Using Wealth App to Educate Investors

“Wealth management firms that want to attract and retain younger investors need to focus on continuing to improve their apps,” said Michael Foy, senior director of wealth intelligence at JD Power. With increasing competition in the wealth management space from banks and fintechs, investors have increasingly high expectations about digital channels. In addition to their practical utility, these apps are also playing an important role in financial literacy.

Questions for wealth digital channel directors, strategy leaders and customer experience management teams:

• How can I develop scalable ways to meet the demand for advice and guidance investors with very different needs and levels of knowledge?
• What is the best way to balance human and digital interactions to best support clients?
• How can I improve brand loyalty through digital channels?

Wealth Digital Channel Development

Will investors continue to turn to firms for financial literacy? In the 2023 Self-Directed Investor Study, JD Power will explore investors’ actual state of financial literacy and how well brands are doing to help educate and enable them to make better financial decisions. By doing so, we’ll help ensure that these young investors stay loyal to the financial institutions that they trust for the long haul.

How to Achieve Customer Satisfaction Through the Right Mix of Chat and Call Centers

As the world becomes more digitized, businesses need to adapt quickly to meet customer needs in new and innovative ways. The mortgage industry is no exception. With customers demanding quick and efficient service, companies are left with a choice: chat or call center? Each option has its pros and cons, but finding the right mix can lead to maximum efficiency and delighted customers. In this post, we’ll explore the differences between these two options and give you tips on how to find the perfect balance for your mortgage business,

Chat Usage Declines Throughout the Mortgage Transaction Journey

When it comes to mortgages, chat is definitely not the new black. According to the 2022 JD Power Mortgage Origination Satisfaction Study, only 19% of prospective borrowers utilized chat during last year’s refi boom. And those numbers fall even further as shoppers become customers and move through the lending journey, with 16% using chat to navigate the application and approval process and only 11% during the closing process.

Call Centers remain the overwhelming channel of choice as over two-thirds of borrowers still reach out to communicate with someone for help navigating all three parts of the lending journey. 

 

Strategies for Maximizing Customer Satisfaction Through the Right Mix of Chat and Call Centers

There are a few key things to keep in mind when trying to maximize customer satisfaction through the right mix of chat and call center support.

1. First, it’s important to understand that each customer is different and will have their own preferences for how they want to communicate with your company. Some customers may prefer chat support because it’s more convenient or faster, while others may prefer speaking to someone on the phone. It’s important to offer both options so that you can accommodate all customers.
   • Where We Can Help: JD Power Lending Research provides organizations with a detailed analysis of customers’ communications preferences by channel for each step in the borrower journey. JD Power experts examine these details against in-depth analysis regarding demographics, the influence of advertising and referrals, and other dominant factors. Learn more about our research
2. Another key thing to remember is that not every issue can be resolved through chat support. Some issues may require a more personal touch or attention from a live agent. In these cases, it’s important to have a seamless transition from chat to call center so that the customer doesn’t feel like they’re starting all over again.
   • Where We Can Help: If you’re challenged with identifying where you are in your journey and what priorities you should focus on next, we’re here to help. When you subscribe to the JD Power Customer Service Excellence Program, you’re enlisting our team of experts, exclusive cross-industry benchmarks, and library of best practices to help you succeed. Learn More about our Customer Service Program
3. Finally, it’s important to monitor customer satisfaction levels with both chat and call center support so that you can make adjustments as needed. By constantly monitoring and tweaking your process, you can ensure that you’re providing the best possible experience for your customers.
   • Where We Can Help: Organizations often need help identifying exactly where their customers want them to improve and monitoring progress. See what’s working during every client interaction with JD Power Pulse CX. Learn More and Request a Demo

Getting the Mix Right.

Ultimately, finding the right mix of chat and call center techniques for your mortgage business will depend on your customer base and their preferences. Analyzing data from both sources can help you determine which is most effective in delighting your customers and making them feel heard. In addition to maximizing efficiency, paying attention to customer feedback through surveys or reviews is also very important in ensuring that you are consistently providing excellent service.

The Battle for Buy Now Pay Later Customers is Being Won at the Point of Sale

Banking and Intelligence Report
March 2023

The Battle for Buy Now Pay Later Customers is Being Won at the Point of Sale

Buy Now Pay Later (BNPL) usage continues to grow, but not all these payment plans are experiencing the same level of customer engagement.

By the end of 2021, shoppers had spent more than $20 billion using BNPL, and, since then, BNPL has been dubbed one of the hottest consumer trends in the world, projected to generate up to $680 billion in transaction volume worldwide by 2025. This, of course, has spurred legions of banks, fintechs, retailers and ecommerce platforms to get in on the action.

Interestingly though, according to consumers surveyed by JD Power, engagement is primarily happening at the point of sale.

Approach at Checkout

According to our data, the total percentage of consumers with an active BNPL account has increased to 22% in January 2023 from 18% in October 2022 and 14% in July 2021. This is rapid growth that merits the attention lenders are giving to the space, and the key to scaling a BNPL solution seems to be promoting it at the point of sale.

Overall, 29% of customers said they first became interested in a BNPL service because it was offered as an option at checkout. Respondents also cite friends and family recommendations (16%) and social media (14%) as other factors that piqued their interest in BNPL.

Card Issuers Join the Fray

The success of BNPL offers has not gone unnoticed by credit card issuers, and some are competing directly with BNPL providers. Issuers are doing this is by either allowing cardholders to convert balances on card purchases to fixed, monthly payments for a fee, or offering a fixed APR that is lower than the current rate on their card balances. That’s often attractive for cardholders since they are already familiar with the card issuer and their terms.

That advantage, though, only goes so far. If card-based BNPL payment plans aren’t top of mind in the precious moments when cardholders are paying for their purchase,  those cardholders may be more likely to try a competitive BNPL solution.

Knowing the BNPL Customer

Financial institutions and fintech companies alike have recognized the steady upward trajectory of this category and know there is great potential in the space. But as these companies jockey for position in the market, they’ll need to understand each customer’s decision-making process around BNPL. This is unfamiliar territory for credit card issuers, who largely compete for new customers through affiliates, direct mail and cross-sell activities – most of which are disconnected from the point of sale decision. Now, as the point of sale becomes the primary battle ground for BNPL customers, issuers need to shift their thinking from traditional card acquisition strategies.

By gaining more insight into the details of the customer journey, credit card issuers looking to compete with BNPL providers should build cardholder awareness of their own payment plans so that they aren’t tempted to try other BNPL solutions at the moment of purchase. As BNPL gains more social acceptance, these customer behaviors could change, which is why providers will have to stay diligent on tracking these trends as they evolve.

Find out More

This Banking and Payments Intelligence Report is based on data from the JD Power U.S. Retail Banking Satisfaction Study, which is a yearly study that includes more than 20,000 responses annually. It was authored by John Cabell, managing director of payments intelligence at JD Power. Please contact us at the numbers below to connect with Mr. Cabell 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]

Record High Electricity Rates Still Not Enough to Get Customers Thinking About Sustainability

Utilities Intelligence Report
March 2023

Electricity bills in the United States rose 13.1% on average in 2022, higher than the overall rate of inflation. Concurrent with this trend, utilities have introduced aggressive carbon reduction goals and sustainability initiatives that rely on customers reducing their energy consumption through a combination of time-of-use rates, energy-saving appliance rebate programs and more.

In fact, 81% of electric utility customers are now served by a utility with a stated carbon reduction target. Despite this decade-long push to change emissions by spurring customer participation in these programs, many customers are completely unaware that energy conservation and sustainability programs even exist. Is the recent run-up in electricity prices proving the catalyst to finally change consumer behavior?

According to the latest JD Power data, even record high energy prices haven’t been enough to spur a significant increase in awareness of energy conservation and sustainability initiatives. However, a handful of utilities are starting to see their investments in sustainability pay off in the form of improved customer satisfaction and increased perceptions of affordability among customers. While these examples are in the minority, they offer a playbook for strategies that are working when it comes to consumer awareness of utility sustainability initiatives.

Ultimately, our research finds that utilities with a clearly stated sustainability goal, a concerted plan to achieve that goal and widespread support for that plan among customers are slowly changing customer behaviors and perceptions. These examples are rare, however, and the vast majority of electric utilities and utility customers are largely in the dark on sustainability and energy conservation initiatives – even as record high prices are hitting their wallets each month. Without a dramatic change of course, these utilities will struggle to meet their sustainability targets.

RECORD HIGH RESIDENTIAL ELECTRICITY PRICES DECOUPLED FROM SUSTAINABILITY

Customers in the U.S. are notoriously sensitive to changes in commodity prices and those changes often influence behavior. We see this trend prominently in our automotive data set, where incremental movements in the price per gallon of gas are directly correlated with consumer interest in electric vehicles, and, conversely how those rising fuel prices negatively affect the sale of large, gas-powered SUVs. The same cannot be said, however, for the correlation between rising electricity prices and consumer participation in utility energy management programs.

In fact, according to our data, just 14% of residential electric utility customers participated in one or more energy management programs offered by their utilities in 2022, a rate that was unchanged from 2020. Perhaps even more surprising, the number of residential electric customers participating in one or more price reduction or rebate programs, such as those offering discounts for using energy-efficient appliances, actually declined one percentage point between 2020 and 2022.

PERSISTENTLY LOW LEVELS OF CUSTOMER AWARENESS

The likely driver of these low participation rates is lack of customer awareness. Unlike the auto industry, which blankets the airwaves, news headlines and social media feeds with special offers on hybrids and EVs, the moment the national average gas price crests the $3.25 per gallon mark, the nation’s electric utilities have struggled to build awareness for consumer participation in their energy conservation programs.

According to our data, just 38% of residential electric utility customers were aware of one or more energy management product or service and just 26% were aware of one or more environmental product or service through the end of 2022. Both numbers are down one percentage point from 2020. Likewise, consumer awareness for utility efforts to increase the use of clean energy and recall of any utility communications about sustainability have been flat at 28% and 29%, respectively, for the past three years.

WHAT WILL IT TAKE TO FORCE A BEHAVIOR CHANGE?

While very few U.S. electric utilities have the customer awareness and support they will need to meet their stated carbon reduction targets, some pioneers have taken a more aggressive approach to getting customers to change their behaviors by introducing time of use (ToU) rates. This pricing scheme, which sets different rates for electricity use based on hours of peak demand during, is meant to encourage use of high-energy consuming tasks—such as dishwasher and washer and dryer use—outside of the hours of peak demand on the power grid. In California, for example, the Public Utility Commission (CPUC) has mandated that all investor-owned utilities operating in the state adopt new ToU rate structures.

The California program was first piloted in 2016 and we’ve been tracking customer experience with it since 2018. Overall, we’ve found that customers who proactively chose to be part of a ToU have had significantly higher levels of customer satisfaction and improved perception of affordability. However, when customers were mandated to participate in these programs, satisfaction scores plummeted. Verbatim responses from consumers who were forced into these programs ranged from simple gripes like: “Lose the time-of-day usage,” to more urgent pleas: “The new increased rate for electric use from 4 to 9 p.m. has raised our bill significantly even though we do much to conserve.”

Source: JD Power 2020 Q1-4, 2021 Q1 Electric Residential Studies^SM

Among the few electric utilities that have been able to successfully manage this transition, the Sacramento Municipal Utility District (SMUD) has been able to burnish its image with its customers by carefully communicating its goal, putting a defined plan behind it and slowly building customer support. Throughout the first three years of the multi-year roll-out of its ToU initiative (or “Time of Day” as it’s referred to in Sacramento)—even as customers’ average bills have increased—customer perceptions of affordability have held strong.

More recently, however, as energy prices have started to climb nationwide, even SMUD, which has been a pioneer in sustainability has started to see customer perceptions of affordability decline. Between 2021 and 2022, the percentage of SMUD customers characterizing the utility’s pricing as “affordable” has declined from 35% to 28%.

COMMUNICATION IS THE MISSING LINK

If energy conservation and transition to more sustainable alternatives are the goals for electric utilities, sky-high rates should be the catalyst to driving the consumer behavior changes needed to finally meet those goals. But that’s not happening today, and it’s largely a function of communication. Right now, even the best-performing utilities are not where they need to be in terms of customer engagement, awareness and support for sustainability initiatives. They need to get serious about customer communication to drive participation in these programs and, eventually, make a clear link in the customer’s eyes between sustainability and affordability.

MAKE IT EASY

Awareness is a big problem, but, even in cases where customers are aware of sustainability and energy conservation initiatives, they are often ignored. Far too often, products and services that are required to meet clean energy goals are designed to make things easy for the utility, not necessarily easy for the consumer. For example, many rebate programs can be difficult to find on utility websites and it is not always clear which appliances qualify or what information needs to be provided.

It’s no surprise that customers then struggle to understand the benefits of these programs, and how they can play a role in helping to use more clean energy and helping their electric utility meets its sustainability goals.

 

FIND OUT MORE

This Utilities Intelligence Report is based on data from the 2020, 2021 and 2022 editions of the JD Power 2022 Sustainability Index and the JD Power Special Report on the Impact of Time of Use Rates.

It was authored by Andrew Heath, managing director, utilities intelligence at JD Power. Please contact us at the numbers below to connect with Dr. Heath or to learn more about the underlying research.

Download a copy of the report here

 

MEDIA CONTACTS

Brian Jaklitsch – East Coast

631-584-2200

[email protected]

Geno Effler, JD Power – West Coast

714-621-6224

[email protected]

jdpower.com/business/utilities

 

JD Power does not guarantee the accuracy, adequacy, or completeness of any information contained in this publication and is not responsible for any errors or omissions or for the results obtained from use of such information. Advertising claims cannot be based on information published in this publication. Reproduction of any material contained in this publication, including photocopying in part or in whole, is prohibited without the express written permission of JD Power. Any material quoted from this publication must be attributed to JD Power.

© 2023 JD Power. All Rights Reserved.

As April 18 Looms, Banks Turn to Tech to Help Customers Ease Their Tax Anxiety

Banking and Payments Intelligence Report
March 2023

As April 18 Looms, Banks Turn to Tech to Help Customers Ease Their Tax Anxiety

It’s been an arduous year for banking customers in the United States. Between historically high inflation and wading through the fear of a recession, one would assume tax season would seem tame in comparison. Unfortunately, that’s not the case.

According to the latest JD Power data, more than three-fourths (76%) of bank customers in the United States have some sort of worries about their taxes, and 21% say they have more fears about this tax season than normal.

That’s noteworthy, because many customers use their tax returns to inject some much-needed capital into their finances. And with just 33% of respondents financially healthy[1], customers may need some help in navigating this tax season to avoid further financial worries.

A Stagnant Landscape

As the end of Q1 approaches, there has been no noteworthy change in overall financial health. One-third (33%) of respondents are financially healthy, while 41% are vulnerable.

The overall level of inflation recognition also remains unchanged at 66%. The percentage of customers that said the price of goods are increasing faster than their income is virtually identical to the February 2023 report, as well.

Tax Troubles

With the financial landscape relatively unchanged, customers enter a tax season filled with new filing requirements and thresholds with some consternation.

Nearly half (48%) of bank customers say they complete their taxes themselves (38% using software, 10% without software), while 35% say they use a service or a preparer. The stressed (45%) and overextended (43%) are most likely to use a software to complete their taxes themselves, while financially healthy customers (41%) are most likely to use a preparer.

Bank customers’ worries center on the fear of sticker shock, as 20% worry that they’ll end up owing more than planned, and 16% fear they may not get any refund. Both of those scenarios would mean a huge financial setback to customers, many of whom rely on the liquidity to help them pay down debt or keep up with existing expenses.

What’s more, half of bank customers (50%) say it is somewhat of a burden to make their tax payment, and 17% say it is an extreme burden. Of banking customers that have tax repayment, 21% are creating new debt by either borrowing from a friend or family member (11%) or taking out a loan (10%) to make that payment. Another 9% said they don’t know where they will get the money for tax repayment.

Banks to the Rescue?

As customers contend with this anxiety, banks are hoping to step up and help guide their customers through it. Some fintech firms are rising to meet this challenge, helping banks install solutions that help their customers make tax-savvy decisions all year long. Yet just 38% say they have received any messaging about tax assistance at all.

While it is encouraging that even a small percentage (12%) of customers indicate having received three or more types of messaging on tax assistance, the market for that help is far more robust. Nearly half (46%) of the vulnerable population and 61% of the stressed population don’t know if they received tax advice from their banks, which clearly shows banks need to find a way to be more proactive and clear in their messaging, particularly to the customers that need it the most.

Building Trust

There remains a wide-open space for both more fintech firms and traditional incumbents to offer services that could bring advantages to customers and their financial institutions. Some customers, particularly those under-40, say their biggest tax worry is trusting their preparer (9%). That number is three-times higher than the over-40 population (3%). If a bank, especially one that has their customers’ trust already, can help a customer make better tax decisions and ultimately get a better return, that customer will likely be far more inclined to stay in-house when using that return, whether that’s in the form of making a down payment on a home, taking out an auto loan, or paying down debt.

Some challenger brands are already rising to meet this challenge. Take CashApp, which acquired Credit Karma Tax in 2020. It offers both federal and state tax preparation services at no charge, on top of offering traditional services around banking, investing, or sending and receiving money. Others, like SoFi, offer everything from basic banking services and credit cards to mortgages and loan refinancing and investing, and even comparison shopping for insurance. But not tax preparation.

Data consistently show that as customers use more bank services successfully, they become further engaged and, therefore, less likely to leave the branch and less likely to move deposits elsewhere. If banks can bolster their services with tax solutions that can have a meaningful effect for their customers, they’ll likely see a significant return on their investment.

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in February 2023. 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]

 

[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.

EV Price Pressure Grows as Government Incentives and Lease Deals Wield Outsized Influence on Consumer Demand

E-Vision Intelligence Report
March 2023

EV Price Pressure Grows as Government Incentives and Lease Deals Wield Outsized Influence on Consumer Demand

Key Findings

• Improved Affordability and Availability Drive EV Adoption to All-Time High: As of February, EVs account for 8.5% of the total new-vehicle purchase and lease market, a record high, driven largely by significant improvement in affordability and availability.

• Government Incentives and Price Cuts Put Spotlight on Consumer Price Sensitivity: Consumer interest in EVs is increasingly being heavily swayed by price, with a clear correlation emerging between consumer demand and government incentives, lease deals and manufacturer price cuts.
• Era of the Sub-$30,000 EV: A combination of increased availability of lower-priced EVs and the introduction of Inflation Reduction Act has driven the total cost of EV ownership down for many models. The Chevrolet Bolt is leading the way as the first EV with a five-year purchase total cost of ownership of under $30k ($26.2k).

Executive Summary

“EVs are great, but they are too expensive,” has been the common refrain heard across countless consumer surveys, industry growth forecasts and dealer showroom conversations for the past decade. Now, thanks to a steady increase in availability of new models, expanded price mix within existing models and widening eligibility of federal and state incentives, acquisition cost is starting to fade as a hurdle to EV adoption.

According to the JD Power EV Index, a new, advanced analytics tool that tracks the progress to parity of EVs with internal combustion engine (ICE) vehicles in the United States, this steady decline in price mixed with surging availability is setting the stage for a new era of EV price wars. 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 Continues to Rise

Total EV market share has now reached 8.5%, nearly double the share of a year ago. The trend is consistent with steady growth in availability and affordability. The JD Power EV Index score for availability climbed sharply to 39.4 (on a 100-point scale) in January 2023 from 35 in December 2022, meaning approximately four-in-ten new vehicle shoppers currently have a viable alternative to ICE vehicles. Overall affordability has also improved by a similar margin, rising to 85.6 in January. Once the overall affordability index reaches 100, EVs will have reached price parity with their internal combustion engine (ICE) counterparts.

At the current trajectory, JD Power projects that approximately half of all vehicle shoppers nationwide will have a viable EV option available to them by the end of 2023. By the end of 2026, that number is expected to surpass 75%.

Incentives Highlight Huge Influence of Price on Consumer Behavior

The strong influence of consumer price sensitivity on EV consideration and adoption is on vivid display across several data points in this month’s JD Power EV Index. The first evidence can be seen in consumer interest in the Ford Mustang Mach-E and the Tesla Model Y following the reclassification of both vehicles as SUVs, which made them eligible for a $7,500 federal tax credit under the Inflation Reduction Act. Additionally, both manufacturers recently announced significant price cuts on both models.

Consumers responded immediately with a 3.4 percentage point increase in consideration in the Mustang Mach-E and a 1.6 percentage point increase in consideration in the Model Y.

 

Digging deeper into the influence of finanical incentives on EV adoption, we find a clear correlation between the states with biggest government incentives and consumer EV adoption rates. In California, for example, which currently has an adoption score of 45 (highest in the nation), state tax credits on the purchase or lease of a new EV is $2,000 for cars and $4,500 for trucks, SUVs and vans. Similarly, Oregon, which has an adoption score of 36, currently offers a $2,500 credit on EVs with a retail price at or below $50,000 and a $5,000 credit for EVs that meet certain battery size requirements, making many EV drivers in Oregon eligible for upwards of $7,500 in state rebates. We see similar trends in Colorado, New York and New Jersey where state-level EV incentives have had a significant influence on adoption.

 

Enter the Sub-$30,000 EV

The culmination of these trends taken together is a steady downward pressure on the price of EVs relative to their ICE counterparts. This is a significant turning point from the early days in the EV marketplace when the few viable models available were priced above $100,000. Now, thanks to federal incentives introduced in the Inflation Reduction Act and growing vehicle supply, prices of many models are trending lower.

The best examples of this trend are the Chevrolet Bolt and Bolt EUV. With incentives, the total cost of ownership of a new Bolt is now just $26,200, down $6,600 from December of last year. Likewise, the Bolt EUV has seen its total cost of ownership fall to $30,900. As this trend continues, we expect to see continued pricing pressure on new models driving increased competition in the EV market.

 

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index and the JD Power EV Consideration pulse survey. 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 ICE vehicles in the U.S. Each month, JD Power’s 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 at JD Power. 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]

JD Power Travel Podcast Explores Travel Reward Cards with Special Guest John Cabell

JD Power Travel Podcast Explores Travel Reward Cards with Special Guest John Cabell

John Cabell, Managing Director of Payments Intelligence at JD Power, joined Michael Taylor, Managing Director of Travel Hospitality Retail, and Andrea Stokes, practice lead for hospitality, on a JD Power Travel Podcast to discuss results from the 2022 Credit Card Satisfaction Study and performance of co-branded travel credit cards.

The study reveals customer satisfaction with travel-related credit cards has improved in the last year, with hotel cards ranking highest in satisfaction. Airline cards rank second in satisfaction after hotel cards, with bank-branded credit cards ranking the lowest. Bank cards tend to lag in reward satisfaction compared to airline cards and every other kind of travel card. The key area of success for these cards is reward redemption and the perception of value.

Tune in as these industry experts discuss:

1. What are cardholders most satisfied with when it comes to travel credit cards?
2. How does satisfaction with travel cards compare to regular bank-branded credit cards?
3. How important are rewards to cardholders, and how satisfied are they with reward programs?

JD Power · The Resurgence of Travel Credit Cards Feat. John Cabell | Travel & Hospitality Podcast | EP 49

Learn more about JD Power’s research on co-branded travel cards.

Webinar: Maximizing Online Engagement

MAXIMIZING ADVISOR ENGAGEMENT AND ROI:

Data-Driven Strategies for Content Delivery & Development from 4U & JD Power

As a wealth management professional, you know that effective advisor engagement is crucial for driving ROI on content development and delivery. But how do you know which strategies will work best for your business?

In this webinar, founder and co-CEO Denise Wypiszenski will share proprietary insights that will enable data-driven decisions in content development and wholesaler engagement. She will also draw on insights from the JD Power 2022 Advisor Online Experience Study to provide you with a comprehensive understanding of the advisor landscape.

Here’s what you’ll learn:

• How to quickly deliver the content advisors need to succeed
• Which content is most important to advisors
• How to adapt to the changing engagement landscape
• Strategies for understanding and connecting with your advisor audience
• How to measure success and drive ROI on your site

Click to watch the webinar now.

https://hub.jdpower.com/maximizing-advisor-engagement-and-roi-webinar