Category: Uncategorized

Used-Vehicle Market About to Get Complicated as Returning EV Lease Volumes on Track to Spike in 2026

E-Vision Intelligence Report
October 2024

Key Findings

• Electric Vehicle (EV) Returning Lease Volumes on Track to Spike 230% in 2026: Lease volumes for new EVs surged 355% throughout 2023 and 88% through September 2024. Franchise-only (excluding Tesla) EV lease volumes were even higher, rising 438% throughout 2023 and 109% through September 2024. As a result, returning EV lease volumes are projected to dip slightly in 2025 before spiking 230% in 2026. This trend runs counter to what’s happening industry-wide where total lease volumes for gas-powered vehicles have been lower than pre-pandemic levels, creating a likely shortage in used-vehicle availability in 2025 and 2026. 
• Current EV Incentives Make it Significantly Cheaper to Lease New EV: Increased EV availability and big manufacturer and dealer incentives have caused EV prices to drop significantly, creating a situation in which it could be cheaper for returning lessees to lease a new EV than to buyout their existing lease or buy or lease a gas-powered vehicle.
• Uncertainty About Future of Incentives, Overall Used-Vehicle Volumes, Battery Health Create New Complexities for Consumers: Uncertainty about whether the federal EV tax incentive will continue and how long high manufacturer incentives will last, concern about long-term battery health, and a shortage of used gas-powered vehicles will complicate the traditional balance of supply and demand in the used-vehicle marketplace.

Executive Summary

All those hefty incentives that have made leasing a centerpiece of the EV sales strategy may create some complications for the used-vehicle market during the next two years. According to JD Power data, a glut of used EVs will be coming off lease throughout 2026 and beyond, while, at the same time, there is likely to be a significant slow-down in returning lease volumes for gas-powered vehicles. That lopsided dynamic in supply, combined with changes in EV pricing, uncertainty about the future of tax credits and incentives and concerns about long-term battery health will create some new complexities for consumers.

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

Wave of Used EVs Coming

Due in large part to a provision in the federal Clean Vehicle Tax Credit, which allows auto dealers to pass along a $7,500 tax credit to all EV lessees, nearly half (46%) of all franchise EV sales and 21% of total EV sales (including Tesla) in 2023 were leases. That trend continued throughout the first nine months of 2024, with the lease share of total franchise and Tesla EV volume reaching 30%. Meanwhile, lease volumes for gas-powered vehicles have been lower than pre-pandemic levels. Industry-wide, just 2.4 million gas-powered vehicles were leased in 2023. While that represents a 17% increase from 2022, it is still considerably lower than the pre-pandemic average of more than three million leases annually, which will likely create a shortage in used-vehicle availability in 2025 and 2026.

As a result, returning EV lease volumes are projected to decrease 2% in 2025 before surging 230% in 2026, when a total of 215,000 EVs will come off lease. Meanwhile, overall returning lease volumes, including both gas-powered vehicles and EVs, have been on a sharp decline, falling 37% since 2020. That trend is expected to continue through 2025 when roughly two million total vehicles will come off lease, down from four million in 2020. That means that, by 2026, the total share of EVs in the returning lease mix will be 5.3%, up from just 1.6% today.

Cycle of New EV Leasing Likely to Continue

Another trend influencing the dynamics of the used EV market is the steady decrease in EV prices during the past two years. For example, in the compact SUV segment, the average customer-facing transaction price (CFTP),  for a new vehicle is currently $35,900, down $12,700 from $48,500 in 2022. Driven by a combination of increased sales incentives and increased supply of new models, the steady decline in EV prices has created a scenario where lease buyouts, which had been a popular option for the past few years during supply constraints, no longer make economic sense. 

The average returning lessee in the compact SUV segment is paying $583 per month for their vehicle, and the average residual value of their vehicle is $29,645. Importantly, that means the buyout price of the majority of compact SUV EVs is higher than the $25,000 threshold that would qualify for the used EV tax credit. Accordingly, it would cost the average returning lessee in the compact SUV EV segment $477 per month to buyout the lease. Meanwhile, the average lease payment on new vehicles in the same category is just $457 per month.

Add to these stats the facts that it would be significantly more expensive to lease or buy a comparable gas-powered vehicle, and that 94% of current EV owners say that they are likely to consider an EV for their next vehicle purchase or lease, and it becomes clear that—under current cost and incentive structures—returning EV lessees are likely to lease new EVs.

Uncertainty Abounds 

Of course, all these projections assume that current federal tax incentives and manufacturer incentives on EVs continue to be offered at the same rates—neither of which is a certainty. The results of the U.S. presidential election, consumer demand for new EV models, and continued improvements in EV range will all weigh heavily on the future dynamics of the used vehicle marketplace. 

Long term battery health will also be a factor in this equation. With federal regulations requiring minimum EV battery warranties covering owners for eight years or 100,000 miles, this potentially costly maintenance item will start to become a much bigger factor in the consumer calculus of used vs. new vehicle purchases. Together, this new mix of variables, which has not previously affected used-vehicle valuations, will now become a big part of the consumer value equation. With 279,300 EVs set to come off lease in the next two years, the results will tell us a lot about the future of the used-vehicle marketplace.

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; 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]

As Black Friday Approaches, Consumers Prepare to Increase Holiday Spending

Home & Retail Intelligence Report
November 2024
    
This holiday season, it seems Santa has delivered a financial paradox. As consumers prepare to be inundated with Black Friday, Cyber Monday and Green Tuesday sales and promotions, economic indicators are sending analysts conflicting signals. Inflation is down from last holiday season, but consumer prices remain stubbornly high. It begs the question:  what are consumers ready to spend on themselves and their loved ones this holiday?

According to recent JD Power data, bank customers in the United States are ready to open the purse strings to make the holidays merry and bright. Overall, 59% of customers say they are prepared to spend the same or more this holiday season than they did a year ago.

Still, that jolly news isn’t without its caveats. Most notably, customers are leaning on credit, such as cards, loans or Buy Now Pay Later plans, as much as they did last year. That reflects customers’ precarious overall financial health,¹ which is largely unchanged since 2023. Only33% of customers are considered financially healthy compared to 30% a year ago.

Holiday Spending Trends Up

Nearly 1 in 5 (19%) customers say they plan to spend more this holiday season than they did a year ago. That is up from 17% in 2023 and 13% in 2022. That number is highest among customers that are financially healthy and customers under the age of 40.

Customers’ willingness to spend may reflect enhanced financial preparedness. Overall, 31% of customers say that they budget for holiday spending with specific holiday savings, up from 27% a year ago. Another 41% say that they budget for general purchases. Only 28% say they do not budget, down from 31% a year ago. The rate of those who say they do not budget at all is highest among vulnerable customers, stressed customers and those 40 years old and older.

 

Customer Still Lean on Credit

While customers may rely on savings to help pay for holiday gifts, credit will play a major role in decking the halls. When asked how their use of credit has changed compared with a year ago, 19% say they are using more credit cards, loans or Buy Now Pay Later options. That rate is unchanged from each of the previous two shopping seasons, when inflation was far worse. In fact, the rate has remained relatively unchanged for all metrics (about the same credit usage, using less credit and unsure).

When asked if they plan to make a major purchase for their home (e.g., an appliance, furniture, etc.), customers are expressing a more conservative approach. Only 21% say they plan to make a major purchase during the holiday season, with the highest rate among those that have healthy finances and are under the age of 40.

Among customers that do plan to make these purchases, 40% say they are influenced by seasonal sales and discounts. That’s not surprising, as 76% of all customers say price is the biggest influence in their purchasing decision, with sales and promotions being the next largest driver (50%).

Interestingly, customers intend to shop across a variety of channels without one option dominating. In fact, just as many customers say they prefer in-store shopping to online shopping (47% for in-store vs. 48% for online). That is largely driven by customers’ interest in ease of returns and exchanges, extended store hours, in-store and drive-up pickup options.

 

Holiday Helpers

As analysts examine the data, a concerning trend emerges: many customers will be spending as if their finances have fully recovered, even if their overall financial health is unsteady.  This potentially risky behavior could lead consumers to surpass their budgetary limits and rely on already strained lines of credit, placing them in a vulnerable financial position.

For retailers, this spending trend could present a seasonal sales boost, but they should brace for the potential post-holiday spending slowdown once customers start getting the bills.

Find out More

This Home & Retail Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in October 2024. It was authored by Andrea Lau, home and retail practice lead at JD Power. Please contact us at the numbers below to connect with Ms. Lau 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]

 

¹JD 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.

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]

Clear Communication and Management of Expectations at Admission and Discharge Emerge as Key Drivers of Hospital Patient Satisfaction

Healthcare Intelligence Report
March 2024

 

In the post-pandemic world, hospital staffing has become a moving target. Costs have soared for many facilities, forcing them to stretch their resources to match fluctuating demand. Add in frequent provider turnover and employee burnout, and these conditions have left many hospitals across the United States struggling to meet demand. Hospital patients are noticing.

According to JD Power, hospital patients in the United States that had an overnight stay during the past six months are frustrated by limited access to doctors and long wait times for rooms. That is a sobering proposition for hospitals, particularly in the era of value-based care where patient satisfaction scores directly correlate with reimbursement.

Admission and Discharge Problems

The adage that it’s hard to overcome a bad first impression seems to hold true, and that is a foreboding trend for some hospitals. Almost half (49%) of patients say it took more than two hours to reach their room after arriving at the hospital, a disconcerting stat considering more than one-third (34%) of overall patient satisfaction is dependent upon the admission and discharge processes.

The aspects of admission and discharge that patients value most focus on the hospital providing information in writing about what symptoms or health problems to watch for after leaving the hospital, and how well that information prepares the patient for leaving the hospital. Hospitals that effectively provide post-discharge care notes that are accessible for all patients—available in different languages, easy to understand, and are reviewed prior to discharge—can improve their satisfaction scores and avoid some readmissions.

Nurses Drive High Care Scores

Hospital patients express a high level of satisfaction in their interactions with their care providers, but many are simply not able to interact with a doctor when needed. Only 36% of patients say they are always able to speak to a doctor when needed, down from 43% in 2011 when the study was last conducted.

While contact with doctors may prove elusive, patients are very satisfied in their dealing with nurses. More than three-fourths (83%) of patients say the nurse always described their care plan for the day and 80% say a nurse manager/leader checked in to see how their hospital experience was going. What’s more, 87% of patients say they were told in advance of when to expect tests and procedures, and 85% say scheduled tests and procedures were performed on time.

Food and Lack of Sleep Drag Down Satisfaction

Jokes about hospital food are as old as time, and it seems patients are still just as dissatisfied with it as ever. Patients expressed low satisfaction scores for the quality of their hospital’s food and beverage, the variety of menu choices and the timeliness of meals.

In addition to poor food choices, only 45% say the area around their room was always quiet at night. While sometimes tests and vital checks make that hard to avoid, hospital staff can boost this area by making sure conversations aren’t had in the halls and any unnecessary lights are turned off. On a positive note, 68% of patients say their room and bathroom were always kept clean.

Opportunities to Improve

As hospitals navigate an era of healthcare that rewards both patient outcomes and satisfaction, there are plenty of opportunities that will leave patients happier and healthier during and after their stays. Making patients feel like a partner in their care, by engaging them with easy-to-understand care notes or coordinating scheduled admission times in a way that reduces long waits, can help. Improving the ancillary services, like food and beverage, would also make a difference. Facilities that can do this, plus manage staff and ensure patients feel they have access to their caregivers, will see a meaningful boost in their overall patient satisfaction.

Find Out More

This Healthcare Intelligence Report is based on the JD Power 2023 U.S. Hospital Patient Satisfaction Study^SM that included responses from 2,885 hospital patients residing in the United States. To qualify, respondents had to have had an overnight stay at a hospital in the past six months. The study was fielded in October-November 2023. It was authored by Christopher Lis, managing director of global healthcare intelligence at JD Power. Please contact us at the numbers below to connect with Mr. Lis 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]

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]

Is Artificial Intelligence the Financial Industry’s Saving Grace? U.S. Banking Customers Unconvinced

Banking and Payments Intelligence Report
March 2024

Just as the inflation rate seems stuck at just above 3%, the financial situations of U.S. banking customers have similarly hit a plateau.

According to JD Power, the percentage of U.S. bank customers that are financially healthy[1] remains near the all-time low. While banks would love to use artificial intelligence (AI) to help customers out of this malaise, customers remain unconvinced that AI has a practical benefit to their financial health.

Stuck in Neutral

Customers’ financial health seems to have bottomed out. Nearly one-third (30%) of respondents are financially healthy, while 45% fall into the vulnerable category, virtually identical to levels we have seen during the past five months.

Customer sentiment regarding financial health status, stress levels and empowerment to improve one’s financial situation also remain virtually unchanged month-over-month. The effects of inflation are still being felt, but they are declining slowly. Lower grocery prices are the most recognized way customers are feeling relief from inflation, with prices for dining out, clothing/discretionary items and energy also falling.

 

Customers Not Sold on AI

While banks are investing time and resources to integrating AI into their offerings, customers are simply not convinced that AI is to be trusted. More than half (56%) say they only somewhat trust the quality of the output generated by their bank’s use of AI, with 32% saying they don’t trust it at all.

 

Part of that could be how banks’ utilization of AI is perceived by the customer. Bank customers either view their institution’s use of AI as less advanced than other industries’ solutions, or they simply don’t know. If banks are hopeful to incorporate AI into their solutions, they must understand that the measuring stick is not other banks, but how AI is used in other industries as well.

 

Falling Short of the Hype?

A central theme to AI marketing is often that it helps customers “focus on what matters most,” but banks have yet to prove AI solutions achieve that goal. Just 28% agree that the use of AI lets them focus on what matters most about their financial life. Nearly half (43%) said they do not know.

 

What’s more, customers do not believe AI is being used to personalize their service or experience. Nearly one-third (32%) said AI is not personalizing their experience at all, while 57% said only somewhat.

 

Proving the Concept

In a time of financial uncertainty, customers want tangible, personalized solutions from their banks. Broad, sweeping messages from institutions about how AI can help them simply don’t augur the type of trust that customers need.

For banks to truly integrate AI to a point where their customers feel comfortable, they need to go the extra mile by making the individual understand how they’ll personally benefit from it. A promise to keep them focused simply doesn’t win hearts and minds. To bridge this trust chasm, they need to show a true value tailored to each customer’s need. It’s a heavy lift, but if banks want to roll out AI in a way that will make meaningful progress, it’s the only way.

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 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]

[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 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.

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 — 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.

Download Now

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

Ready to leverage JD Power data and insights?

Contact us today.

Get Started

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