More car buyers are shifting to EVs — but the reasons why are nuanced

Customers are continuing to shift to electric vehicles, but industry analysts say the picture is complicated.

A rising share of car buyers traded their gas cars in for EVs in April, according to data Edmunds shared with CNBC. In January, 67.1% of buyers purchasing a new EV at dealerships traded in a gas car. By April, that climbed 7%, to 72.1%, according to the auto site.

The data also showed that EV loyalty numbers are rising: In January, 26.2% of buyers traded in an older EV for a new EV and 34.3% traded for a used one. Those numbers rose, as of April 26, to 35.4% and 44.5%, respectively.

These data points indicate EV interest is growing, despite the loss of federal and some state incentives that encouraged consumers to purchase the vehicles, and a pivot among many automakers back to internal combustion and hybrid vehicles.

Analysts and industry insiders have cited rising fuel prices as a possible factor motivating these decisions. The national average gas prices has risen roughly 44% from the same period a year ago, according to AAA.

Edmunds Senior Director of Insights Ivan Drury said it's still a bit too early to tell if this is a strong, lasting shift.

Oil and gas prices started rising after the U.S. and Israel attacked Iran on Feb. 28. About three more months of high gas prices and elevated EV trade-in numbers will give a better indication of whether customers feel pinched enough at the pump to consider a switch, Drury said.

"At six months, you're going to start dragging in even more consumers who are just going to be over it, especially if we see that other costs are increasing too," he said.

Those making the swap are already looking for a new vehicle, said Erin Keating, executive analyst and senior director of economic and industry insights at Cox Automotive. She noted that the average transaction price ha been around $50,000, with March's average at $49,275, according to Cox Automotive.

"We know that interest rates are still pretty high," Keating said. "If someone is driving a car right now that is perfectly fine, but is incrementally experiencing higher gas prices per month, they're still not going to say, 'Let me trade that car in for a brand new payment at a higher interest rate, just because I might save a few bucks on gas.'"

That makes this different from past gas price spikes, such as around 2008, Drury said.

"That's when we saw insane stuff," he said. "People getting rid of Suburbans for Honda Accords. That's not happening right now like that. We're not there yet."

Drury said EVs are still one of the most incentivized segments at dealerships, suggesting that demand hasn't reached stratospheric levels.

"If you look at the best deals right now, you're still gonna find EVs on that list," he said, "It's going to be low APR. There's going to be cash back."

The new EV market and the used market, where there has been a surge, are showing some differences, partly because of an influx of supply, Cox's Keating said.

The now-defunct federal credit required that a car was U.S.-made to qualify for the up to $7,500 incentive— unless it was leased. Those cars are now coming off lease, and EVs also have some of the steepest depreciation curves, which means low prices for used buyers.

Interest is higher in European countries, which Drury attributes to higher gas prices there and a broader selection of affordable EVs, many of which are Chinese.

"If we saw the Chinese EV show up," he said, "that's when we could actually see a more meaningful uptake versus right now [where] we have so much retraction from our automakers."

And the concerns many buyers have about EV ownership, like range anxiety, are still there, Keating said.

"There's still a lack of complete infrastructure everywhere," Keating said. "There's still a lack of knowledge or education around what it takes to own and operate an EV. So those factors haven't gone away simply because gas prices have gone up."

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