Electric vehicle sales: Demand for EVs slowing despite tax credits
Sales had been accelerating in late 2023, but demand for EVs has since started to cool off.
Scripps News
Are you there, electric vehicle makers? It’s me, an EV shopper.
Judging by the EVs on the market, EV makers aren’t there listening to what consumers want, according to auto comparison company Edmunds.
EV battery longevity worries, range anxiety and lack of charging infrastructure are all known concerns, but there’s also a wide gap between what car shoppers want and what’s for sale, Edmunds’ 2024 EV consumer sentiment survey shows.
These factors together can make the uphill climb to mass EV purchases even steeper. Edmunds predicts the rate of EV growth will continue slowing through 2024, increasing to just 8% of new vehicle market share from 6.9% last year and 5.2% in 2022.
“The electric vehicle market is growing, but consumers have enough reservations about the options and charging infrastructure challenges to limit more significant growth in the short term,” said Jessica Caldwell, Edmunds’ head of insight.
What do EV shoppers want?
The top three things Edmunds says EV shoppers want include:
◾ Lower prices: Among those who intend to buy an EV, 47% want one for less than $40,000, and 22% are interested in EVs below $30,000.
Reality: Zero new EVs have an average manufacturer’s suggested retail price (MSRP) below $30,000, and there are only four below $40,000. In 2023, the average transaction price of an electric vehicle was $61,702, while all other vehicles stood at $47,450, Edmunds said.
◾ Cars and SUVs, not electric pickups: Among existing vehicle owners, drivers of pickups are least compelled to try an EV, with 39% saying they wouldn’t consider one. Among EV shoppers, 43% are interested in a car, 42% would consider an SUV/crossover and only 10% would consider a truck.
Reality: Car makers have a long lineup of trucks coming, including the Rivian R1T, Ford F-150 Lightning, GMC Hummer EV, and Tesla Cybertruck, with a Chevrolet Silverado EV, GMC Sierra EV and Ram 1500 Rev also potentially in the pipeline. “It’s not surprising that the Detroit automakers moved swiftly to protect their top money-making products from the threat of EV startups, but at least for now it appears this fear was unwarranted as EV pickup trucks are still largely niche products with a limited consumer base,” Caldwell said.
◾ EVs from the most trusted brands: Toyota and Honda rank third and fourth as the most trusted makers of consumer EVs, with Tesla and BMW taking the top two spots, respectively.
Reality: Toyota has just one EV on the market in the U.S., while Honda’s just beginning to sell its first pure electric.
What are EV shoppers buying then?
The dearth of EVs for sale that EV shoppers want has pushed them to hybrids, Caldwell said.
“People may not think an EV is right for them until 2030 or 2035, but a hybrid will work for now if they want to go green,” she said.
Non-plug-in hybrids are less expensive than EVs and ease people’s range and charger anxieties.
Will EV sales pick up again?
Yes, when auto companies make “the right vehicle at the right price point and we have the right (charging) infrastructure in place,” Caldwell said. “But it’s hard to orchestrate all that because (there’s) not one entity that controls all of those things. EVs will be slow for a while.”
Cox Automotive said last month its EV sales outlook index dropped to 36 in the first three months of the year, the lowest level since it started tallying this in 2021. “A year ago, when the index score was 53, a majority of auto dealers indicated that the EV market would be growing, not declining. That sentiment has changed,” Cox said in its report.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
