A year ago, everyone was talking about electric cars, and it seemed like an all-electric future was just around the corner. But today's car buyers are having second thoughts, which is stifling sales growth and causing a backlog of EV models at dealership lots.
Automakers, which are investing more than $100 billion to develop electric vehicles this decade, are cutting prices, production and profit forecasts for new green vehicles.
Inventory of electric vehicle models has more than doubled over the past year, reaching a record high of 114 days of inventory in early December, compared with 71 days for the auto industry overall, according to research firm Cox Automotive.
Things are so bad that a coalition of nearly 4,000 U.S. auto dealers calling themselves “EV Voice of the Customer” wrote to President Biden in November, asking him to “put an end to unrealistic government mandates” for electric vehicles the administration wants to make. Bloomberg reported that U.S. car sales will rise by more than half of U.S. car sales by 2030, up from about 7 percent in 2023.
Instead, car buyers are turning to gasoline-battery hybrids that have been around for a quarter-century and that dealers have struggled to keep in stock. Toyota Motor Company, Ford Motor Company. Others are increasing production of hybrid cars to meet demand. Meanwhile, conventional internal combustion engine vehicles continue to generate significant revenues, accounting for more than 8 in 10 vehicle sales in America.
The United States has fallen behind Europe and China in adopting electric vehicles, and auto industry executives and politicians are looking to catch up so America doesn't lose the transportation technology race. But the opinions of most American consumers do not match. Electric cars are still expensive, with an average price of $60,544, about $13,000 more than a gas-powered car, according to auto research site Edmunds.com.
This extra amount has become even more painful as interest rates on car loans have skyrocketed. Aside from the cost, many consumers also view EVs as too risky if they run out of power far from the charger — a concern known in the EV industry as “range anxiety.”
U.S. electric vehicle sales grew 60% in 2022, but will grow just 47% in 2023, and are expected to grow just 11% this year, according to forecasts from UBS Group AG. Ford has cut production plans for its flagship F-150 Lightning EV pickup in half in 2024. General Motors is also delaying production of long-awaited electric vehicles such as the Chevy Equinox SUV and Silverado pickup truck.
Elon Musk has repeatedly reduced prices for Tesla models in 2023. This has sparked what Ford CEO Jim Farley called an “electric vehicle price war,” prompting his company and others to cut prices. Musk's moves have slowed — but not prevented — market share losses that have hit profit margins hard.
The original wealthy buyers are gone
What has changed, industry executives and analysts told Bloomberg, is that initial buyer enthusiasm was driven by wealthy drivers buying an additional car because they want the latest technology. Now that those early adopters are gone, mainstream buyers who rely on their cars as a daily commuter are finding EVs more expensive and less useful.
“We need a more reliable charging network,” Anderson says, noting that there is only one charging station on the 200-mile route he travels each week between his offices in Omaha and Kansas City. “People need to have confidence that they can take their kids to their doctor's appointment, that they can get to work on time, that they can use that car for a vacation.”
It's not just the charging network that's unreliable. Electric cars had 80% more problems than cars with conventional internal combustion engines, according to the latest Consumer Reports survey. EV owners report most problems related to the battery and its ability to charge.
“This has nothing to do with the charger in the field. “This is specifically related to an issue with the car where it won't accept a charge,” Jake Fisher, senior director of automotive testing at Consumer Reports, told Bloomberg. “It's more like not being able to put gas in The Car. “This is a big problem.”
More than half don't even care
That explains why more than half of American car buyers now say they're not interested in electric cars, compared to just 42% who ruled out battery-powered models in 2022, according to a survey of a quarter-million American car buyers by the automaker. Industry Research Company Strategic Vision.
“In recent months, there has been a big push with more people saying they are not at all interested in buying an electric vehicle,” Alexander Edwards, head of strategic vision, told Bloomberg. He argues that there is actually no “inherent demand” for EVs due to their high prices and charging limitations. “Very few people want to spend $55,000 just to worry.”
To be clear, the bottom line is don't leave the EV market. Sales of battery-powered cars will continue to grow faster than the overall auto market this year, automakers and independent analysts expect. But the intense optimism that there will be an electric car in every garage conflicts with the pragmatism of mainstream buyers. So they will see lower prices and more people will stick to their traditional routes and familiar gas stations.
Electric cars have also become the target of culture wars, representing another barrier to demand. Electric vehicles are a key component of Biden's plans to combat climate change. The inflation control law offers a series of consumer tax breaks and multibillion-dollar incentives to stimulate demand.
Biden's Environmental Protection Agency has proposed caps on greenhouse gas emissions, which would require two-thirds of new passenger cars to be fully electric by 2032. But as he fights for re-election, former President Donald Trump called Biden's plan a “ridiculous farce about all cars.” He warned that electric cars would kill jobs and put American automakers out of business.
“The blue one [δημοκρατικές] “The United States says electric cars are great and we need to adopt them as soon as possible for climate reasons,” Bill Ford, Ford CEO and grandson of founder Henry Ford, said in an October interview with The New York Times. “Some red ones [ρεπουμπλικανικές] The states say this is just like the vaccine, and we are forced to have it by the government and we don't want it. “I never thought I would see the day when our products became so politicized, but it has happened.”
source: after that
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