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Electric vehicle momentum slows; price is the key obstacle for most consumers

Despite lower prices and federal tax credits, researchers say affordability is the critical issue for EV adoption.
Electric Vehicle Charging
Posted at 4:03 PM, Feb 19, 2024
and last updated 2024-02-19 16:44:51-05

Getting gas-powered cars off the road and replaced with electric vehicles is proving to be quite a challenge.

The demand for EVs is losing momentum, while more consumers plan to stick with a traditional gasoline engine for their next car, according to Deloitte's 2024 Global Automotive Consumer Study.

"So last year, about 58 percent of people said that they were still married to the idea of an internal combustion engine," said Ryan Robinson, automotive research leader with Deloitte, "that's now rebounded to about 67 percent."

Let's remember why this matters.

The Biden administration wants 50 percent of all new vehicle sales to be electric by the year 2030, and automakers have invested billions in response.

Despite lower prices and federal tax credits, Robinson said affordability is the critical issue for EV adoption. He points to a huge disconnect between what consumers think they'll be paying for a new car, and what they may be forced to pay.

"We see that 80 percent of U.S. consumers are still expecting to pay less than $50,000 for their next vehicle," he said. "We're already there."

Halfway through 2023, the average new car buyer in the U.S. paid $48,334, according to Kelley Blue Book.

In addition to price, the study found consumers have other concerns about switching to an electric vehicle:

  • Driving range remains a key barrier
  • Availability of chargers
  • How long it takes to charge a vehicle

Robinson said the environment is a factor but not the top motivator for most consumers.

"It actually slots in as the number two concern, but it is overshadowed by and large by this idea that people are going to be saving tons of money on their fuel," he said. "That translates into the fact that moving towards an electric future has always been a pocketbook issue for consumers."

For now, some of the major automakers are increasingly meeting customers in the middle by shifting to lower-priced hybrid models. Tesla has teased a more affordable $25,000 EV in production as early as 2025.

In January, the White House announced $623 million in grants to help build an electric vehicle charging network across the country.