Electric vehicle sales slow in 2023. Why are more Americans unlikely to buy one?
Electrification of the auto market could be even more difficult, with the proportion of Americans saying it’s “very unlikely” that they would consider an EV purchase their next vehicle purchase in each of the first three months of the year, according to a new report.
In March, 21% of new-car shoppers said they were “very unlikely” to consider an electric vehicle, up from 18.9% in February and 17.8% in January, consumer analysis firm JD Power said in a monthly EV report. In contrast, the percentage of car shoppers who say they’re “very likely” to consider purchasing an electric vehicle was 26.9% in March, pretty much flat this year.
The report said persistent concerns about charging infrastructure and dampening enthusiasm for vehicle pricing. The EV market share of all new car sales fell to 7.3% in March, down from a record high of 8.5% in February, but up from 2.6% in February 2020.
“Many new car shoppers are becoming more adamant about their decision not to consider an electric vehicle with their next purchase,” said J.D. Power.
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Why aren’t people more interested in electric vehicles?
JD Power said the lack of public charging infrastructure and price have consistently topped the reasons for the past 10 months.
Other reasons people have cited for not wanting to buy an EV: range anxiety; time required for shipment; power outages and network concerns; lack of service for repairs and maintenance; and insufficient performance at extreme temperatures.
Even high-profile initiatives such as “Walmart’s plan to significantly expand its charging network and Tesla’s announcement that it will open some of its supercharger network to non-Tesla vehicles appear to have had little impact on these consumer concerns, at least so far,” said J.D. Power. .
Are electric vehicle prices going down?
The higher price of an electric car compared to its petrol-powered counterpart remains a deterrent.
Government subsidies for electric vehicles initially boosted demand, but new guidance from the IRS and the US Treasury Department in mid-April about specific vehicle requirements that must be met before electric vehicles can qualify for these tax credits has created confusion and is likely to raise tax credits. Price again electric vehicles in general.
The new directives included the location where the vehicle was assembled and details of the sources of the critical metals in the vehicle’s batteries. Batteries and components must originate in the United States or come from countries with which there is a free trade agreement in order for a vehicle to qualify.
“This new hurdle will affect the affordability of many EV models, while also potentially creating more confusion among buyers,” said JD Power. Our data indicates that higher prices will negatively affect EV sales.
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Shouldn’t people buy an electric car to help the environment?
While about 4 in 10 adults in the US believe that electric vehicle use helps address climate change “a great deal” (12%) or “a fair amount” (27%), nearly 6 in 10 believe it helps “just a little.” (35%) or “not at all” (26%), according to a March 1-23 Gallup poll.
Although 43% of adults in the United States said they would consider purchasing an electric vehicle in the future, 41% categorically say they would not, Gallup said.
Only about 4% of Americans currently own an electric vehicle, Gallup said, and 12% are seriously considering purchasing one.
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Who is least likely to want an EV?
Most people born before 1965, whom JD Power describes as Boomers and pre-Boomers, are less likely to consider an EV, but a third of Gen Zers (born between 1995 and 2004) are not. The analytics firm said Generation Z is seen as “the future of the market.”
“It is clear from the data that pricing and charging infrastructure present significant hurdles for a wide range of potential customers,” she said.
Geography and education may also influence your decision. Gallup said that Americans who live in the western US and are college graduates are more likely than their peers to report that they currently own an electric vehicle, are seriously considering a purchase, or may be in the future.
Medora Lee is USA TODAY’s money, markets and personal finance correspondent. You can contact her at [email protected] and sign up for the free Daily Money newsletter for personal financial advice and business news every Monday through Friday morning.