Headline in today’s Journal reads: Are Americans falling out of love with EVs?
Newsflash: Americans have never been in love with EVs.
Don’t get me wrong. Someday, the internal combustion engine will only be found in museums. But that day isn’t coming anytime soon, despite states attempting to force the issue by banning their sale.
Like all new technology, it takes longer than proponents think for society to accept. Sure, if you ask most people if they want to help reduce carbon emissions they will say yes. Nevertheless, it doesn’t mean they’re willing to dramatically alter their day-to-day lives to do so.
To date, the EV market has been supported by wealthy early adopters. People who can afford to spend $60,000+ on a second car. That doesn’t describe the vast majority of Americans.
The bottom line is EVs are still too expensive for the average American. The charging infrastructure is inadequate, and few people welcome having to upgrade their electric panels and install chargers at home.
If gas were selling in the U.S. at the same price as it is in Europe ($5 to $6/gallon) you’d have more EV adoption, but you still wouldn’t have the average American considering them because they can’t afford to spend that kind of money for a second or commuter car.
And note that sales of EVs are tanking, they’re just leveling off at about 100,000/month. That is the typical pattern for new technology once the early adopter phase is over and sufficient technological advances have not been achieved.
Also consider that many new models are on the horizon. This can cause consumers to delay the buying decision in order to expand their options. And Tesla is working on a revamped Model 3 and continues to promise an affordable offering – although Musk has been doing that for as long as I can remember.
Last, the IRA is offering a $7,500 tax credit that next year can be taken as a rebate at the time of sale rather than waiting for your tax filings. That could delay some purchases as well, although the domestic content requirements may make actually getting the credit a challenge.
Bottom line: the EV market remains in its early stages and won’t achieve critical market mass until consumers have a variety of affordable choices and the charging infrastructure improves.