Affordability, Not Demand, Poses Challenges For Potential EV Buyers: Report

Despite growing interest in electric vehicles (EVs), high costs are proving to be a speed bump for potential buyers, leading to a slowdown in demand.

As per a Business Insider report, there is a significant number of individuals interested in EVs, but the hefty price tags, averaging over $50,000, are discouraging potential consumers. According to Mike Austin, an EV industry analyst at Guidehouse Insights, the market has hit a “trough” in the adoption curve.

Dealers have noticed a shift in buyer demographics from devoted EV enthusiasts to average customers weighing their options between EVs, hybrids, and gasoline cars. Many cannot justify the extra upfront cost of going fully electric.

Responding to this slower-than-expected growth in EV demand, major automakers like Ford F and General Motors GM have reevaluated their EV strategies. Ford has paused $12 billion in planned EV investments, while General Motors has delayed its target of building 400,000 EVs by mid-2024.

See Also: Why Tesla Stock Is Set To Continue Its Downward Spiral

The dearth of affordable EV options from mainstream brands coupled with inflated interest rates is making EVs an unattainable dream for many. For instance, a moderately optioned Ford Mustang Mach-E SUV or an electric F-150 pickup costs at least $50,000 and $70,000, respectively.

Despite this, some automakers are pushing forward. GM plans to introduce a new version of the economical Chevy Bolt and Volvo plans to expand production of the $35,000 EX30 SUV, set to hit the U.S. in 2024.

The inability to afford an EV remains a significant deterrent, even for those who are very likely to buy an EV as their next car.

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