Who Put the Brakes on EV Sales?

That seems to be the question everyone is asking. As EVs sit on lots longer, folks are pointing fingers at the media and inventing some sort of bias toward gas-burning options versus clean green machines.?

But at the heart of the matter, it’s the consumer making the final decision and right now the consumer is…kind of pissed off.

Whether it’s Gen Z workers on TikTok explaining just how daunting their financial landscape is or those homeowners who suddenly realize how much more expensive appliances are to replace when they go belly-up OR travelers who just don’t understand how plane tickets are double versus pre-pandemic…everyone’s just kind of ticked.?

The thing is, the consumer is still making the purchase for the needed appliance or the desired vacation and obviously basics like food. They’ll proven they’ll pay astronomical prices to see a concert too.

The consumer doesn’t have to buy a car today though. The 15 million or so SAAR we’ve been seeing is what I’ve called inevitable. These people have to buy a car and demand is pent up from three years of supply chain issues. Today’s car shoppers are going through a life change (having more kids, older kids getting their license, downsizing when kids are grown etc.) or they’ve been in an accident. With interest rates at the highest mark in a generation no one is buying cars because they want to. At least those who live in some kind of budget. Lamborghini is still setting records of course.

This is the brick wall today’s EVs are running into.

An electric car is not a need today even if it might be more efficient and the “right” choice for a driver just looking to get to work. We are past the early adopter stage and need to convince buyers of the EV attributes that are worthwhile. And when the first obstacle they see is a higher sticker price, sometimes 10-20% higher than a gas equivalent, that’s just a non-starter.

All the excitement they might have about the technology never gets stirred.

The idea of doing some good for the environment is wiped out with being able to save for the kids’ college.

They settle on a Honda Accord or a Ford Bronco Sport (fine vehicles I’m sure) because they know what they’re getting and they can wrap their head around the value. Plus, EVs still cost more to insure on average and the resale value is generally poor too. An affordability-focused market like we’re in now sees those as strikes against EVs.

When will this change?

I think it will start January 1st when the EV tax credit is directly applied to the sticker price of a car and the monthly payment buyers are staring at falls $150 a month.

That is simply huge.

If you’re presented a $600 payment and that’s a no go, $450 is a whole other world.

And I feel like 2024 will be a slightly more optimistic year for the consumer although global and national politics will be dragging on everyone’s psyche. Everyone still has to eat, work and hopefully be entertained.

But the EV hype machine will need to get back off the ground quickly. Every automaker and dealer selling an EV should be focused on January 1 and then tax season. These pivotal first few months of 2024 will say a lot about where EVs will stand through likely the end of 2025.

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David is the director of content marketing at CDK Global, a leading automotive software supplier to OEMs and dealers. He has spent nearly 20 years in the automotive industry as a product evaluator, journalist and marketer for brands like Autoblog, Cars.com, Nissan and Harley Davidson. In that time, David has tested hundreds of vehicles across all types of tracks and terrain. All opinions above are purely his own.