Electric Vehicle Popularity Cooling in the US... "Takes 3 Weeks Longer to Sell Than Internal Combustion Cars"

As consumers' spending capacity decreases due to high interest rates and inflation, the growth of the U.S. electric vehicle (EV) market is rapidly slowing down due to expensive prices and a lack of charging stations.

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According to market research firm JD Power on the 28th, EV sales in the U.S. from January to October reached 869,000 units, a 56% increase compared to the same period last year. Although the number of EV sales is increasing faster than internal combustion engine (ICE) vehicles, the growth rate has clearly slowed compared to last year when the sales increase exceeded 70%. This trend has become more pronounced since the second half of this year.

Just a year ago, EVs were selling faster than ICE vehicles, but the situation has now changed. The Wall Street Journal (WSJ) reported on the 27th (local time), citing data from the car shopping website Edmunds, that it takes three weeks longer to sell an EV at car dealerships than an ICE vehicle. WSJ also stated that "as EVs and electric trucks pile up at dealerships, companies are considering changing their investment plans."

In October, U.S. automaker General Motors (GM) scrapped its plan to produce 400,000 EVs by mid-next year. Ford reduced production of the Mustang Mach-E EV and postponed $12 billion worth of EV-related investments, including battery plants, and plans to cut production of the F-150 Lightning electric truck next year as well. Tesla, the global leader in EVs, has decided to delay the construction schedule of its Mexico factory.

The cooling popularity of EVs in the U.S. is largely due to high prices. According to JD Power, the average price of EVs sold in the U.S. last month was $51,668, 17% higher than ICE vehicles ($44,112). As EV demand declined, Tesla proactively lowered its product prices continuously from the second half of this year. The popular Model Y is being sold at prices $17,000 lower than the average selling price last year. Although this price reduction trend has spread across the industry, EV prices are still criticized for being more expensive than ICE vehicles. The reduced spending capacity of consumers due to high interest rates and inflation has also negatively impacted the EV market.

The severe shortage of EV charging stations is also cited as a problem. WSJ said, "Most EV buyers are concentrated in urban areas like California where public charging infrastructure is easily accessible." The Joe Biden administration aims to build 500,000 EV charging stations by 2026 and plans to provide $7.5 billion in subsidies through the Infrastructure Law.

Currently, EVs account for 8% of the total vehicle sales market in the U.S. as of the third quarter of this year, which is still low. This is significantly behind other major automotive markets such as China (27%) and Europe (15%).

WSJ analyzed that "China and Europe have taken earlier and more aggressive steps to promote EV sales by combining government subsidies and stricter emissions regulations," and "as a latecomer, the U.S. needs more time." It added, "The situation could reverse in 2025 when EV prices become more affordable and charging infrastructure increases."

This content was produced with the assistance of AI translation services.