Sunday, April 2, 2023

Car buyers love electric vehicles, but they hate the prices. That’s bad for green energy hopefuls.


Last week at the annual Washington Auto Show, Shawn Strayhorn and his father made a beeline for Ford’s F-150 Lightning.

Looking inside the electric pickup’s front trunk, a storage space that doubles as a refrigerator where the gas-guzzling engine used to be, he declared himself impressed. But Strayhorn said he was not ready to be an “early adopter” of the $56,000 to $100,000 vehicle.

“In the future, it will come down in price. Right now it is a bit difficult and expensive to buy,” he said. His father, Ronald Strayhorn Sr., wearing an Air Force veteran’s cap, said it was best to wait until the truck had a longer track record. “Let others do the testing,” he said.

His wait-and-see approach, shared by many at the show, could undermine a central piece of the Biden administration’s green energy agenda: a push for plug-in vehicles to account for half of new vehicle sales by 2030. . Electric car sales grew rapidly last year to claim 5.4 percent of the US market, with many models drawing long waiting lists of buyers. Analysts and car buyers say consumer concerns about high prices, poor charging infrastructure and the risks of testing new technologies remain barriers to widespread acceptance.

A new federal tax credit of up to $7,500 for electric vehicles made in North America could help juice demand. But the administration is still working out the fine print on which vehicles are eligible, which has left many consumers and car dealers confused. And the stimulus comes after a spectacular jump in car prices over the past two years that has forced many buyers out of any market for vehicles, electric or gas.

The average new car sold in the US for $49,507 at the end of last year, according to data provider Kelley Blue Book, but the average all-electric car cost 24% more: $61,448.

“These high vehicle prices are out of reach for most consumers,” Charles Chesbrough, a senior economist at Cox Automotive, told a conference in Detroit this month., Referring to all cars including electric.

As more EV models hit the market, there are signs that competition is driving down prices, a trend that some analysts say could accelerate in the coming months. Electric vehicle giant Tesla has cut prices several times in recent weeks as rivals cut into their market share in the United States and abroad. “Tesla’s price cuts lead to a big drop in electric vehicles,” Morgan Stanley said in a research note this week.

Making electric cars more accessible to the masses remains a key pillar of US green energy policy. The Biden administration and supporters in Congress are pouring billions of dollars into the project over the course of the next decade, calling it key to boosting American manufacturing and halving greenhouse gas emissions by 2030.

“Actually, there are a few things that worry me about getting there [EV] Volume and market share is what we’re after,” said Brett Smith, an analyst at the Automotive Research Center in Ann Arbor, Michigan.

For its part, the Biden administration is armed with counterpoints to counter the EV label’s impact in advance. Michael Berube, deputy assistant secretary for sustainable transportation at the Department of Energy, said in an interview that the tax credit would lower upfront costs for many Americans, while new battery technology would lower the cost of electric vehicles over time. He also discussed the long term savings of going electric.

“Of course, you get maintenance savings – a 40 percent reduction in maintenance and repair costs. And the fuel cost of a car is significantly lower,” he said. If you want to fill up a normal car today, gas costs $49 for a car, $14 if you’re charging at home, and $27 if you’re fast charging outside. …to cover the same distance”.

Big automakers are excited and are investing billions of dollars to launch dozens of electric vehicles in the coming months.

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At the Detroit auto conference this month, Dan Nicholson, vice president of General Motors, teased the all-electric models the company will launch in the coming months, including the Silverado pickup, Cadillac Celeste and Equinox SUV. GM says the Equinox will start around $30,000. A greater variety of low-cost models, including the roughly $27,000 Chevy Bolt EV, would help appeal to consumers, he said.

“We think that when you give customers a choice, [demand] It’s going to happen more than a lot of people think,” Nicholson said.

Rod Leshe, managing director of Wolfe Research, also expressed hope that competition and incentives in the recently passed Cut Inflation Act will drive down the cost of electric vehicles. In addition to tax credits for buyers, the law provides generous tax breaks to US manufacturers of vehicle batteries. He told the conference that if some of those savings were passed on to consumers, the prices of some models could drop significantly.

Price aside, though, an even bigger problem could arise, Lachey said. The lack of charging infrastructure and frequent reports of charger failure keep electric car owners worried. “If this is not addressed soon, it could hurt the industry for some time,” he added.

The White House aims to address that problem with a bipartisan infrastructure bill signed by President Biden in 2021, which provides $7.5 billion to subsidize the construction of EV charging stations. Berube said the federal government has begun distributing those funds to the states, which will greatly improve the driver experience. “The network that exists today has not yet seen the benefits of these funds,” he said.

The range and availability of charging stations was one of the top concerns cited by auto show attendees. Elka McIntyre of Rockville, MD, said her husband wanted to buy an all-electric Kia EV6, but she turned down the idea because their apartment building doesn’t have charging. The couple ordered a Kia Sportage Hybrid instead.

“I think there’s a lot of work to be done to make it more accessible, not only in terms of charging, but also in terms of price,” he said of electric vehicles. “For the average person in America, it’s not affordable.”

Reviewing the blue Chevy Bolt EV, retired DC resident Ed Smith said he’d like to go electric, but his biggest concern is cost. “I think electric vehicles are overrated right now. I love the technology, but the price is more important to me,” he said.

The Bolt, like other electric vehicles assembled in North America and priced below a certain threshold, is eligible for a $7,500 tax credit, a benefit that Smith says will make the car affordable to him. But he expressed uncertainty about how long the car would qualify for the full credit, noting that the Biden administration is still finalizing rules on how many batteries must be in the United States or some allied countries. The Treasury Department has said it will propose new rules in March.

“The incentives are probably going to change over the next few months,” Smith said. “Something like this you have to buy very quickly by March. And I’m not ready to buy in March.” Auto industry executives say many dealers are confused on this point as well, making it difficult for them to promote the tax credit to potential buyers.

GM believes it is “well-positioned” to qualify for the tax credit because it is “actively seeking opportunities to localize its supply chain as much as possible,” spokesman Matthew Ybarra said.

Smith said he doesn’t have a garage where he can install a charger, and he’s not as enthusiastic about running charging cables from his house to the street as some of his neighbors have been.

Tenia Gray, 24, of Baltimore, who investigates electric vehicles with her grandfather, said she wasn’t worried about finding charging, even though her apartment complex doesn’t have it. “I want to change the carbon footprint because I’m just trying to save the environment,” he said.

But most other attendees the Washington Post spoke to raised concerns about battery charging and range, even though they reviewed the electric model and said they’d like to buy one in the future.

Ricki Thomas said she doesn’t want to stop for 30 to 40 minutes to charge on road trips to Florida she takes a few times a year. After seeing the Hyundai Ioniq 6, he said, “We are interested in these, but we just want to see battery technology move forward a little bit.” “For a touring car, it’s perfect,” he said.

Nation World News Desk
Nation World News Desk
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