EV affordability is 'critical' for car buyers: Analyst
In This Article:
Tesla (TSLA) recently cut the prices on some of its Model 3 and Model Y vehicles. Making electric vehicles more affordable is going to be "critical" to boost EV adoption, says Cox Automotive Director of Industry Insights Stephanie Valdez-Streaty.
Valdez-Streaty says fewer than a dozen vehicles qualify for incentives created by the Inflation Reduction Act, but if more become eligible it will be "important." Valdez-Streaty also points to the shift from the incentive being a tax credit to being offered at dealerships will also help because "consumers are going to see that taken off at the point of purchase as opposed to their tax returns."
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This post was written by Luke Carberry Mogan and Stephanie Mikulich.
Video Transcript
AKIKO FUJITA: Yeah, we're looking at EV price drops there.
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But you're talking about 8% at least in market share.
There's a really wide range when you're looking at how things are state by state.
California, where I am is near 25% for new cars.
And yet you've got many other states that are lagging.
Is it about price?
Is it about infrastructure?
What's holding some of these drivers back?
STEPHANIE VALDEZ-STREATY: Yeah, I think that's a lot of different factors.
As you mentioned, I think it's price.
It's infrastructure.
I think that whole range anxiety is really infrastructure anxiety.
So I think that's part of it.
I think the state incentives is another one.
Education about the incentives I think that's another factor that's really trying to promote EVs and really get consumers more aware about EVs.
I think that's a difference in some of the states where we're seeing more adoption as well.
AKIKO FUJITA: Specifically on price, what do you think is the sweet spot for drivers that would convince them?
To switch over the argument from the White House has been, look, we've had these incentives for the IRA, $7,500 for new EVs.
The market is likely to follow.
It hasn't been quite as even.
Is it about a price point that's in the 30,000 range?
Is it 40,000?
What are you finding?
STEPHANIE VALDEZ-STREATY: Yeah.
I think it's definitely that.
We actually did a report last week, and it showed that 50% of the population, consumers can only afford a $400 payment, car payment.
So affordability is critical.
And I think we have the inflation reduction incentives, which I think are really good.
But there's only less than a dozen that are eligible.
So I think as we start to see more affordable vehicles under that 40,000 price point and then also more that are eligible for that EV credits, going to be important.