The U.S. automobile market recently saw overall new car sales jump nearly 25% over the last year. But while electric vehicles have received a push from the government and seen a boost in sales, many car buyers remain hesitant to go electric.
Concerns about infrastructure, “range anxiety” and high costs in an uncertain economy have kept EV sales lower than advocates had hoped.
“Right now, the average price of an electric vehicle is about $66,000, the average price of a gasoline powered vehicle is $49,000,” Lauren Fix, automotive analyst and founder of Car Coach Reports, told SAN.
She added that not only do EVs carry a higher sticker price they also, she said, cost more to insure. The reason for that, according to Fix, is because of replacement costs.
“Don’t let anyone kid you that there’s no maintenance because the tires wear out quicker … and there’s going to be maintenance,” Fix said. “You may have eliminated the engine, but you still have other components that need to be repaired. And when you total it all up, it takes about 10 years to recoup the cost of an electric vehicle over a gasoline powered vehicle.”
The consumer hesitancy naturally has a direct impact on auto dealers, who have to decide what types of vehicles they’re going to keep in stock by weighing government incentives while also preparing for governmental regulations.
In Delaware, for instance, the state is pushing car dealers to sell more electric vehicles and has announced that it wants to phase out gasoline-fueled new car sales by 2035.
Jim Ursomarso, vice president of Union Park Automotive Group in Wilmington, Delaware, doesn’t see buyers’ habits changing in the near future. And it all comes down to cost and reliability.
“The vast majority are still going to choose an ICE vehicle, a gasoline engine vehicle, because it’s less expensive in the price, and then that translates to lower monthly payments,” Ursomarso told SAN.
“They’ve got a budget, a monthly budget for their car payment, and they’re trying to stay within that,” he added.
Dealers don’t have anything against EVs, according to Ursomarso. They simply hope to provide what customers want. Right now, that’s not EVs.
“What works best for them is a car that’s less expensive and that will take them where they need to go when they need to get there without having to worry about stopping for an hour or three hours to charge and whether the charging station will be open or available,” he said.
The fear of running out of power before finding the next charging station, also known as range anxiety, has been and continues to be a major roadblock in the EV market.
Adding to that concern are the ongoing technical problems with existing public charging stations. According to J.D. Power, in the first quarter of 2023, 20.8% of EV drivers using public charging stations said they experienced charging failures or equipment problems that kept them from being able to charge their vehicles.
While the national development of charging stations is ongoing, the infrastructure comes up short in the face of growing demand. One company that is focused on addressing that issue and democratizing EV charging is a startup called Chargenet Stations.
Chargenet Chief Commercial Officer Sharmila Ravula said her company is creating an infrastructure that will make sure every charger the company deploys is always working.
“We are focused on bringing fast electric vehicle charging in very convenient locations to the entire population of the U.S. in places they live and visit frequently,” Ravula said.
The company, she said, has a “very narrow focus” on fast-food, quick-serve restaurants that are everywhere across the U.S.
Chargenet Stations has one station currently operating at a Taco Bell between two popular freeways in San Francisco. The company plans to have 25 stations operational by the end of 2024, and thousands of stations across the U.S. by 2035.
The Biden administration declared that it wants to see 50% of all new vehicle sales be electric by 2030.
But experts told SAN it will never happen.
“There is no way that you’re going to see electric cars increase to that substantial percentage by 2030 or 2050,” Fix said. “Not a chance.”
Fix pointed to the current situation in California, where the state recently banned the sales new gas-powered cars by 2035.
“The perfect proof is California here today in 2023,” she said. “They can’t even support all the electric grid because there’s not enough wind and solar power. And they’d need nuclear power, coal and natural gas, which California doesn’t want to do.”
Ursomarso said he sees his Delaware customers pushing back against EV requirements.
“We’re hoping that Delaware does not adopt the [zero-emission vehicles] requirement, the electric vehicle requirements,” he told SAN. “If they do, I think it’s not going to go over well.”
“The average person in Delaware is not going to be very happy that they now must spend a lot more to get a vehicle.”
