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In 2023, EV sales slowed in the US, making the Biden administration’s 2030 electric vehicle sales target seem unrealistic. This push toward electrification faces multiple headwinds, including the pricing of EV models and the lack of adequate charging infrastructure.
Deloitte Automotive Research Leader Ryan Robinson joins Yahoo Finance to provide insight into the adoption of electric vehicles in the U.S. and future market progress amid continued challenges.
“Overall, our survey asked consumers how much they expected to pay for their next car. So based on overall transaction price alone, about eight out of 10 consumers said, They say they expect to pay less than $50,000 for their next car.”What consumers are really concerned about, and their point of contact with rubber, is their monthly It’s a payment,” Robinson said. For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor’s note: This article was written by Nicholas Jacobino.
video transcript
Rachel Akuffo: Now, in 2023, the pace of EV sales slowed, and the Biden administration’s goal of making 50% of all new car sales EVs by 2030 accelerated. On the other hand, high interest rates and soaring prices may have completely waned consumer interest in cars. In addition to electric vehicles, there are still other issues that need to be addressed as the promotion of electrification continues.
Here to discuss: Ryan Robinson, Deloitte Automotive Research Lead. Ryan, thank you for joining us this morning. As we look at this transition to EVs, we keep hearing that some of the demand is dropping, but what is the root cause of that? Is it just an inflation issue or is there something else? What is the influence?
Ryan Robinson: Hello Rochelle, thanks for joining us. So there’s an elephant in the room, and that’s likely the vehicle’s affordability. And that, through our efforts at CES, is actually impacting the demand and momentum for electric vehicle sales in the latest 2024 Global Consumer-Automotive Consumer Survey, which will be released today.
One of the questions we’ve been asking for years is: What type of engine do consumers most want in their next car? And our research shows that fewer consumers want a so-called traditional internal combustion engine. This suggests that it is slowly recovering.
Last year, approximately 58% of consumers said they wanted a good car. It’s about 67% now, so it’s been creeping up a little bit, and like I said, I think that has a lot to do with affordability. When you think about where consumers or U.S. consumers are right now, about 43% of consumers say they can’t afford a big unexpected expense in the next three months .
Half of consumers say they are concerned about their savings. And concern about credit card debt in our study has risen from about 23% this time last year to about 30% in our last research pulse just a few weeks ago. So there’s definitely an affordability issue there. And we think this is a big concern for the industry going forward.
Rachel Akuffo: So, Ryan, how much of a difference is there between what people are willing to pay for an EV based on your research and what some EV manufacturers are currently seeing?
Ryan Robinson: Yes, so overall our survey asked consumers how much they expected to pay for their next car. That is, the overall transaction price. Additionally, 8 out of 10 consumers say they expect to pay less than $50,000 for their next car.
What consumers are really concerned about, and the solution for them, is the monthly payment. And, again, one could argue that the concerns are at least as great, if not more so, given the impact of current interest rate increases. 84% of consumers said they expected their monthly bill to be less than $600.
And when you consider the current average monthly payment, many people, many of whom tally this number on a monthly basis, record incomes of well over $700. So there’s this sort of Grand Canyon chasm between what consumers expect to pay for their next car and the reality of market conditions.
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