(MENAFN) Despite achieving record market share and sales in the United States this year, the growth of electric vehicles (EVs) is starting to decelerate, falling short of the ambitious goals set by the auto industry to transition away from combustion engines. The U.S. has hit a significant milestone with over 1 million new EVs sold in 2023, constituting 7.5 percent of total U.S. sales through November, as reported by Motorintelligence.com. While automakers like Ford have celebrated a 43 percent increase in EV sales year over year, including popular models like the electric Mustang Mach E SUV and the F-150 Lightning pickup, the growth is considerably slower compared to the remarkable 90 percent year-over-year expansion experienced last summer.
One contributing factor to the slowdown is the change in market dynamics. Last summer, the EV industry witnessed substantial growth amid high demand, low inventories, and optimistic sales forecasts from automakers. The appeal of EVs was accentuated when gasoline prices approached USD5 per gallon. However, the current scenario is different, with gasoline prices dropping to around USD3 per gallon nationwide. Additionally, the average transaction price for an EV, without incentives, has decreased to just under USD52,000. The market has shifted from tech-savvy early adopters to more price-sensitive mainstream buyers who are reluctant to pay a premium for EVs compared to gasoline or hybrid vehicles.
Several challenges continue to impact EV adoption. The availability of EV models, charging infrastructure location, cost, and convenience remain concerns for potential buyers. The market has also transitioned to mainstream buyers who prioritize cost-effectiveness over the environmental benefits of EVs. Despite the current slowdown, addressing these challenges is crucial for the auto industry to meet climate change goals, as a substantial share of greenhouse gas emissions is attributed to the transportation sector.
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