Not only do today's car buyers have to pick what brand, color and features they want, they must now also choose among a dizzying array of propulsion systems.
- Gas? Hybrid? Plug-in hybrid? Electric? Hydrogen? The options are confounding to the average consumer.
Why it matters: This is what car-buying will be like for the foreseeable future amid the messy, multi-decade transition from gasoline to electric vehicles (EVs).
The big picture: The EV shift was never going to be clean and swift, even though some companies (and investors) projected hockey stick-like growth — up and to the right — based on Tesla's meteoric rise.
- Now that the early adopter era is over, those rosy sales expectations have met reality.
- Even Tesla is getting a cold slap in the face: Its first-quarter deliveries were down 8.5% this year from the same period a year earlier.
- Other carmakers' EV sales are still growing, however. Hyundai's EV sales rose 62% this past quarter compared to the previous year, for example, while Toyota and Ford reported strong sales of gas-electric hybrids.
Reality check: The EV slowdown is real — their first-quarter growth rate was a tepid 2.7% vs. last year's torrid 47% — while hybrids are becoming more popular.
- The Biden administration gets it: It recently revised a new auto emissions rule to include hybrids and plug-in hybrids in addition to full EVs, a nod to the political and market realities of the slower-than-expected shift.
By the numbers: Americans bought a record 1.2 million EVs in 2023, according to Cox Automotive's Kelley Blue Book. That's equivalent to 7.6% of the total U.S. new-vehicle market, up from 5.9% in 2022.
- But EVs' share fell back to 7.1% in the first three months of 2024.
- Cox is sticking with its forecast for 10% EV share by the end of 2024 — for now at least. Throw in hybrids and plug-in hybrids, and Cox says "electrified" vehicles could comprise almost 24% of new car sales by then.
Between the lines: Wider EV adoption faces two big hurdles: affordability and charging access.
Most EVs are still priced like luxury cars.
- Prices have come down a bit, but their average selling price in February was about $52,300 — almost 20% higher than mainstream non-luxury vehicles, according to Cox.
- Cheaper EVs will help attract mainstream buyers, but stubbornly high interest rates are making car loans more expensive.
Anxiety about where to plug in, meanwhile, has kept many potential EV buyers on the fence.
- The U.S. currently has about 175,800 public charging ports, with an average of 900 new chargers opening each week, according to federal data.
- Of those, about 41,400 are so-called "DC fast chargers" — the type you'd want for long trips.
- The rest are slower "destination chargers" meant for topping off your EV while you're shopping, working or eating.
Yes, but: Charging network needs vary depending on where EV owners live, the Energy Department notes.
- The agency expects 33 million EVs to be on the road by 2030. Of those, 60% will be in the suburbs, 20% in rural areas and another 20% in cities.
- While fast-chargers will be needed in cities, slower chargers should suffice in single-family homes in suburban and rural areas, DOE says.
What we're watching: The first federally funded high-speed charging stations are finally opening, but many such projects could take a couple more years to be completed.
- Meanwhile, a new charging company called IONNA — a joint venture by seven automakers — plans to build 30,000 fast chargers in cities and along U.S. highways starting in 2024.
- And a portion of Tesla's Supercharger network is now open to other vehicles, democratizing access.
The bottom line: Consumers, not policymakers or automakers, will decide when the time is right to go electric.
Note: Cox Automotive's parent company, Cox Enterprises, also owns Axios.
