Electric vehicles (EVs) are piling up on car lots across the country as the green revolution hits a speed bump, data show.
EV inventories have increased by 506% from a year ago, with EVs sitting on lots for longer, according to CarGurus’ October report, released this month. EVs sit on the market an average 82 days versus 64 days for gas-powered vehicles, it said. In response to slowing demand, automakers like Ford and GM are cutting production.
“While consumers still have plenty of concerns surrounding an EV’s battery range, price remains the higher priority when purchasing an EV,” said Julia Martinez, an energy & auto analyst at business intelligence company Morning Consult, in a report.
Aren’t EV prices dropping though?
Helped by Tesla’s price cuts, the average price paid in September for a new EV fell to $50,683, from $52,212 in August and $65,295 a year earlier, with incentives representing 9.8% of the transaction price, or $4,991, according to car buying platform Cox Automotive.
Used EVs saw similar declines, with EVs 3 years old or less shedding 29.5%, car buying platform Edmunds said.
Even with those lower prices the new average EV list price was 28% higher than a gas vehicle last month, CarGurus said. That brings the cost for a 60-month loan with an interest rate of near 8% on an average new EV to $277 more a month than a gas car, it said.
Beyond the car itself, the total cost of ownership during the first five years is also higher. Installing at-home chargers can run about $2,000 upfront, and insurance generally costs more. You may save on fuel but with gas prices dropping for eight weeks in a row, that incentive’s waning.
Maintenance costs might be lower, but you'll likely buy more tires with heavier EVs running them down faster.
In early February, EVs cost consumers an average of $65,202 during the first five years, while gas vehicles cost $56,962, the National Automobile Dealers Association said.
Will giving EV tax credits upfront in January boost sales?
Starting Jan. 1, eligible buyers can take up to $7,500 in EV credits upfront instead of waiting until they file their taxes.
Some buyers might be encouraged to wait until January for that, but really “only a small fraction of well-researched consumers may be factoring in the updated tax credit guidance and waiting out the EV market until January 2024,” Edmunds analysts said in an email.
To help with price, some state and local tax credits also are available for additional vehicle and charger savings but are often too confusing and time consuming for most consumers to research, experts say. Only 30% of 1,025 adults surveyed by polling company Ipsos between Sept. 29 and Oct. 1 said they were familiar with government programs.
Consumers can use tools at Edmunds, Department of Energy, and nonprofit Electric for All to find state and local credits, but “making an expensive, long-term investment by purchasing an EV, even with the help of a tax credit, is still a major commitment in today’s inflationary market,” Martinez said.
Are prices the only thing holding EV buyers back?
Overall, 57% of respondents said they were not likely to purchase either a fully electric or plug-in hybrid the next time they purchase a vehicle and 11% said they didn’t know, Ipsos said.
If it were just about price, “it’s possible shoppers could look at (cheaper) second or third brands down their list, but it may not spur them to say they really need an EV,” said Mike Hanley, senior road test editor at car buying platform Cars.com. “It has to fit their lifestyle.”
Part of that is being able to keep driving trips short, having chargers nearby, which usually means city living, experts say. They also need time to charge their cars, which takes longer than refueling at a gas station, and working chargers.
A J.D. Power survey earlier this year said nearly 21% of consumers show up at a charging station only to find it’s broken. Additionally, overall satisfaction with speedier Level 2 public charging, which accounts for 71% of all public charging in America, declined 11 points.
What’s the verdict on EVs?
EV sales are expected to keep rising, with “the market firmly on track to surpass 1 million for the first time ever” in November, Cox said.
Still, as EV availability has lately grown “exponentially,” consumer acceptance has grown only linearly. “Those trends will likely continue, making for some very interesting market dynamics in the years ahead,” it said. “Change is never easy.”
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at email@example.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
This article originally appeared on USA TODAY: EV sales slowing, leaving an EV pile up on car lots. Here's why.