Has enthusiasm for electric cars waned?

General Motors, Ford and Tesla have warned of a slowdown in the electric vehicle market as they say demand could fall.

Automakers say rising credit costs are the main problem, but some dealers say electric vehicles cost more than conventional vehicles. According to them, consumers are concerned about the range of electric vehicles and insufficient infrastructure.

In a Cox Automotive survey, 53% of consumers said electric vehicles will eventually replace internal combustion engines, but less than a third of dealers agreed. Several dealers interviewed by CNBC said that electric vehicles are taking longer to sell and that there is an imbalance between supply and demand.

Ford announced two weeks ago that it would increase production of its F-150 hybrid pickup truck due to declining demand for its all-electric model.

Proponents of electric vehicles insist that the demand is still there, but that consumers are turning away only temporarily because of high interest rates that make it difficult to buy electric vehicles, which are usually more expensive than the average vehicle.

Q: Has enthusiasm for electric cars waned?

Phil Blair, Manpower

YEAH: But that’s a small moment. As someone who has only purchased electric cars in the last five purchases, they are the future of automotive transportation. Yes, there was a stalemate. Interest rates, concerns about extensive charging infrastructure and the availability of cheaper models are valid concerns. New homes with charging capacity are a clear sign.

Gary London, London Moeder Advisors

NO: Technological advances often take decades to achieve market acceptance. Electric cars and possibly hydrogen and other technologies are in their infancy. The issues of autonomy, price and even its actual contribution to reducing the carbon footprint will be resolved over time. Personal view: I am now driving my second electric vehicle. They ride better, are easier to make and contain cutting edge technology. And driving them is more fun.

Alan Gin, University of San Diego

YEAH: One factor is the increase in interest rates, which makes it difficult to buy the most expensive electric cars. Another is that the price of gasoline has fallen after a recent increase. However, a big reason may be that early adopters of this technology have already gravitated towards electric cars. Reaching the next level of customers could require a game-changer like Toyota’s solid-state battery technology, which could increase range to 700 or 900 miles and cut charging times to less than 10 minutes.

Bob Rauch, RA Rauch & Associates

YEAH: Enthusiasm for electric cars has waned, even as their numbers continue to grow. GM is delaying the opening of a major electric truck plant in Michigan, and Ford is considering canceling production of its F-150 Lightning electric pickup truck. Tesla deliveries continue to grow, but at a slower pace, despite sharp price cuts. There are concerns about loading vehicles for long journeys, prices and requirements for government subsidies.

James Hamilton, UC San Diego

YEAH: Or at least the rate of revenue growth has slowed. The first wave of EV buyers were households with higher incomes and very concerned about the environment. Adoption may be slower in other demographics. Historically higher interest rates reduce sales of all vehicles and significantly discourage sales of more expensive cars, such as electric cars. The final transition is inevitable, but it may come a bit more slowly than some thought 12 months ago.

Austin Neudecker, Weave Growth

NO: As with all new technologies, electric cars were initially bought by technophile enthusiasts and idealists. Today, the economy is positive for many consumers, especially single-family homeowners. Rising interest rates, the recent buying spree and lack of awareness are causing a temporary drop in demand. The fear of the unknown (range/charger/technology) and the timing of the car change have so far deterred others. Over time, additional exposure, improved features, increased competition, gas price uncertainty, and environmental awareness will lead to widespread adoption.

Chris Van Gorder, Scripps Health

NO: I think the desire for EVs is still there, but as noted, high interest rates, lack of necessary infrastructure, and limited vehicle charging capacity will slow sales. As autonomy capacity, infrastructure and charging speed increase and prices and interest rates decrease, sales will improve. Electric hybrids will continue to bridge the gap as drivers begin to try EVs.

Norm Miller, University of San Diego

NO: Electric cars are relatively more expensive cars for now, even if they are cheaper to buy. When budgets are subject to higher interest rates, consumers turn to cheaper substitutes. The gasoline Subaru Crosstrek starts at $24,995, while the Subaru Solterra EV starts at $44,995. That makes a huge difference to the average consumer. As interest rates rise, more expensive options, including electric cars, become less attractive. Electric cars are here to stay and will become more affordable over time with cheaper batteries. It’s the only thing I’ve driven since 2012.

Jamie Moraga, Franklin Revere

NO: Consumer interest in electric vehicles remains, and this will only grow over time as battery technology and remote charging networks improve. If price was a factor, automakers like Tesla recently cut prices on some of their models, and rising interest rates are finally stabilizing. As gas prices continue to rise, EVs remain a good choice for long-term fuel savings, lower maintenance costs and tax incentives.

David Ely, San Diego State University

YEAH: Now that the first EV adopters have bought it, it’s normal for enthusiasm to wane. Range anxiety and high interest rates are leading many buyers to delay the transition to an electric car. EV sales continue to grow, but at a slower pace. EV sales growth would have been lower had there not been significant price cuts by manufacturers. This indicates that demand is not meeting expectations and needs to be matched with supply.

Ray Major, SANDAG

YEAH: Early adopters of electric cars and technology enthusiasts are already driving electric cars regardless of price. Concerns about autonomy, access to charging stations, charging time, cost and vehicle life are some of the reasons why not all have been supported. Nationally, customers in colder climates have significantly lower battery life than customers in Southern California. Enthusiasm for electric cars has slowed, and full adoption will take decades, not years.

Caroline Freund, School of Global Policy and Strategy, University of California, San Diego

NO: Despite Tesla CEO Elon Musk’s waning enthusiasm, electric cars remain a hot commodity, with tons of new models available. Adoption of new technologies tends to follow an S-curve: slow at first, then accelerating, and finally stabilizing. The sale of electric cars is no exception. Sales were fairly steady through 2020, rebounded in 2021, and are likely to remain strong for some time before leveling off.

Haney Hong, San Diego County Taxpayers Association

NO: While it may be more expensive to finance a car purchase, gas prices have skyrocketed. In addition, federal and state tax incentives are substantial. I know anecdotally that there are still many people in the market for electric vehicles because there are plenty of reasons for someone to buy one. Now, if there is any decline, it will probably be less than the demand for petrol vehicles.

Kelly Cunningham, San Diego Institute for Economic Research

YEAH: Electric cars continue to have a promising technological development, but the potential use has its limits, which may not cover all transportation needs. Prices and risks should not be imposed on citizens with fewer resources in favor of wealthy investors and buyers. Electric cars will continue to be an important investment for those able and willing to take the risk. Governments should not impose mandates or subsidize developments that may prove counterproductive or ineffective.

Lynn Reaser, Economist

YEAH: Several factors are slowing sales beyond early adopters. First, the limited autonomy is very worrying. Second, the recharge time is a multiple of the few minutes it takes to refuel an internal combustion vehicle. Third, the limited number of charging stations makes it difficult to sell. Fourthly, the problem is high prices with various subsidies. Fifth, the risk of battery ignition is a concern. Finally, a limiting factor is poorer performance in cold weather.

Have an idea for an Econometer question? Email me at phillip.molnar@sduniontribune.com. Follow me in the threads: @phillip020

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