Emanuel M. Schwermer
Consumer demand for electric vehicles in the United States has declined since last year. Not only have recent sales and deliveries reports from electric vehicle makers been disappointing based on previous expectations, but there are also some signs that electric vehicle sales growth rates are slowing. It may remain weak even as the overall EV market share rises.
For the first time in the J.D. Power US EV Purchase Consideration Study, a measure of new car buyers’ interest declined from the previous year. J.D. Power said a study this year revealed that 24% of shoppers say they are “very likely” to consider purchasing an electric vehicle, down from 26% a year ago, while the percentage of shoppers who say they are “generally likely” is lower. To consider purchasing an electric vehicle, the proportion of electric vehicles will fall to 58% from 61% in 2023. “As the industry moves toward widespread consumer adoption, the main barriers to getting consumers to drive electric vehicles are the ongoing shortage of affordable vehicles, concerns Related to charging, lack of knowledge about electric vehicle ownership, including incentives, noted Stuart Stroup, executive director of electric vehicle intelligence at JD Power.
“As understanding of electric vehicle incentives increases, so does the likelihood of considering them. However, nearly 40% of shoppers say they do not have a strong understanding of these incentives. Prioritize initiatives and efforts to educate consumers about electric vehicle offerings – including incentives and How they work is vital to accelerating market growth.”
Other factors said to be contributing to the decline in demand for electric vehicles include the unavailability of charging stations; Fuel prices decline year on year; stubborn inflation and high interest rates; And the disappointing growth in the availability of models. It is worth noting that many automakers have postponed the launch of electric car models, and some production plans have shifted more towards hybrid and plug-in hybrid cars. The J.D. Power survey also revealed that without a second car, shoppers tend to be more critical of the logistics of electric vehicle ownership.
More importantly, electric vehicle makers may face lower-than-expected demand from Generation Z (born between 1997 and 2012) and Millennials/Gen Y (born between 1981 and 1996) shoppers. While 24% of Gen Z shoppers and 32% of Gen Y shoppers say they’re “very likely” to consider purchasing an electric vehicle, both of those marks are down from last year largely due to a lack of affordable cars for their group Younger buyers.
The list of auto-related stocks that have fallen the most over the past 52 weeks includes EV names like Faraday Future Intelligent Electric (FFIE) -97%, Chijet Motor(CJET) -94%, Canoo (GOEV) -82%, Workhorse Group ( WKHS) -76%, Luminar Technologies (LAZR) -74%, Polestar Automotive (PSNY) -65%, Lucid Group (LCID) -60%, Centntro (CENN) -45%, NIO (New York Stock Exchange: New) -34%, Kandi Technologies (KNDI) -33%, Rivian Automotive (RIVN) -23%, and XPeng (XPEV) -14%. Meanwhile, Tesla (Nasdaq: Tesla) has gained approximately 2% over the past year. However, this return for the EV juggernaut underperforms legacy auto stocks like Toyota Motor (TM) +55%, Ferrari (RACE) +44%, GM (New York Stock Exchange: General Motors) +41%, Stellantis (STLA) +40%, Honda Motor (HMC) +18%, and Ford Motor (New York Stock Exchange: F) +8% during the same period.
