Experts in the auto industry believe affordability is the remaining hurdle preventing electric vehicle (EV) sales from rising.
Dave Katarski, the COO of Feldman Automotive Group, observed that people tend to buy EVs when they can afford them.
“We’re seeing a ton of people flock to them—when they can afford them. EVs, when the price and payment is there, they’re not afraid to buy them. The biggest issue in our industry is affordability,” Katarski said during the Automotive News Congress in Pontiac, Michigan.
This year, many automakers and businesses related to the auto industry have seen a slowdown in EV demand, leading some to conclude that consumers don’t want electric vehicles.
However, many other experts counter that demand for EVs isn’t the issue; it’s affordability. Indeed, in Europe, auto experts have noted a steady stream of interest in EVs, but due to prices, people have turned to more affordable plug-in hybrid options.
According to J.D. Power, the average transaction price for EV purchases was around $13,000 more than the typical gasoline-powered vehicle in the United States in the first quarter of 2024. Electric vehicle prices averaged around $58,000 in Q1 2024. Many auto leaders, including Rivian CEO RJ Scaringe, have emphasized the need for EVs under $50,000.
Automakers recognize the demand for more affordable electric vehicles. A few have already announced plans to produce EVs with starting prices well below $50,000. For instance, Tesla’s next-generation EV is expected to cost around $25,000 to $30,000. Volkswagen has also announced plans to release a vehicle in Europe around €20,000.
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