Alex Lawrence, a dealer in Salt Lake City who specializes in used electric vehicles, has seen a change over the past year in the kinds of customers who are coming into his showroom. They used to be well-heeled professionals who could drop $70,000 on a Rivian luxury pickup truck.
Recently, Lawrence said, customers have been snapping up used Teslas for a little more than $20,000, after applying a $4,000 federal tax credit.
“We’re seeing younger people,” Lawrence said. “We are seeing more blue-collar and entry-level white-collar people. The purchase price of the car has suddenly become in reach.”
Regarded by conservative politicians and other critics as playthings of the liberal elite, EVs are fast becoming more accessible. Prices are falling because of increased competition, lower raw-material costs and more efficient manufacturing. Federal tax credits of up to $7,500 for new EVs, often augmented by thousands of dollars in state incentives, push prices even lower.
At the same time, technology is improving quickly and making EVs more practical. Cars that can travel more than 300 miles on a fully charged battery are becoming common, and charging times are dropping below 30 minutes. The number of fast chargers, which can top up a battery in less than half an hour, grew 36% from April 2023 to this past April.
Carmakers including Tesla, Ford, General Motors and Stellantis, owner of Jeep, have announced plans for EVs that would sell new for as little as $25,000.
“The EV market has hit an inflection point,” said Randy Parker, CEO of Hyundai Motor America, which will begin producing EVs at a factory in Georgia by the end of the year. “The early adopters have come. They’ve got their cars. Now you’re starting to see us transition to a mass market.”
(Tristan Spinski/The New York Times) Electric vehicles for sale at a Green Wave Electric Vehicles dealership, which sells pre-owned electric vehicles, in North Hampton, N.H., May 29, 2024.
All of this is good news for proponents of EVs and the Biden administration, which is aiming for half of new cars sold to be electric by 2030 as part of the president’s plan to combat climate change. Even if Republicans gain control of the White House and Congress and follow through on promises to dismantle EV subsidies, they may not be able to undo the market forces pushing down prices.
“There may be some hiccups in the exact pace and scale of EV sales if there are major policy changes, but I wouldn’t expect the EV market to flatline,” said Peter Slowik, who leads research on passenger cars at the International Council on Clean Transportation, a research organization. “Most automakers are committed to an all-electric future, and many are planning on a timeline that goes far beyond the next administration.”
EVs, sales of which have slowed in recent months, are still more expensive than gasoline models, costing an average of $55,252 in the United States in April, according to estimates by Kelley Blue Book. That is a decline of 9% from April 2023 but still about $6,700 more than the average for all vehicles.
But Slowik’s group estimates that cars and SUVs capable of traveling 400 miles on a full battery will cost less than cars with internal combustion engines in 2030, even before taking into account government subsidies. (Pickup trucks, which require bigger batteries, will take a little longer, not reaching parity for 400-mile models until 2033.)
Those calculations do not take into account lower fuel and maintenance costs that strengthen the financial argument for EVs. Electricity is almost always cheaper per mile than gasoline, and battery-powered vehicles don’t need oil changes, engine air filters or spark plugs. For people who drive a lot, EVs may already be a better deal. At the same time, some automakers are offering strong discounts on EV models as an enticement for buyers.
Although prices are clearly trending downward, there are risks. China supplies more than half of the lithium-ion batteries used in cars sold in the United States, according to Interact Analysis, a research firm. Those batteries will become more expensive because the Biden administration announced in May that it would raise tariffs on them to 25% from 7.5%.
Many companies are building battery factories in the United States and Canada, but most of these won’t produce enough batteries to replace China for several years.
Raw materials are another risk. The price of lithium and other materials required for batteries has plunged in the past 12 months, making EVs cheaper. But commodity prices could soar again.
The recent slowdown in the growth of EV sales has prompted Tesla, Ford and others to delay plans to expand manufacturing. But many analysts expect sales to pick up as a glut of models pushes down prices and as the charging network grows. High prices and the fear of not being able to find a place to recharge are the two biggest reasons people hesitate to buy an EV, surveys show.
For many people, the car’s price is not the only expense to consider. People who live in apartments often depend on public charging plugs. Public charging, besides being less convenient, tends to be more costly than charging at home.
Still, the forces pushing prices down are powerful. Manufacturing costs are dropping as traditional carmakers, who were slow to sell EVs, start to apply their decades of experience with mass production to the new technology.
Later this year, for example, General Motors will begin selling an electric version of its Chevrolet Equinox SUV that will have a range of more than 300 miles and sell for less than $30,000 after the $7,500 federal tax credit. And the company plans to sell an even cheaper car, a new Chevrolet Bolt, next year.
This article originally appeared in The New York Times.
