Yahoo Finance 3 Reasons People Are Avoiding Buying EVs Despite Price Cuts and Tax Breaks
The road to electric vehicle ownership has been made somewhat easier thanks to price cuts and tax credits.
Although tax credits have become more stringent as of Jan. 1 — for instance, EVs now need to meet more rigorous requirements to qualify for the full $7,500 clean vehicle tax credit — they are still a big help for many Americans looking to purchase an electric vehicle.
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And prices for new EVs have been declining. The price for the Mercedes SL-Class model fell 22.3% from October 2022 to October 2023, for instance, while the Ford F-150 Lightning saw a 13.5% drop in price, according to the October 2023 CarGurus Intelligence Report.
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Yet, against that backdrop, 57% of Americans say their next car purchase likely won’t be an EV, according to a survey of 1,025 Americans conducted last fall by Ipsos and Yahoo Finance.
So why are people avoiding buying EVs?
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Sticker Shock
According to Steve Birkett, senior EV editor, FindTheBestCarPrice.com, EVs still have a sticker shock problem for mainstream buyers, with a premium of $5,000 to $10,000 for an EV not uncommon when compared to a gasoline equivalent.
“The easiest comparison comes in the form of the Hyundai Kona Electric, which has a combustion sibling,” said Birkett.
The version with an engine up front starts at around $25,000, while the one with a battery beneath its seats starts at just under $33,000.
“That $8,000 difference could potentially be wiped out by federal EV incentives on a leased Kona Electric — or manufacturer discounts and state incentives for those who buy in an EV-friendly state — but it’s still an eye-opener for anyone just starting to explore electric vehicles,” he said.
Total Cost of Ownership
Many of the EV models on the market today have yet to complete a full cycle of ownership, Birkett said, so ownership costs can be difficult to assess.
In addition, costs for both EV and combustion vehicles fluctuate depending on the price of gasoline and electricity rates, as well as factors like location, driving habits and vehicle segment.
“Comparing an electric SUV that hops between cities and ski towns in EV-friendly Colorado to its gasoline alternative, for example, is very different from comparing huge diesel trucks that have to tow heavy loads long distances up in Wyoming to an all-electric truck with limited range,” said Birkett.
The best advice for buyers is to run the numbers for comparable models, as they apply to their area, across five to 10 years of the vehicle’s life, he added.
Cost of Home Charging
Charging your EV at home can run up into the thousands of dollars if you’re in an old house that needs some electrical work, but it’s important to note that these are upgrades to your home that should serve you across multiple vehicles, said Birkett.
“Many EV owners can also find alternatives to expensive upgrades, such as using an existing 240 volt outlet or even charging on a regular household outlet if their daily driving is in line with the average American household,” he noted.
Charging Landscape in the U.S.
Another possible reason for buyers sitting out the next round of EV adoption is the charging landscape across North America.
“Although countless projects are underway to address charging gaps, and the industry has finally aligned on a single connector type (Tesla’s NACS plug, which will become the J3400 standard), that transition is only just getting underway as we enter 2024,” said Birkett.
Potential EV buyers may decide to stick with what they know and jump into an efficient hybrid lease for a few years and revisit electric models once charging has become easier and availability of more models has driven down prices, he added.
Dispelling Myths
A record 1.2 million EVs were sold in the U.S. in 2023, according to Kelley Blue Book, but according to Peter Glenn, founder and co-CEO of EV finance platform EV Life, most Americans still believe the myth that EVs are an out-of-reach luxury.
“However, as more of our customers see the savings data for themselves, they realize they can own an EV like a Tesla for a monthly payment competitive with a Camry,” he said. “We’re seeing demand for EV Life continue to grow because we’re enabling Americans to break through the EV price barrier.”
Glenn added that to help dispel the misinformation about EVs being more expensive, EV Life recently launched a free EV Savings Calculator. This tool enables shoppers in all 50 states to rapidly qualify for EV tax credits, rebates, electric rate discounts, carpool stickers and other incentives for vehicles and home chargers.
“These incentives can total $12,000+ per vehicle,” he said.
The tool can also help buyers compare fuel savings on any electric vehicle versus a gas car, he noted.
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This article originally appeared on GOBankingRates.com: 3 Reasons People Are Avoiding Buying EVs Despite Price Cuts and Tax Breaks
