There is currently a mixed message being conveyed to Americans regarding electric vehicles. On one hand, they are experiencing a surge in popularity. However, on the other hand, they are also accumulating in large numbers at car dealerships due to lack of demand.

Both things are accurate, especially since the upcoming election will be the first to bring attention to EVs as a topic in the campaign.

The market for electric vehicles (EVs) in the United States is expanding, although not as rapidly as it was a few months ago. In November, Americans set a new record by purchasing one million EVs in a single year, according to the National Automobile Dealers Association.

Simultaneously, there are some popular electric vehicles that have been struggling to make sales, such as the Ford Motor Lightning F-150. Recently, the production goals for this vehicle were reduced by 50%.

According to Alan Baum, a freelance auto analyst in Detroit, the response to all inquiries concerning EVs is “yes,” but with a caveat.

The Democratic party believes that President Joe Biden’s strong endorsement of electric vehicles will have positive effects on both the economy and the environment. However, some members of the Republican party view it as a government intervention that only benefits the wealthy. The outcome of the following months will reveal if voters associate the introduction of electric cars with political agendas, which could impact both Biden’s supporters in the American auto industry and his overall climate objectives.

Former President Donald Trump stated at a rally in Ankeny, Iowa that electric cars have limitations in terms of distance and cost. He suggested that they may only be suitable for short trips to nearby stores.

It is evident that the electric vehicle (EV) has taken a different path after a gradual 15-year effort to become widely used. The affluent early adopters have obtained their desired EVs, while less affluent buyers are gradually entering the market. This group of interested buyers still has concerns about the accessibility of charging stations, the selection of affordable vehicles, and if the current models meet their requirements.

In the upcoming year, American motorists may have the opportunity to purchase a variety of less expensive electric vehicles, as well as have access to an increasing number of charging stations. Certain models will also qualify for a partial $7,500 tax credit.

During this period, individuals will also be electing a president and a fresh Congress, particularly in districts where expectations for economic development depend on the establishment of new battery and electric vehicle production facilities. The market’s unease casts doubt on whether EVs will experience the projected growth or fulfill Biden’s targets for reducing carbon emissions from the transportation industry.

If the political party in control of the White House were to change, there may be efforts to delay or hinder incentives for electric vehicles and undo Biden’s emissions regulations that were created to complement these incentives.

The transportation regulations proposed by the Biden administration are met with opposition from congressional Republicans and other groups who agree with Trump’s stance. Recently, the House approved a bill, with some support from Democrats, that would prevent the implementation of an EPA tailpipe rule that would essentially mandate 67 percent of new cars to be electric by 2032.

However, the Biden administration strongly opposes the notion of a decline in electric vehicle sales.

In November, the Energy Department released a statement to address inaccuracies regarding electric vehicle sales. On a recent call with reporters, Ali Zaidi, White House national climate adviser, discussed the significant increase in EV sales and positive feedback from customers.

According to Zaidi, the pattern observed here is consistent and long-term, regardless of how it is evaluated. In fact, it is gaining momentum, which can be attributed to President Biden’s guidance.

The Biden campaign is also expressing their thoughts on the matter. According to a statement from campaign spokesperson Seth Schuster, Trump is indifferent to the truth and potential impact of EVs.

Schuster stated that President Biden’s efforts to bring back auto manufacturing in the United States are beyond what Republicans could have imagined. Going back to Trump’s unsuccessful plans would result in outsourcing manufacturing jobs and give China an advantage in the electric vehicle competition.

Dueling data

According to data from Argonne National Laboratory, although the number of electric vehicles (EVs) sold in 2021 has surpassed one million, the most significant increase occurred seven months ago, with May’s sales being nearly 77% higher than those in May of 2020. However, by November, this monthly comparison had decreased to 27%.

According to a market update by BloombergNEF, Colin McKerracher, a transportation analyst, stated that this growth rate would be highly satisfactory for most industries.

In August, a lot of political discussion was sparked by Cox Automotive’s report on car sales data. It showed that electric vehicles (EVs) were taking 98 days to sell on dealer lots, while internal combustion engine vehicles only took 58 days. However, this data did not include the popular EV brand Tesla, which sells directly to consumers and bypasses dealers. Despite this, the gap between dealer sales for EVs and traditional cars has continued to increase since the summer. In November, traditional cars stayed on lots for 70 days while EVs took 117 days to sell.

As the initial figures began to land, Republican presidential candidates were already

voicing disagreement with Biden’s attempts

The data showing an increase in EVs on dealership lots quickly became a popular topic of discussion to promote the use of electric vehicles.

“We will require the auto industry to produce a product that is not in demand,” stated Republican Representative Lisa McClain, who represents a district near Detroit. “Attempting to mandate the sale of a product that consumers are not interested in purchasing and will result in fewer job opportunities will not be successful.”

McClain stated that she has had discussions with Trump regarding utilizing federal regulations in the presidential race.

According to her, the current situation is not well-received in my district, which relies heavily on automobile manufacturing. Let’s face it, Michigan holds a lot of sway in the upcoming election.

The EVs that have been promoted as quintessentially American and were manufactured by US automakers are currently experiencing poor sales. Analysts are unsure of the reason behind this.

Based on information from WardsAuto and the National Automobile Dealers Association, the Mustang Mach-E, Ford’s main electric crossover vehicle, remained unsold on dealership premises for 141 days in the timeframe of January 2022 to November. The Cadillac Lyriq, an early and prominent electric vehicle from General Motors, spent 176 days in the same situation.

Democrats in Congress believe that the recent decrease in the rate of growth is not significant and is just a small deviation from the overall trend, which shows that Americans are purchasing an increasing number of electric vehicles. They argue that as time goes on, the growing number of electric cars on the road will help reduce the country’s carbon emissions and prove the worth of investing in the EV supply chain, while also leading to lower prices.

Senator Martin Heinrich (D-New Mexico) stated in an interview that he believes the negative narrative and data are not in agreement.

Several experts on EV policy claim that they are not concerned.

According to Experian’s data, while Ford and GM have seen slower sales of electric vehicles, other companies such as Hyundai Motor, Rivian Automotive, BMW, and Mercedes Benz have experienced strong sales. In particular, the Hyundai Ioniq 5 has been selling quickly, with WardsAuto reporting sales within just 60 days.

Tony Dutzik, a policy analyst at Frontier Group, a think tank that specializes in environmental concerns, stated that the challenges faced by specific automakers should not be mistaken for the overall state of the electric vehicle market.

Wrong assumptions

Automakers are partly responsible for the inflated expectations surrounding the potential success of electric vehicles.

The cause can be traced back to the disruption of supply chains caused by the Covid-19 pandemic.

During the pandemic lockdowns, consumers were eager to replace their old cars, leading to a surge in purchases of electric vehicles. This high demand caused challenges for automakers to meet the supply. As a result, dealers were able to sell EVs at marked-up prices, and the demand for these vehicles appeared to be endless. In response, major automakers like GM and Ford have announced ambitious production plans.

In March, Ford announced its plan to increase production of the electric F-150 by three times, with a goal of producing 3,200 vehicles per week. However, two weeks ago, Ford revised this plan and reduced production to 1,600 vehicles per week due to changes in market demand.

According to Arun Kumar, a managing director at AlixPartners, the expectations they had during Covid did not align with the reality after Covid.

Due to a rise in inflation, the cost of electric vehicles, which were already pricier than conventional cars, became unaffordable for the majority of buyers. Additionally, the high interest rates on auto loans made them too expensive for most people. The pandemic also revealed that there is a limited market of customers willing to spend $50,000 or higher on a new type of vehicle.

According to Kumar, as you progress beyond the initial group of people who adopt something new, you enter the next stage known as the early majority. The early majority consists of individuals who are still uncertain and contemplating whether they should make a purchase, taking into account factors such as cost competitiveness.

According to a survey conducted by S&P Global, in 2021, 86% of consumers expressed interest in purchasing an electric vehicle (EV). However, in May of this year, that number dropped to 67%. The primary reason given for this decline was the high cost of EVs, surpassing concerns about their limited battery range and the availability of charging stations.

The White House is representing these fluctuating statistics as a minor deviation in a larger trend.

“In the initial stages, ascertaining the demand may result in occasional overestimation and underestimation as individuals navigate the best way to cater to their customers’ needs. However, I believe that there was an excessive and exaggerated reaction to the summer inventory data,” stated a high-ranking member of the White House, speaking on condition of anonymity to openly address the issue.

The 2024 factor

One of the most important inquiries for 2024 is the future of electric vehicle demand.

Many new vehicles are anticipated to be available at dealerships in the upcoming year, providing consumers with more options and potentially cheaper prices. One such vehicle is the Chevy Equinox EV, a popular compact crossover, which will be released with a starting price of $35,000. Additionally, larger vehicles designed for families, such as the Volkswagen ID. Buzz and the Kia EV9, are also expected to be released soon.

“Targeting a specific market segment that appeals to American drivers,” stated Baum, an independent auto analyst based in Detroit.

Supporters of the administration argue that Biden should continue to support the significant funding he has allocated towards developing a domestic supply chain for electric vehicles, while allowing automakers to handle the sales of these vehicles.

“Constructing these factories in areas that are in need of employment will leave a lasting impact on people’s minds in the years to come,” stated Heinrich. “As long as we, as a country, fulfill our responsibility to not just purchase EVs from other countries, the EVs will naturally attract buyers.”

This report was contributed by Kelsey Tamborrino.