Reading Elizabeth Blackstock Publish the other day contemplating whether or not Toyota’s marketing plan for its first electric vehicle, the bZ4X, would work – something popped into my head. I realized that automakers don’t seem to want EVs in the hands of the masses – and it all has to do with cost, because every EV on sale costs far too much for the average American.
Elizabeth went on to say in the article that Toyota has set its target demographic for the bZ4x at “slightly older people, probably between 35 and 55, who earn at least $100,000 a year and are probably looking to make the transition. to their very first electric vehicle”. It’s Toyota’s first electric vehicle, and already they’re targeting high-income households.
I know I know. Automakers are businesses whose purpose is to make money. The problem, however, is the pressure for electrification on Americans. This push is coming from both sides with consumers stuck in the middle: many Car manufacturers to have engaged stop making gas-powered cars before the end of the decade or in 2030; various states have already called for or pushed through legislation prohibiting the sale of gasoline-powered vehicles. Both have the support of the federal government. The Biden Administration also wants mass consumer adoption of electric vehicles, in favor of a 50% electric vehicle market share by 2030. All are ambitious goals and constitute good public relations and political weight. But the problem is that most EVs on sale or coming soon are priced incredibly out of people’s reach.
Electric vehicle prices are really the elephant in the room. In January 2022, the average transaction price for an EV was $62,876. That’s more than 93 percent of median american household income in 2020. Electric vehicles for the affluent only push that average price higher. You think I’m lying? Go see for yourself. You have to let go over $60,000 to get into a Tesla Model Y. And that’s only for now, as Tesla seems to be raising prices every few months. A Porsche Taycan starts at almost $83,000 in its base versions with its Audi e-tron GT cousin having a six-figure starting price of $102,400; Lucid has a cheaper Air coming, but it’ll still cost you over $77,000 to get one; Cadillac’s LYRIQ? It’s supposed to start at $60,000.
Even electric vehicles from major automakers will cost you upwards of $40,000. the Ford Mustang Mach-E costs nearly $44,000 for the base Select version with 247 miles of range; A Hyundai Ioniq5 starts at just over $43,000 – and good luck finding one as dealers stock them closer to $50,000 and up. Kia says its EV6 should start just under $41,000, but in the real world you can barely find them less than $50,000.
And don’t buy or tell me “What about the EV tax creditThis needs to be put on billboards all over the country: The EV tax credit is not a reduction on the price of the vehicle.
Feds and automakers sold it as such to make EV prices easier to swallow. The “tax credit” does not work like that. A dealer isn’t going to cut $7,500 off the price of the electric vehicle you’re trying to buy. Instead, you buy the electric vehicle and, at tax time, you get a $7,500 credit on your taxes. That’s it. There are regional discounts on electric vehicles, but it’s still not a discount on the purchase price. Most of them have to be requested and you have to wait for a check to come in the mail if you use one. And if where you live is something like californiayou may be waiting months for that check.
You can also say “But the automaker said the cheap stuff is coming!” Is it, however? Everything known to be on the way is still years away. Chevy has its Blazer MC and Equinox Electric vehicles are coming but not before the end of 2023. Chrysler has the really necessary Airflow, but it’s not until 2025. Fisker says his ocean will start at $37,499. But come on, it’s Fisker.
And it seems like $40,000 is the new sweet spot for most cars, so while some cheap EVs are coming, I don’t see most coming below that price. Mercedes made bubbles recently, when a company representative said that current electric vehicle technology cannot produce cheap electric vehicles. And of the nearly 30 EVs currently on sale here in the US, only two start under $40,000: the Nissan Leaf ($27,400) and the Chevy Bolt/EUV ($31,500); $33,500 for the VUE).
Right now, electric vehicles are a luxury, not a mass production vehicle. Time and again, studies have confirmed that many people can’t afford to go greenand electric vehicles are the big culprits.
So when will cheaper electric vehicles come? I wish I could give you an answer. But again, automakers can’t keep trying to sell the mass adoption of electric vehicles to the public while launching vehicles that are priced out of reach for most Americans. With record prices for vehicles and record profits for automakers, they also don’t seem to be in a rush to move on to make cheap products.