The electric vehicle segment is experiencing a watershed year as long-held aspirations for the automotive industry meet with reality.

Electric car prices have taken a nosedive this year, led by Tesla’s price cuts and deepened further by economic changes that have made shoppers more frugal. A change in the average EV shopper and buyer is also rocking the market, as the well of wealthy early adopters dries up and dealers are left to try to pitch EVs over hybrids and gas-powered vehicles. At the same time, a proliferation of new EVs has given shoppers more choices than ever before.

All of this has culminated in what can feel like contradicting outcomes: the electric vehicle market is going to notch another record year of growth, and at the same time, demand for these cars is showing early signs of slowing down.

The EV price war

At the start of the year, in response to bloated inventory and slowing sales, Tesla CEO Elon Musk slashed prices on his most popular models. This kicked off a price war in the segment that dragged down the value of new EVs from Ford and GM.

Overall, the price war has brought down the average price paid for an EV by more than 17% this year. But even with this drop, the average price paid for an electric car still hovered above $50,000 this fall, well out of reach for many car shoppers.

The EV plateau

Electric car sales have been on the rise for the last few years as technology improved and more options became available. But dealers are starting to warn about a change in the average EV shopper that could bring a plateau to the segment.

With wealthy early adopters largely sated some 10 years after Tesla started selling the Model S, it’s now up to companies and their dealers to pitch EVs to a more average shopper – a difficult task so far.

EV options are getting better

Shoppers interested in going electric have many more options than they did a few years ago when Tesla was really the only electric car with enough range and access to public charging to meet the average customer’s needs.

In the last few years, some of the biggest car companies have introduced new electric models, while a slew of new startups have also entered the race. This stable of options is only expected to grow in the next five years as the auto industry looks to wean itself off of fossil fuels.

 

Extracted in full from:  https://www.businessinsider.com/inside-the-ev-reckoning-electric-car-demand-sales-2023-11

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