To hear it from the business press, 2024 is going to be another year of growth for the American electric-vehicle industry. Since 2020, manufacturers have been smashing one annual growth record after another, fueled by a mix of hype, new technology, and government money that was supposed to practically guarantee a dramatic shift toward electric vehicles. Cox Automotive, whose parent company publishes the Kelley Blue Book, predicted another 1 million-plus sales in the U.S. by the end of December, even as it acknowledged that growth was slowing. “You may have seen dire headlines that EV sales have dried up. They haven’t,” wrote Car and Driver. Fast Company, too, predicted the market is “actually poised to grow in 2024.” At first blush, it makes sense. Teslas and Rivians and the like are fairly commonplace now, at least in large cities, and there are going to be more models than ever to choose from. The Biden administration has been pushing car companies to sell more of them as part of its broad climate agenda, with subsidies as a carrot for consumers and the threat of fines for manufacturers as a stick. And anyway, these things are part of the net-zero future — right?

The problem with all these predictions is that they’re based on one single, very blurry metric — momentum. That is, there’s this idea that past years have been great for EV sales, so drivers are going to keep on buying them in ever-larger numbers for the foreseeable future. But there are some signs that the EV market in the U.S. has already topped — at least for a while. Instead of momentum, the key concerns for buyers appear to be cost and reliability. Take a look at Germany, which pulled its subsidies and saw sales fall by 14 percent. In the U.S., Ford has seen its EV sales drop 11 percent after one of its marquee EVs was tarnished for its battery issues, while another became ineligible for a $7,500 tax break. With interest rates likely to stay high through the year, costs unlikely to come down too much, and charging infrastructure and battery issues looming large for consumers, there is now a small, contrarian group of industry experts who is starting to see last year’s U.S. record of 1.2 million vehicles sold as the peak, at least for the next few years. “If you think about kind of the EV trajectory, the story builds off of positive sentiment and a lot of climate goodwill,” says Robert Jenkins, a research director at the London Stock Exchange Group. “There’s a myriad of different things working against a near-term rise of EV sales in the U.S. and globally, except for China. In terms of whether or not people are going to hit their sales numbers, I would say over the next year and a half, at least, it’s a dicey proposition.”

Jenkins is an outlier among EV analysts — but his call differs by a matter of degrees from other industry experts. “There clearly is a stalling of some demand and buying patterns in the EV industry,” according to a January report from Wedbush analyst Dan Ives, an influential voice in the tech world. Cox Automotive is projecting a modest amount of growth this year, even though the pace of growth is going to be small, in part from more charging stations getting built throughout the country and car dealers slashing prices even more than they have. “What we think is helping drive that is certainly more price pressure, and dealers are going to get more focused: I need to move this inventory,” says Mark Schirmer, a spokesman for Cox Automotive. While Jenkins has said that he thinks the charging infrastructure will eventually improve, car companies still have to make a profit, and it will be hard for dealers to cut prices much more to make them competitive.

EVs aren’t novelties anymore. According to the International Energy Agency, there have been about 4.6 million electric vehicles sold in the U.S. since 2016, if you count some types of hybrid cars, with the clear majority of them sold since 2021. Last year was the best yet for the industry, selling 1.2 million EVs domestically, with the Tesla Model Y rating as one of the best-selling cars of any kind in the country. But the industry is still laboring under red-hot projections from earlier this decade that assumed sustained, rapid growth. In a sense, the kind of “numbers go up” thinking more typical of crypto bros than the century-old auto industry has become conventional wisdom. In 2024, though, the question is who, exactly, is left to buy? Elon Musk fanboys and other tech trendsetters have all basically bought their EVs, and now major automakers have to contend with customers who don’t really care about the cars. “Early adopters have come and gone after the product has been out there for well over a decade. You feel like you’ve tapped them out,” says Jenkins.

It’s still early in the year — too early to say with confidence where sales numbers will end up in 2024 and whether it will mark the beginning of a longer sales downtrend. But if you want to hear the case for a pessimistic perspective on EV sales, look no further than the industry’s biggest manufacturers. In late January, Musk found he could no longer tap his apparently endless supply of optimism, reported an “underwhelming” quarter at Tesla, and made no major commitments for business targets in 2024. The company — which sold half of all U.S. EVs last year, its lowest market share here ever — admitted that “growth rate may be notably lower” for the foreseeable future. From there, Musk’s largest competitors in the EV space also reined in expectations. Ford slashed its production of F-150 Lightnings, and its dealers are revolting at having to sell the dud. General Motors slashed its sales projections for its fully plug-in cars. Volvo cut off funding for its Chinese EV partnership, Polestar. French automaker Renault canceled the initial public offering of its entrant, blaming the market. “Anybody who wants to write the ‘EVs are dead’ story, write it at the end of the first quarter,” says Schirmer. “We do think that the pace of growth is slowing.”

The electric F-150 is one of the clearest case studies for how EV hype has collided with reality. The classic version of the pickup — the one you fill up at a gas station — has been the best-selling car in the U.S. for nearly 50 years, and making an electric version would seem, at first blush, to be an easy win. But the Lightning did not sell well last year, with fewer than 25,000 sold — less than 5 percent of the 700,000 of Ford’s F-series line that sold last year. Part of this comes down to the type of person who would buy the pickup. Ford’s F-series is a known quantity, and any changes to the model have always taken a long time for buyers to accept — it took about a decade for drivers to accept versions of the truck with six- or four-piston engines after years with eight pistons, according to Schirmer. “That shift took a long time, and that was easy compared to what we’re trying to get now,” he says. For drivers, this boils down to so-called range anxiety, or the fear that a car’s engine will sputter out faster than expected. One recently wrote about how chilly, but not freezing, temperatures shaved off about 50 miles in expected range after 200 miles of driving. “To me, this seems bad. Basically means I’m losing 25 percent of my range to nothing more than weather that isn’t even that cold,” the driver wrote. Others complain that the software is buggy and looks outdated.

These complaints track broadly with consumer polling around electric cars. A Pew poll from July shows broad anxiety, with most Americans thinking that there aren’t enough charging stations around where they live to justify buying a car. What might be even more worrying is that support for phasing out gas vehicles has actually dropped over the past two years, so much so that more than a third of Democrats are against what would be a signature policy plan from the Biden administration.

The story of EV success is, in large part, a story about subsidies and government regulations — not just in the U.S. but around the world. Now that subsidies are shrinking or ending altogether, customers are already shunning the vehicles. After Germany abruptly ended its €6,700 subsidy for 2024, EV sales dropped immediately — even after carmakers said they would cover some of those costs. Similar cuts are taking place in France and are likely to happen soon in Norway. In the U.S., the number of cars that qualified for a $7,500 rebate dropped, with Ford’s month-over-month January-sales slide an early warning sign. And the opposite also appears to be true. According to Bloomberg, sales in China — where subsidies will continue through at least 2028 — are expected to rise to nearly 10 million this year, making the country the biggest single market in the world.

Zoom out a bit, and it’s a bad time for car buyers in general. Blame interest rates. According to a new study from the Federal Reserve Bank of New York, the number of auto-loan delinquencies surpassed pre-pandemic levels at the end of last year. People who took out loans during the last two years have been under the most stress, according to the central bank branch, because “buyers during these years faced higher car prices and may have been pressed to borrow more, and at higher interest rates.” In other words, people who borrowed money at a high interest rate to buy an expensive vehicle are more likely than they have in recent years to be struggling to pay for their car on time. Since cars are usually the collateral for a loan, that means that more people are finding their vehicles are getting repossessed, too.

The New York Fed doesn’t break out electric-car owners, but rates have been such a problem for EV manufacturers that Musk has complained about them. The cost of an EV is, on average, $53,000 — still about 4 percent more expensive than your typical car, even though prices have fallen dramatically in the past year. If a driver with stellar credit finances 80 percent of that purchase, as is the typical amount people borrow, that’s more than $11,000 in interest at today’s rates.

This leads back to the automakers themselves. Car manufacturers can cut prices — and they have — but new, expensive factories and higher wages for workers make it harder for them to make a profit. And this is key. All the major EV companies are publicly traded, meaning that management has to answer to shareholders who care about the value of their stock holdings. The fact that consumer demand for battery-electric vehicles is falling means that they will push something else to keep their profits from falling. For Ford and GM, this means selling more cars with combustion engines or, in the case of GM, plug-in hybrids. (GM said it expects to sell at least 200,000 EVs this year, which would roughly triple its sales from last year, a projection that Schirmer calls “optimistic.”) Then there are hybrid cars that rely solely on gas, which appear to be cannibalizing the EV market. According to the U.S. Energy Information Administration, those non-plug-in hybrids accounted for about 8 to 9 percent of light-vehicle sales in the U.S. in the third quarter of last year, while full-on battery-electric vehicles was 7 percent.

Long term, EVs are probably going to dominate the U.S. market. By 2030, more than half of cars have to be fully electric in order to comply with federal standards. If they don’t, automakers will get penalized with an estimated billions of dollars in fines. (Other markets are even stricter, with California and the European Union requiring all new cars be electric by 2035.) But if the U.S. is going to have a meaningfully electrified fleet, it needs the Big Three to sell these cars, which means making models that both appeal to the masses and earn them a profit — something that they haven’t quite figured out how to do. “The impetus to try to make sure they hit the 2030 targets is going to be overshadowed by the need to make profits,” Jenkins says. “It’s as simple as that.”

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