Summary
- New discounts and financing options are helping increase adoption rates of electric vehicles
- Average price of new EVs is declining due to more affordable models and discounting
- JD Power EV Index showed a record high score of 56 in July, marking fifth straight month of increase
- Increased availability and pricing alignment have led to 28% of new-vehicle shoppers considering a battery electric vehicle
- More electric SUVs and pickup trucks available, contributing to expected increase in electric vehicle retail sales
Article
A recent study by JD Power has shown that new discounts and financing options are helping to drive increased adoption rates of electric vehicles (EVs). The average price of new EVs is declining due to the introduction of more affordable models and increased discounting across the sector. The JD Power EV Index, which tracks the prices of EVs compared to gas-powered vehicles, reached a record-high score of 56 out of 100 in July, marking the fifth consecutive month of growth in parity between EVs and traditional vehicles.
Despite a high level of interest from consumers in adopting EVs, the industry has not seen a significant increase in adoption rates compared to the previous year. However, availability of EVs has improved, and pricing incentives have played a crucial role in making EVs more affordable, particularly in popular compact and midsize mass-market segments. Mass market and premium EVs are now at or above parity with gas-powered alternatives in terms of cost of ownership, further incentivizing buyers to make the switch to electric.
According to JD Power Vice President, Electric Vehicle Practice Elizabeth Krear, battery-powered EV monthly retail sales reached 9.2% in June and July. In addition to lower prices, increased interest from buyers can also be attributed to the expanding charging infrastructure network, with companies like Ford and Rivian gaining access to Tesla’s Supercharger network. This infrastructure expansion is making it easier for consumers to make the transition to EVs and is likely to further drive adoption rates in the future.
The automotive industry is expected to see a strong rebound in sales, with JD Power predicting U.S. automotive sales to reach 1.4 million in August, up 4.2% year-over-year. The availability of more electric SUVs and pickup trucks is also contributing to the growing adoption of EVs, as these vehicles are expected to make up a significant portion of new vehicle retail sales in August. Tesla, with its vertically integrated business model, is positioned well to capitalize on the increasing demand for affordable EVs.
Traditional automakers like Ford and General Motors are facing challenges in making profitable EVs, with Ford recently announcing changes to its EV lineup to cut costs. As the industry works towards making EVs more affordable while maintaining profitability, the JD Power survey suggests that consumer demand may outpace expectations in the coming year if incentives and lower costs continue to drive adoption rates. Overall, the shift towards electric mobility is gaining momentum, driven by a combination of pricing incentives, expanded charging infrastructure, and a growing portfolio of EV models.
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