Skip to content

Electric Cars Are Failing To Woo Average American

Jon LeSage,

Electric cars are having a hard time wooing the average American and the high prices are just one roadblock.  No wonder that 80% of tax credits are taken by households making more than $100,000 a year. 

Volkswagen is spending $2 billion in America to correct its “Dieselgate” cheating scandal — and to move beyond the typical upscale electric car shopper that tends to be much more interested in driving a Tesla Model S or Model X.

Electrify America, Volkswagen’s subsidiary carrying out the Dieselgate settlement by supporting electric vehicle purchases and charging infrastructure, has been making deals to bring fast chargers to shopping malls. After making an agreement this month to bring 100 charging locations in 34 states to Walmart, more retail outlets were just added. That includes Target, Sheetz, Casey’s General Stores, and Alltown convenience stores.

Walmart and Target shoppers tend to be quite different than Tesla owners, and those driving other electric vehicles from BMW, Chevrolet, Nissan, and other makers. Driving around upscale neighborhoods is usually the best place to find a Model S or Model X parked in the driveway of a high market-value home.

The average consumer car shopper — along with fleet managers overseeing acquisitions of a large part of new vehicles sales — have been tough to reach. Buying and driving their first EVs can raise concerns over driving range, safety, and how reliable the new technology will be over their typical lifecycle ownership.

Building a charging infrastructure under Electrify America, Tesla Superchargers, and other charging networks, is considered critical for reaching mass adoption of EVs. Bringing down the purchase price is another wall to climb — as demonstrated by Tesla investing heavily in its Model 3 with a $35,000 starting price, and General Motors focusing on the Chevrolet Bolt that starts at $37,500. Federal and state incentives bring those costs down even more.

The average pre-incentive price of 10 electric cars with the longest per-charge driving ranges was nearly $42,000 last year. That compares with about $34,000 for an average new car and $20,000 for an average new compact car.

Purchase incentives such as rebates and tax credits have been critical for electric vehicle sales to increase in the U.S., China, and Europe. But who’s tapping into these incentives?

new study by Pacific Research Institute analyzed where tax credits in the U.S. have gone to. Reviewing the latest figures on tax credits for EV purchases, 79 percent were taken by consumers with annual household incomes greater than $100,000 per year. Extending that out a bit showed that households with $50,000 per year or more made up 99 percent of EV tax credits.

Full story