(NewsNation) — Demand for electric vehicles has fallen, leaving automakers to offer discounts and readjust their goals for EV production.
Automakers have invested billions in EVs, working to market electric cars to consumers who aren’t looking for luxury models or hoping to be early adopters. But like other industries, they’re facing hurdles in the current economy.
High interest rates may discourage consumers from taking out loans, and the cost of electric vehicles is still much higher than gas-powered vehicles, even after federal tax credits are applied. New rules have also cut the number of cars eligible for subsidies. Batteries for EVs are also more expensive than those for combustion engines.
Consumers may also have concerns about charging their EVs, as the number of charging ports in the U.S. remains too low to support the estimated demand for electric vehicles. Charging may also be an obstacle for renters who may not have access to a charging port or be able to install one. For homeowners, equipping a garage to allow for EV charging can also represent an added expense.
In response, some manufacturers have cut prices to compensate for changes to the federal subsidy, while others have slowed plans to expand EV production.
General Motors has paused plans for expanding electric pickup production, while Ford is delaying billions in EV investment.
While automakers may be wary of cooling demand, the market still rose 50% in the third quarter of 2023.