Local car dealers are urging President Joe Biden to reconsider his mandate that two-thirds of all new cars be electric vehicles (EVs) by 2032. In a letter penned to Biden, nearly 4,000 dealerships expressed their concern over the slumping demand for EVs which is negatively impacting their business. The letter explained that while there was initial excitement surrounding EVs, the current supply of unsold battery electric vehicles (BEVs) is surging due to slow sales, despite price cuts and generous government incentives.
To gain a better understanding of this issue and the political sway these dealerships hold, I spoke with Nora Naughton, who is a senior reporter at Business Insider covering the auto industry, specifically EVs.
There appears to be a gap between the demand and supply of electric vehicles at the moment. While affluent early adopters initially drove the demand, average car buyers are not readily choosing EVs. However, the automotive industry has been developing EVs primarily for wealthy early adopters.
Regarding the affordability of EVs, Naughton mentioned that EVs are indeed trending towards becoming more affordable, but they still fall within the $50,000 price range, which doesn’t cater to the average car buyer’s budget. To make these vehicles accessible to a wider market, EVs would need to be priced within the $25,000 to $35,000 range.
Naughton speculated that Biden’s potential response to the letter could involve offering more incentives to buyers. She pointed out that government discounts and incentives are significant drivers of EV sales.
Car dealerships have a considerable amount of political influence, with vast wealth and close relationships with local and state representatives in Congress. They play an essential role in detecting shifts in demand before manufacturers, and are currently facing significant losses from the sale of EVs.
Consumers interested in purchasing an EV may find promising deals, especially with an oversupply of specific models. Vehicles such as the Ford Mach-E and F-150 Lightning are reportedly piling up on dealer lots, presenting an opportunity for a good bargain.
