The CEO of Ford Motor (NYSE:F), Jim Farley, stated that his company is not advancing forward as quickly as planned on electric vehicles (EVs) or battery electric vehicles (BEVs) due to consumer concerns. Statistically, EV sales have stalled in 2024, with sales increasing just 3% in the first quarter compared to a 46% jump in the year-ago quarter.
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Farley attributes this decline to several factors, including charging infrastructure, vehicle affordability, and consumer uncertainty.
Charging Infrastructure Lags Behind Schedule
U.S. President Biden vowed in 2022 to build 500,000 EV charging stations from coast to coast by 2030. According to the White House, a key objective of these stations is to boost Americans’ confidence in purchasing and driving electric vehicles.
But now, more than two years after Congress allocated $7.5 billion to help build out those stations, only seven EV charging stations are up and running across four states. This did little to provide confidence in the would-be electric car buyer.
For comparison, the U.S. has about 176,000 public charging ports, while China has approximately 15 times that number. This disparity highlights why U.S. consumers are tapping the brakes on parking a new EV in their garage.
EV Affordability Remains a Challenge
The average new car in the U.S. costs about $48,500, while the average new battery-electric vehicle (BEV) costs approximately $55,000. This price difference makes it difficult for mainstream consumers to justify the premium for an EV.
Resale Value and Insurance Costs Impact EV Adoption
EV resale values have been a concern, with the average price of a Tesla (TSLA) in the U.S. dropping by 20% since 2022. Additionally, insurance costs have increased by nearly 50% since the pandemic, making car ownership more expensive overall.
Hybrids Gain Popularity as Consumers Seek Cost Savings
Ford’s hybrid sales have surged, with a 51% year-over-year increase in the first five months of 2024.
Consumers are attracted to hybrids because they can easily calculate the savings on gas, making them a more attractive option compared to all-electric vehicles.
Key Takeaway
Jim Farley highlighted the challenges facing the EV market, including charging infrastructure, vehicle affordability, and consumer uncertainty. As the industry works to address these issues, the future of EVs remains uncertain.
Ford’s strategy of offering traditional, hybrid, and all-electric vehicles aims to cater to a wide range of consumer preferences and budgets.
