Some established automakers have recently suffered from waning demand for electric vehicles, prompting them to cancel or delay their electrification efforts. As EV-a2z previously reported, Ford will stall $12 billion in investments for its EV production push.
General Motors also decided to withdraw its set target of 400,000 EVs production through mid-2024. Moreover, German automaker VW Group stepped back from its proposed $2 billion investment in a new local factory.
All these plan changes are part of their efforts to avoid potential business losses, considering that the EV industry currently faces a slowdown following the 2021 sales peak.
High-interest rates
As Tesla CEO Elon Musk previously warned, the surging interest rates continue to discourage customers from buying electric vehicles. It significantly contributes to the waning demand in the EV market, causing automakers to push back their respective ambitious targets and strategies.
EV costs remain higher than their internal combustion engine-powered counterparts by more than 30% on average before tax credits and incentives.
Limited options
The limited number of available electric vehicles in the market compared to ICE-powered units makes it challenging for new customers to find the ideal model that meets their preferences and needs.
Up to this day, customers who are not well-engaged in the electric vehicle space may still think that sports cars and sedans are the only types available in the market. In contrast, there is already a fast-growing market for electric trucks, jeeps, and buses.
Unfamiliarity with the product
Most customers still have limited knowledge regarding electric vehicles. They must know that EVs are easier to produce than ICE models owing to their fewer moving parts.
EVs also offer more technological advancements and only need less maintenance compared to their gas- and diesel-based counterparts.
Range anxiety
The Department of Transportation’s data revealed that average US-based drivers take 37 miles daily, which EVs now can easily support with their more than 220 miles capacity.
Almost all EVs available today can enable a driving range of about 250 miles between chargers, while some models can even increase by twofold to more than 500 miles.
However, customers still cite range concerns in their hesitation towards buying an EV model.
Lack of charging network
The lack of a sufficient and reliable charging network remains among the top concerns of customers, discouraging them from joining the shift to e-mobility.
Compared to the prevalence of gas stations in the US, charging stations remain far behind due to their limited available locations. Some drivers succeed in finding a charging station, but they cannot be sure if the particular available stall is functional.
Safety concerns
Numerous studies and experimental initiatives have already proved that electric vehicles are just as safe as ICE-powered cars.
However, safety concerns remain among the top concerns of customers in buying EV models. Some cite battery fire risks and technological malfunctions. People’s safety concerns are understandable, considering that EVs are relatively new compared to traditional mobility.
In order to address these barriers that continuously weaken the demand for electric vehicles, automakers, and the government must intensify collaboration in promoting the transition. They must develop strategies to increase customer awareness about the technology’s benefits and correct myths that have long been affecting customers’ decisions.
