I think a big part of it is the nature of the US car market over the past 10 years, where the growth has come from sales of “premium” vehicles. The standard and budget market segments have underperformed and thus most US car companies haven’t invested in them much. Consumer spending is increasingly driven by the wealthiest 10% of the population. Everyone else is struggling and cutting back where ever they can, that means buying used cars and holding on to their current cars as long as they can, if they’re even in a position to own a car. The middle and low end consumer is doing so poorly that they’re not just moving down market, they’re not buying at all.
EVs just aren’t super competitive in the premium market. One of the biggest real selling points of Electric vehicles is their low operating cost. Electricity is cheaper than gas, way less maintenance is needed, and the most expensive and failure prone parts are absent, reducing repair costs. To a wealthy person, none of that is particularly compelling. What can an EV sell on in a premium segment? Acceleration and the “saving the environment” vibes, and that’s just not compelling enough to take significant market share.
So why isn’t what remains of the budget market dominated by EVs? Because there are no Budget EVs on the US market. The cheapest EV on the US market is the Chevy bolt and that’s got an MSRP of around 30,000 dollars. None of the companies are willing to invest the money needed to make a budget EV production line and the required supply chains. They’d rather take their capital and put it in to high margin premium vehicles, and service the anemic budget market with legacy production lines.
I think a big part of it is the nature of the US car market over the past 10 years, where the growth has come from sales of “premium” vehicles. The standard and budget market segments have underperformed and thus most US car companies haven’t invested in them much. Consumer spending is increasingly driven by the wealthiest 10% of the population. Everyone else is struggling and cutting back where ever they can, that means buying used cars and holding on to their current cars as long as they can, if they’re even in a position to own a car. The middle and low end consumer is doing so poorly that they’re not just moving down market, they’re not buying at all.
EVs just aren’t super competitive in the premium market. One of the biggest real selling points of Electric vehicles is their low operating cost. Electricity is cheaper than gas, way less maintenance is needed, and the most expensive and failure prone parts are absent, reducing repair costs. To a wealthy person, none of that is particularly compelling. What can an EV sell on in a premium segment? Acceleration and the “saving the environment” vibes, and that’s just not compelling enough to take significant market share.
So why isn’t what remains of the budget market dominated by EVs? Because there are no Budget EVs on the US market. The cheapest EV on the US market is the Chevy bolt and that’s got an MSRP of around 30,000 dollars. None of the companies are willing to invest the money needed to make a budget EV production line and the required supply chains. They’d rather take their capital and put it in to high margin premium vehicles, and service the anemic budget market with legacy production lines.