There is no doubt that electric vehicles (EV) are seeing an increase in inventory and sales. Globally, electric vehicle sales doubled in 2021 and sales are still strong in 2022. In the second quarter of 2022, EV sales were 5.6% of the total auto market, up 2.7% from the same time a year ago. Consumers are embracing the EV market for its clean energy and solid performing vehicles.
Pricing remains a sticking point with consumers though as many EVs are priced in the range of $50,000 – $100,000 and up. Sure, consumers want to help the environment, but they also face a very real limitation on spending for EVs.
To help position it as a more general option, General Motors plans to release an EV Chevy Equinox in fall 2023 at the lower price point of $30,000. Today, there are few models of any type of EV below $35,000. Complicating the pricing, the costs of battery materials (such as lithium and nickel) have risen significantly. On average, U.S. buyers paid $66,000 for an EV, an increase of 28% from a year ago according to J.D. Power research.
The Inflation Reduction Act is one option to help consumers lower the costs. It offers up to $7,500 in federal EV tax credits, but only for models that meet certain domestic-production requirements. While both new and used cars qualify, there are other restrictions that can limit how much tax credit a consumer receives including income limits and vehicle list prices.
Are you ready to make the leap to an EV vehicle?
Group Activities and Discussion Questions:
- Poll students: What is their perception of pricing for EVs in today’s market?
- Have students research prices for EV automobiles and SUVs. Build a spreadsheet with information about select vehicles such as Volkswagen, Tesla, Kia, and Toyota.
- Have students research the Inflation Reduction Act for federal EV tax credits. What are the caveats?
- Show video from WSJ about the EV discounts: https://www.wsj.com/video/series/george-downs/the-climate-bill-unlocks-new-ev-discounts-but-not-everyones-a-winner/26F2FC57-3150-4311-AE3E-705E554AB4D6
- Another classroom discussion can focus on how the Inflation Reduction Act fits into an environmental scan for the EV market.
Sources: Colias, M. (8 September 2022). GM courts mainstream buyers with $30,000 electric Chevy Equinox. Wall Street Journal.; Forbes growth sector: Electric vehicle sales and the new electric economy have arrived (24 September 2022). Forbes.