Electric vehicle incentives in the United States are expected to wield a heavy hand in terms of 2023 fourth quarter and 2024 first quarter sales volumes, according to a recent update from J.D. Power.
“‘What do I have to do to put you in a new EV today?’” That’s a question more automobile dealers will be asking in the fourth quarter of 2023 as a complex mix of growing consumer interest, new vehicle incentives and a dislocation of conventional pricing dynamics has new-vehicle shoppers scratching their heads and looking for guidance,” said J.D. Power in its October E-Vision Intelligence Report.
The report notes that consumers in the U.S. that are eligible for the $7,500 Clean Vehicle Credit will be able to transfer those funds to the dealer as a downpayment at the point of sale — starting in January 2024.
So far total EV market share in the U.S. is 9 per cent, while total EV sales are on track to reach 3 million by the end of 2023. What this means, according to J.D. Power, is that the stage is set for “rapid-fire growth.”
Although, exactly when those sales will occur and which OEMs and dealers will benefit the most from the EV transformation is expected to come down to two things: strategically using incentives, and properly educating consumers on “the intricacies of EV pricing.”
In addition, they will have to continue to climb the hurdle that is EV affordability, even amid improvements in pricing. J.D. Power said that, when it comes to the compact SUV segment, “a stark discrepancy” remains between EV and internal combustion engine vehicle pricing. That is problematic because it is the highest volume retail sales segment in the U.S.
“The dislocation has introduced a new cross-shopping phenomenon for the 67 per cent of prospective EV buyers who are also considering non-EVs, whereby for the same price as a mass market EV, they could purchase a luxury ICE vehicle of the same size,” said J.D. Power. Still, movement is expected within the EV market.
