Edmunds Analysis Says Tax Credit Cuts Put Mainstream Electric Vehicle Market in Jeopardy
SANTA MONICA, CA — April 7, 2017— As companies such as Tesla and General Motors launch new electric vehicles (EVs) designed to attract the masses, a new report from Edmunds shows that without generous tax incentives, it will be challenging for either company to meet sales goals for these vehicles.
"With gas prices at a relative low and the popularity of SUVs and trucks hitting all-time highs, the EV market is at a crossroads," said Jessica Caldwell, executive director of industry analysis for Edmunds. "While the high-end EV market most likely has the ability to hold steady, our analysis shows that the average car shopper still needs a significant financial incentive to choose an electric vehicle over a traditional counterpart."
To get a deep understanding of how financial incentives for EVs affect the market, Edmunds experts conducted an extensive analysis of what happened in Georgia following the expiration of their EV tax credit as a model for what could happen should policy shift at the federal level. Edmunds learned that:
While sales of PHEVs and EVs have grown over the last five years — 136,295 in 2016 compared to 17,425 in 2011 — they still only constituted 1 percent of the market at the end of the first quarter of this year.
"It will take a significant rise in gas prices or stricter government mandates to drive sales of EVs at high volume," Caldwell says. "People want a car that makes their lives easier, and given the infrastructure challenges and battery limitations, right now EVs don't do that. The majority of consumers are still looking for the best price on a vehicle that meets their needs, and until EVs can be used as seamlessly as their traditional engine counterparts, mass adoption will continue to be a challenge without some kind of financial incentive."
To read the full analysis, visit the Edmunds Industry Center.
Edmunds is the leading car information and shopping platform, helping millions of visitors each month find their perfect car. With products like Edmunds Your Price, Your Lease and Used+, shoppers can buy smarter with instant, upfront prices for cars and trucks currently for sale at more than 13,000 dealer franchises across the U.S. Edmunds' in-house team of unbiased car shopping experts provide industry-leading vehicle reviews and shopping tips, as well as welcome all car-shopping questions at our Help Center, via email at firstname.lastname@example.org and on Twitter and Facebook. Edmunds is based in Santa Monica, Calif. and has a satellite office in downtown Detroit, Mich.