(Bloomberg) —
For many carmakers, the end of last year was defined by plans to pump the brakes on making new EVs: Ford, General Motors and Volkswagen all trimmed output of electric models or walked back production goals in recent months.
Despite that, EV-curious consumers in the US will soon have an easier time finding electric models that appeal. Carmakers are expected to launch at least 24 all-new, all-battery-powered vehicles in the country this year, representing a nearly 50% increase in the number of models currently on the market. The new arrivals will also boost EVs’ attractiveness to a broader demographic of buyers: Five of them are expected to start at less than $50,000.
“This is all new territory,” said Allyson Harwood, senior editor at Kelley Blue Book. “And there are positive signs that more affordable electric vehicles will be coming, which is really encouraging.”
Affordability has emerged as a key hurdle to further EV adoption in the US, where the average price for an electric car hovered at $51,000 in December, 4% higher than the average for a new car overall, according to Cox Automotive.
The challenge for both EV-makers and drivers has to do with simple economics: Massive batteries are still far more expensive than gasoline engines, so prices remain relatively high and profit margins and sales volumes predictably low. Plunging prices for lithium and other metals used in large-format batteries have yet to show up on window stickers. But the parade of more affordable offerings suggests some price thawing on the horizon.
“I don’t think 2024 is going to be the year of the mass-market EV,” said BloombergNEF analyst Corey Canter. “We’re not completely there yet. But it feels like a lot of the automakers are really setting themselves up for next year.”
To learn more about all of the battery-powered models currently available in the US, check out Bloomberg Green’s Electric Car Ratings. Here’s a look at what’s debuting this year.
Volvo EX30 | The $36,000 SUV
Harwood at Kelley Blue Book is particularly keen on this small SUV, which is slated to make its way into the wild this summer at a starting price of $36,245. An early version she tested was zippy to drive and its spartan cockpit included a large touchscreen that could be customized like an iPhone. “I found it really impressive,” Harwood said. “If the production version is anything like the one I drove, I think it’s going to be a huge hit.”
Honda Prologue | The default “buy”
Harwood expects the EV market to get another boost from Honda, which will deliver its first fully electric vehicle, the Prologue, to US drivers in coming months. While the car will start around $48,000, it’s hard to overstate its potential. Millions of drivers buy Honda by default because of the brand’s reputation for reliability and value.
Chevy, Mini, Fiat | The mass-market arrivals
Chevrolet’s Equinox EV, another mass-market aspirant, will start around the same price as the Prologue when it ships later this year. Mini, meanwhile, will add two new models: the Aceman EV (around $33,000) and the larger Countryman Electric ($46,000). Finally, Fiat will try its luck at the bottom of the market with the 500e ($32,500), which has proven popular in Europe.
Chevy, GMC, Ram | The truck wars go electric
Three electric trucks — the Chevrolet Silverado, GMC Sierra and Ram 1500 — are slated hit the US market this year. All three rigs are late to the party, having been beaten by Ford’s F-150 Lightning and the long-delayed Tesla Cybertruck. But when they do hit the streets, it will up the ante on the country’s truck wars, a segment that has long been the de facto scorecard for US auto profits.
Acura, Cadillac, Mercedes | The posh SUVs
Large SUVs pair best with relatively large, expensive batteries, so a luxurious price tag helps cover the cost. Realizing as much, auto executives are launching another wave of products targeted at the affluent soccer dads and ski moms, including the Acura ZDX, Cadillac Escalade IQ, Lucid Gravity, Maserati Grecale Folgore, Mercedes EQG, Polestar 3 and Volvo EX90. A fully electric Range Rover could launch by year-end, too.
Although EV adoption has slowed in the US, it’s still outpacing the car market at large. Last year, sales of electric cars grew by 49% in the country, according to BloombergNEF, and roughly 9% of new cars sold were battery-powered. This year, EV sales are expected to grow by another third, compared with a 2% increase in the US car market overall. Somewhere between half and two-thirds of US drivers say they want to go electric.
But high prices aren’t the only obstacle: Stubbornly elevated interest rates and concerns about charging infrastructure continue to discourage would-be buyers. So do inventory issues, as states that lack emissions mandates are less likely to get an influx of new EV models. Searching from the center of North Dakota for 100 miles in any direction, for example, turns up just 16 Ford Mustang Mach-Es listed for sale on cars.com at the moment. Doing the same research in Sacramento, California, yields nearly 1,200 electric Mustangs.
For many of these hurdles, the solution lies in the problem: Make more electric cars. Producing EVs at scale reduces the cost of each one; prices follow and profit margins improve. That’s been the playbook at Tesla, which is still the leading seller of EVs in the US. It’s also the blueprint at companies like Rivian, which don’t have gas-powered models to fall back on. But for now, many of those EV upstarts are also struggling to get gross margins into the black.
Ultimately, carmakers that can crack the code on affordability — while still turning a profit — will be the ones that really drive adoption and, just as critically, imitation. Nissan and Chevy have each managed a sub-$30,000 EV in the US (the Leaf and Bolt, respectively), but Cantor is surprised that none of the new models coming this year will come in under that mark. “Maybe everyone is waiting to see when Tesla does it,” he said.
To contact the author of this story:
Kyle Stock in Denver at kstock6@bloomberg.net
© 2024 Bloomberg L.P.
