In recent months, there has been a noticeable shift among American car buyers as many are opting for hybrid and gasoline-powered vehicles instead of electric cars. This change follows the expiration of a federal tax credit of $7,500, which has left many buyers reconsidering their choices. Reports indicate that 42.6% of those trading in electric vehicles (EVs) in the second quarter have chosen to switch to combustion engines, while 15.6% moved to hybrids, compared to just 34.6% who purchased another EV.
A study by Cox Automotive revealed that this year, around 22% of buyers showed interest in new hybrid models, while only 10% considered buying an electric vehicle. The shrinking variety of available electric models also appears to be influencing buyer decisions.
One significant factor driving this trend is the cost of ownership. With the federal tax credit no longer available, the average lease price for an electric car hit approximately $707 last month, which is about $100 higher than leasing a conventional gasoline vehicle. Experts highlight that a price of around $30,000 is considered ideal for new cars in the U.S.
Conversely, European markets are seeing a different trend. In July, registrations for battery-electric vehicles rose by 51%, representing 25% of the total market share in Europe, with countries like France and Germany showing particularly strong growth. However, it’s essential to note that even in Europe, hybrids remain the most popular choice, accounting for 37.3% of new vehicle registrations in the first half of the year.
The European Commission recently proposed adjustments to its emissions targets. Initially set to achieve a complete phase-out of certain combustion engines by 2035, this goal has now been softened to a 90% reduction. This change would allow plug-in hybrids and other similar vehicles to remain available for sale after 2035, while still pushing towards increased sales of battery-electric vehicles.
Analysts believe that as prices for electric cars begin to drop, American consumers may once again shift back toward electric options. Meanwhile, Europe continues to support hybrid vehicles, ensuring that infrastructure for charging electric cars is developed even as they prepare for future regulations.
