Americans are pumping the brakes on electric vehicle adoption: 'Affordability is a big issue'
Sales dropped after $7,500 new-vehicle credit terminated in September
Former Energy Secretary Dan Brouillette joins 'Varney & Co.' to discuss President Donald Trump's rescission of Biden-era fuel standards, electricity costs and his outlook on gas prices.
Interest in electric vehicles (EVs) is cooling among American consumers following the termination of federal tax incentives and amid persistent concerns over cost, repairs and charging access, analysts say.
Demand for EVs dropped following the Sept. 30 termination of federal EV tax credits — a $7,500 new-vehicle tax credit and $4,000 used-vehicle tax credit — which were eliminated under President Trump's "Big Beautiful Bill," signed into law in July.
The deadline triggered a surge of buyers, but sales have since slipped, Ivan Drury, director of insights at Edmunds, told FOX Business.
"If you look at the most recent months — so October, November — you're going to see that it hasn't come to a halt, but a noticeable drop," Drury said.
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Volkswagen pure electric vehicles are arranged in an orderly manner waiting to be shipped overseas in Longtan Port Area, Nanjing, Jiangsu Province, China. (Costfoto/NurPhoto via Getty Images / Getty Images)
With those incentives gone, the coming months will reflect what organic consumer interest looks like for EVs, Stephanie Valdez Streaty, director of industry insights at Cox Automotive, told FOX Business.
"I think in the next six months, we're probably going to really see the market get to that place of natural demand without that carrot of an incentive," Valdez Streaty said.
But the cooling trend began long before the credits expired. According to AAA's survey released in June, only 16% of U.S. adults said they were "very likely" or "likely" to purchase a fully electric vehicle as their next car, down two percentage points from last year and down nine percentage points from 2022.
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Electric vehicles sit parked at a Tesla charging station in Sausalito, Calif. (Justin Sullivan/Getty Images / Getty Images)
AAA found that high battery repair costs and purchase prices remained major barriers for consumers. EVs cost about $10,000 more on average compared to gas-powered vehicles, Valdez Streaty said.
"Affordability is a big issue with EV adoption," she said, adding that many consumers are unaware that EVS typically have a battery warranty of between eight and 10 years.
"Infrastructure is another barrier," Valdez Streaty said. "… I think consumers think about well, ‘What about when I have to go on that long commute or I have a vacation? I want to be able to have accessible, reliable, easy-to-use infrastructure.’"
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EVgo fast charging stations in South San Francisco, Calif. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
Former Energy Secretary Dan Brouillette recently said that he believes EVs will remain part of the auto market but "we have to understand where they fit."
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"It's a niche market at the moment — probably will continue to be that way for some time," Brouillette told FOX Business Network’s "Varney & Co." on Thursday. "And I think the rules that the president is rescinding … he's absolutely correct in this."
On Wednesday, Trump announced a reset of federal fuel standards that heightened under the Biden administration, which the White House said will save "$109 billion in total" for American families.
FOX Business' Emma Colton contributed to this report.