WARREN, Mich. — In their first electric vehicle launches, US automakers targeted people who value short-range economy cars. Then came electric vehicles for luxury buyers and pickup and delivery van drivers.
Now the companies are targeting the heart of the US auto market: the compact SUV. In their quest for electric vehicles to dominate vehicle sales in the coming years, automakers are marketing their new models with the range, price and features to compete with their gasoline-powered competitors.
Some so far are proving quite popular. Ford’s $45,000+ Mustang Mach E is sold out for the model year. On Monday night, General Motors’ Chevrolet brand unveiled an electric version of its Blazer, which also costs around $45,000, when it goes on sale next summer.
Also coming next year: an electric Chevy Equinox, with a base price of around $30,000, the price of which could give it particular appeal to modest-income households. There’s also the Hyundai Ioniq 5 and Volkswagen ID.4 in the $40,000 range and Nissan’s upcoming Ariya around $47,000 with a lower-priced version coming soon.
They all start considerably less expensive than Tesla’s Model Y small SUV, the current best-selling EV, with a starting price of more than $60,000.
The new models, which can go about 300 miles on an electric charge, are aimed at the largest segment of the US market: modest-sized SUVs, which account for about 20% of new vehicle sales. Industry insiders say entering the smaller SUV segment, with its reach across a broader demographic of buyers, is sure to boost EV sales nationally.
“Going into the smaller utility segment gives you the opportunity to access the majority of customers in a (market) segment,” said Stephanie Brinley, principal analyst at S&P Global Mobility. “To make a transition from (internal combustion engines) to electric, you have to be in more space. You have to be at more price points. You have to be in more sizes”.
Brinley pointed out that the small and midsize SUV segments meet the needs of many people, something that previous electric vehicles did not.
“If it’s a price you can afford but it’s a product you can’t put your kids and dog on, you’re not going to buy it,” he said.
Chevrolet says the Blazer will get a minimum of 247 miles (398 kilometers) per charge. The most expensive high-end versions could go up to 320 miles (515 kilometers). The Blazer will be available with Chevrolet’s SS Performance Package with a zero-to-60 mph time of under four seconds. There will also be a police version.
“Initially, the demographic of an electric vehicle buyer was definitely someone who had maybe a higher education, higher family income,” said Steve Majoros, chief marketing officer for Chevrolet. “That’s very indicative of early adopters. But as we go further down that curve, the intent and pricing of this product is definitely to make it more available to mainstream buyers.”
To attract buyers of modest means, electric vehicles need to be priced even lower, in the $30,000 to $35,000 range, GM CEO Mary Barra said in an interview this week with The Associated Press. Electric vehicles, she said, also have to have the range and the charging network so they can be the only vehicle some people own.
“Most EV owners today own multiple vehicles, so they have an internal combustion vehicle to jump into based on their needs,” Barra said.
Automakers have been pushing to fully restore a $7,500 tax credit for people who buy electric vehicles to boost sales. But the measure is stalled in Congress. It’s especially important for GM, Tesla and Toyota, which have maxed out the number of credits allowed and can no longer offer them to buyers. Other automakers are also nearing the limit.
The money for the credits, as well as funding for additional electric vehicle charging stations, was in President Joe Biden’s $1.8 trillion “Build Back Better” environmental and social bill, which is all but dead due to objections. from Senator Joe Manchin, a member from West Virginia. Democrat.
Last week, Manchin also rejected a simplified version that included provisions to combat climate change. He indicated his support for just two elements of Biden’s broader agenda: lowering prescription drug costs and beefing up subsidies for families to buy health insurance. It would take his vote in an evenly divided Senate for anything to pass.
Even without the tax credit, the industry’s march toward electric vehicles is proceeding apace. edmunds.com says electric vehicles now account for about 5% of new vehicle sales in the US with 46 models on sale. S&P’s Brinley forecasts the market share to rise to 8% next year, 15% by 2025 and 37% by 2030.
“It looks like the number of options is growing exponentially for electric vehicles as we go forward,” said Erich Merkle, Ford’s chief US sales analyst.
Demand for battery-powered and hybrid gas-electric vehicles has grown as gas prices soared this year. Dealerships report that all delivered vehicles are usually already sold or gone shortly after arrival.
Jonathan Chariff, CEO of South Motors, a group of 11 dealers in South Florida, said it’s impossible to assess how big the demand for electric vehicles is. There is a lot of interest, especially in electric SUVs, and the vehicles are selling fast. But supply is limited because automakers don’t have enough computer chips to build as many vehicles as they want.
Given the huge consumer interest in electric vehicles, Chariff said he hopes the vehicles will continue to sell even if their prices don’t drop.
“The real question,” he said, “is if and when the supply chain can meet market demand, what is the real price?”