Automotive executives of Electric Vehicles (EVs) have predicted a decline in sales over concerns about inflation, and high-interest rates, among several other factors.
This recent prediction by executives is the opposite of what they had earlier proposed a year ago, in which they disclosed that more than half of U.S car sales will be EVs by 2030.
With the recent inflation and high-interest rates, reports disclose that automotive executives are less confident about the surge in sales of EVs in the U.S and globally.
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In a recent survey conducted by accounting firm KPMG, the estimation of new Electric vehicles being sold stood at 10% to 40% in this year’s survey, a decline from 20% to 70% a year ago.
In the U.S, the median expectation for EV sales was 35% of the new vehicle market, down from 65% a year ago.
KPMG’s global head of automotive Gary Silberg while commenting on the recent survey, disclosed that EV automakers are however optimistic of increased sales in the long term, however with the recent socio-economic challenges, they are not confident that there will be a surge in sales.
In his words,
“There’s still a sense of optimism long term, and yet, most importantly, there’s a sense of realism in the near term. You see this realism throughout the entire survey.
“You can be long-term optimistic, but near term, you’ve got to be very realistic. It’s not rainbows and butterflies and euphoria anymore, it’s game on.”
Asides from the inflation and high-interest rate, the proposed tax credits of up to $7,500 for electric vehicles in this unfriendly economy according to a few analysts could pose a serious challenge to the sales of EVs.
The EV tax credit is a federal incentive designed to encourage people to purchase EVs. Residents who meet the income requirements, and who buy a vehicle that satisfies the price, battery, and assembly restrictions, are eligible to receive up to $7,500 from the government in the form of a tax credit.
Although, some of these provisions, however well intended, may have unintended results, with some industry commentators concerned that no current vehicles will qualify for the revised EV tax credit due to its strict price limits and the made-in-America requirements that will go into effect in January 2023.