Why Electric Vehicle Sales Are Falling Short of Expectations

The anticipated explosion of electric vehicles (EVs) in the U.S. market has not lived up to the high expectations set by automakers, industry analysts, and environmental advocates. As of 2024, EVs account for just 11% of all new cars sold in the U.S.—around one in nine vehicles. While this number shows a gradual increase in EV adoption, it falls significantly short of the bold forecasts made over the past decade. Many experts predicted that by now, electric vehicles would dominate the automotive market, propelled by advancements in technology, government incentives, and a growing focus on sustainability. However, despite these efforts, EV sales have been slower than expected, creating a complex situation for dealerships heavily invested in selling electric vehicles.

One of the major barriers to EV adoption continues to be the lack of reliable charging infrastructure. While some progress has been made, especially in urban areas, the availability of public charging stations remains inconsistent. This is particularly problematic for suburban and rural drivers, many of whom are hesitant to switch to an EV due to fears of running out of battery power without access to a charging station. Known as “range anxiety,” this concern persists even though most new EVs offer a driving range of over 275 miles per charge. For many consumers, especially those who frequently travel long distances, the convenience of refueling a gas-powered car quickly at any gas station still far outweighs the appeal of an electric vehicle. Even with the rise of fast chargers, the time it takes to recharge an EV—up to 30 minutes or more—can feel like a burden for drivers used to the five-minute refueling time of traditional internal combustion engine ( ICE) vehicles.

In addition to infrastructure issues, the high cost of EVs is a significant factor hindering adoption. Although prices have been coming down over the years, electric vehicles remain more expensive upfront than their internal combustion engine counterparts. Even with federal and state tax incentives, which aim to offset the cost of purchasing an EV, many buyers are put off by the higher price tags. The average price of a new electric vehicle is still considerably higher than that of a traditional gasoline-powered car, which makes EVs out of reach for a large portion of the car-buying public. While EV proponents argue that the long-term savings on fuel and maintenance can make up for the initial expense, many consumers are hesitant to make the leap, particularly in an uncertain economic climate with rising interest rates on auto loans. For EV dealerships, this presents a growing challenge as more consumers shy away from these higher-priced vehicles, leading to slower sales and stagnant inventory turnover.

Moreover, EV dealerships are finding that consumer lifestyles and habits also play a role in the sluggish adoption of electric vehicles. While urban dwellers with easy access to public transportation and home charging stations might be more inclined to make the switch to an EV, those living in suburban or rural areas, where charging infrastructure is limited, are far less likely to see the benefits. Similarly, individuals who take frequent road trips or live in colder climates, where battery performance can suffer, are more hesitant to embrace electric vehicles. The reality is that for many consumers, traditional gas-powered vehicles are still seen as more practical, reliable, and affordable. These perceptions present an uphill battle for EV dealers trying to convince buyers to invest in the future of electric transportation.

Despite the obstacles, technological advancements in battery efficiency and charging infrastructure continue to be made, but the pace of improvement is slower than many expected. This slow progress has left EV dealerships in a difficult position, especially those who overestimated the speed of the market’s shift to electric vehicles. Many of these dealerships are finding it harder to move their EV inventory, with consumers either holding out for future advancements or choosing to stick with the familiarity of ICE vehicles. For dealers who have invested heavily in marketing electric vehicles or retooling their businesses to cater to EV buyers, this lag in sales represents a serious financial challenge. They are often forced to offer deep discounts or incentives just to make sales, which can eat into already narrow profit margins.

For now, the EV market’s slower-than-anticipated growth is creating both challenges and opportunities. While EV dealerships may struggle with slower sales and tighter profit margins, used car dealerships can continue to thrive by catering to the ongoing demand for traditional ICE vehicles and the emerging interest in more affordable used EVs. As the electric vehicle landscape continues to evolve, dealerships that can adapt to both the present and the future will be best positioned for long-term success. While the road to full EV adoption may be longer and more winding than expected, used car dealerships have the advantage of flexibility, allowing them to navigate the changing market more effectively than those solely focused on electric vehicles.