Why Electric Vehicle Sales Are Falling Short of Expectations

Despite high expectations from automakers, industry analysts, and environmental advocates, the anticipated explosion of electric vehicles (EVs) in the U.S. market has fallen short of predictions. As of 2024, EVs represent just 11% of all new car sales—roughly one in every nine vehicles. Although this figure shows a gradual increase in EV adoption, it remains well below the bold forecasts of the past decade. Many experts envisioned a market dominated by electric vehicles, driven by technological breakthroughs, government incentives, and an increasing focus on sustainability. Yet, despite these efforts, EV sales have lagged, presenting a challenging scenario for dealerships heavily invested in selling electric vehicles.

One major barrier to broader EV adoption is the persistent lack of reliable charging infrastructure. While urban centers have made some strides, public charging stations remain inconsistent, especially in suburban and rural areas. This shortfall fuels "range anxiety," as potential buyers worry about running out of battery power without convenient access to charging, even though most new EVs offer a driving range of over 275 miles per charge. For consumers who frequently travel long distances, the convenience of refueling a gas-powered car in just a few minutes still outweighs the benefits of switching to an EV, where even fast charging can take 30 minutes or more.

In addition to infrastructure challenges, the high upfront cost of electric vehicles continues to hinder adoption. Although prices have been gradually coming down and federal and state incentives help mitigate the expense, EVs still carry a significantly higher price tag compared to their internal combustion engine counterparts. This cost disparity discourages many buyers, particularly in an uncertain economic climate marked by rising auto loan interest rates. As a result, EV-focused dealerships are increasingly compelled to offer deep discounts or other incentives just to move their inventory, further squeezing their profit margins.

Consumer lifestyles and regional differences further contribute to the slow pace of EV adoption. Urban residents with easy access to public transportation and home charging options are generally more receptive to electric vehicles, while those in suburban or rural areas—with limited charging infrastructure—tend to stick with traditional gas-powered cars. Moreover, individuals who frequently embark on long road trips or live in colder climates, where battery performance can diminish, remain skeptical about the practicality and reliability of EVs. These factors combine to make it an uphill battle for EV dealerships trying to convince buyers to invest in electric transportation.
Although advancements in battery efficiency and charging infrastructure continue, their progress has been slower than many expected. This gradual pace has left some EV dealerships with surplus inventory, as consumers either hold out for future improvements or choose the familiarity of internal combustion engine vehicles. For dealers who have heavily invested in marketing electric vehicles or retooled their operations to cater to EV buyers, the slower market shift poses a serious financial challenge. At the same time, this slower-than-anticipated growth in the EV sector presents both challenges and opportunities. While EV dealerships may struggle with sluggish sales and tighter margins, used car dealerships can continue to thrive by catering to the ongoing demand for traditional vehicles and the emerging interest in more affordable pre-owned EVs. As the electric vehicle landscape evolves, those dealerships that can adapt to both current realities and future trends will be best positioned for long-term success, even if the road to full EV adoption turns out to be longer and more winding than once expected.