Electric vehicle adoption remains behind schedule despite the efforts of dealers, automakers, and government officials to spur demand. Where did all the excitement toward electrification go, and how will the automotive industry overcome the hurdles it faces?
On this episode of Inside Automotive, host Jim Fitzpatrick is joined by Joe McCabe, president and CEO of AutoForecast Solutions. For years, McCabe has helped the retail automotive sector navigate the economic landscape with accurate predictions and critical insights, allowing dealers to stay up to date on the trends impacting their business. Now, he takes a look back at the 2023 electric vehicle market and shares his expectations for 2024.
Key Takeaways
1. One of the standout trends McCabe observed throughout 2023 was the stagnation of electric vehicle demand. Although legacy automakers initially believed electrification could be achieved rapidly, McCabe notes that most consumers interested in owning an EV had already purchased from Tesla, limiting the number of prospective buyers.
2. McCabe notes that automakers will need to address four consumer pain points to overcome electric vehicle hesitation: low affordability, limited driving ranges, inadequate infrastructure, and missing supply chains for raw materials.
3. McCabe believes lawmakers will dial back their electric vehicle policies to give the automotive industry more time to transition. He also urges the government to work more closely with car manufacturers to address infrastructure, noting that the issue will require significant collaboration and support.
4. In 2024, McCabe expects to see more normalization across the automotive industry. This will require dealers to balance their ICE and electric vehicle inventories and pursue strategies that keep revenue streams intact without disadvantaging customers.
5. Despite the attractiveness of leasing for buyers, McCabe notes that electric vehicle adoption may make it more difficult for dealers to offer leasing on ICE vehicles. Vehicles leased today with two-to-three-year terms may no longer be in demand when they are returned to the dealership.
"This idea that BEVs are the ONLY solution never resonated with us. They are A solution." — Joe McCabe
