Granholm: Slumping EV Demand Partially Due to Higher Prices, ‘Confusing’ Tax Incentives

On Friday’s broadcast of CNBC’s “Squawk Box,” Energy Secretary Jennifer Granholm stated that part of the reason for the slowdown in electric vehicle demand is due to the fact that they’re more expensive than gas cars and there’s “a confusing tax incentive market.”

Co-host Andrew Ross Sorkin asked, “[T]here’s been a big push, obviously, from government, and, frankly, I think we thought from the marketplace, for EVs and what that would ultimately do to the interests of oil and what not. However, there is clearly a slowdown taking place, and we’re seeing it, by the way, Tesla stock is down, even as a result of — that’s probably been the most successful — I think we can all agree — EV maker in the world, and yet, it’s getting harder even for them. And so, the question is, what is that about? Is that an infrastructure problem? Is that a market problem? Are the products that the other automakers are making not good enough? And if that’s the case, what do you have to do?”

Granholm answered, “I think it’s several things. One is the price of EVs has been higher. Now, Kelley Blue Book has just assessed that, last year alone, the price of EVs dropped 23%, so they’re now relatively on par with new internal combustion engines. So, that price issue is continuing to move in the direction of the consumer. It’s not quite there yet. The tax incentives and the state tax incentives combined make that even more irresistible. But it’s a confusing tax incentive market. The dealers have to take on a lot of educating of folks to be able to apply those tax incentives at the dealership. People aren’t aware that, if you lease a vehicle, the more restrictive tax incentives don’t apply, and so, you can really take advantage of that. And, of course, it’s an infrastructure issue, people do have range anxiety. It’s why we have been so focused on increasing the number of charging stations across the country. We expect that we’ll get to 500,000 charging stations across the country by 2026.”

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