In a recent conversation with a car dealer in the Dallas area, I was asked who will afford all the electric vehicles that are coming to market in the next several years. Despite all the hype for EVs, the dealer told me, many of his customers live paycheck to paycheck and bargain for every dollar of their monthly car payment. A $60,000 Tesla isn’t happening.
He brings up a great point. The electric vehicles on the market are well beyond the means of most consumers and get more expensive all the time. Tesla and Rivian both hiked their prices this month. The cheapest Tesla, a Model 3, now costs $47,000 to start. Ford’s Mach-E has a similar base price if you include the delivery charge and taxes. Cadillac’s Lyriq will start at around $60,000 when it goes into production next week.
Who can afford these cars? It’s a critical question as automakers rush them to market in search of growth. It’s also vital for policymakers to understand the economics of the car market as they weigh expanding EV incentives and spending cash for a network of chargers.
