With the recent Chicago Auto Show, talk of electric cars has kicked into high gear. It’s hard to turn on a radio or television and not hear joyful coverage of our grand transition to electric.
But forgotten amid all the happy hype is the fact that electric vehicles are still a small percentage of the whole. Last year, they made up about 5.8% of new light-duty vehicles sold in the U.S. And — let’s be honest here — many of those who did buy electric vehicles were early adopters, enthusiasts and environmentalists. The rest have yet to make up their minds, and that’s in part because the price gap between electric and traditional vehicles is still too big.
Consider that in September, the average electric vehicle transaction price was $66,000, according to the consultant Guidehouse Insights. Then consider that the median American household income, according to the 2020 U.S. census, was $67,521 per year. That’s a cost equation that doesn’t bode well for the middle class.
In truth, it’s been that way since the beginning of the modern EV era. To understand why, it’s instructive to look at a bit of recent automotive history.
In 2003, electric cars were going nowhere. In an effort to better understand the market, a pair of automotive upstarts named Martin Eberhard and Marc Tarpenning drove up and down the streets of Palo Alto, Calif., peering into the driveways of wealthy car owners. Eberhard and Tarpenning, who later founded Tesla, noticed something strange in the driveways. Many had two cars, one of which often fell into the category of an environmental vehicle. They’d see a Lexus and a Prius. Or an Audi and a Prius. Or a Porsche and a Prius.