The Fastest Growing Segement In the Car Market May Shock You Despite inflation—or maybe because of it—electric vehicles have had a 66% increase in sales from last year.
By Jonathan Small •
Opinions expressed by Entrepreneur contributors are their own.
Rich people aren't the only ones buying electric vehicles anymore.
Despite rising prices and long waits for delivery, EVs have become the fastest-growing segment in the auto market.
Sales were up 66.4% to 196,788 units in the second quarter of 2022 compared to the same time last year—a record high, according to Cox Automotive.
"Today's EVs have moved beyond the luxury segment with more offerings from established legacy brands – and lower price tag," Cox announced in a white paper. "EVs and those who want to buy them are on the path to becoming mainstream."
Related: Taco Bell Is Now Offering an EV Charge With That Chalupa
Why EVs are more popular
Concerns about the climate certainly play a role in motiving people to go electric. But the cost is also a major factor.
In a New York Times survey, 3,000 respondents reported that they drive battery-powered cars because they're much cheaper than cars that use gas. They also said they were utilizing the energy they generated from solar panels to charge their vehicles, lowering the expense even further.
"I don't have the disposable income to throw $50,000 or $60,000 at a car just to help the environment," Russell Grooms, a librarian from Virginia, told the Times. "It really came down to numbers."
New low-cost electric models, like the Nissan Leaf and Chevy Bolt, retail for under $30,000, appealing to budget shoppers.
Still a way to go
But while electric cars are more mainstream than ever, they still have a few laps to go before they pass gasoline-powered cars.
For one, there are not enough of them on the market. Production has been limited thanks to shortages in parts, including computer chips and minerals such as lithium.
Second, there are not enough inexpensive options. According to Kelley Blue Book, the average price for a new EV is declining, but the average cost for a new one is still more than $64,000. That's well above the auto industry average of $47,148.
Then, there's the overall lack of charging stations across the country. In states like California, there are 34,185 ports available for charging, but in Wyoming, there are only 707, according to EVadoption.
This leads consumers to have what has been called "range anxiety," or the fear that they could be stuck in the middle of nowhere with a dead battery.
"Range anxiety is real," Caroline Gambell, a Vermont resident, told the New York Times. "If you are trying to get stuff done, and you have kids in the back, the last thing you need is, 'Is my car going to get there?'"
