Ford’s F-150 Lightning: A Case Study in Electric Vehicle Adoption
For over 40 years, Ford’s F-150 and its pickup truck family have dominated as America’s best-selling vehicles. The release of the electric F-150 Lightning in 2022 was expected to mark a significant shift for electric cars in the U.S. However, its higher price tag poses a challenge. The base model of the F-150 Lightning is about $26,000 more expensive than the cheapest gas-powered version. Last year, out of more than 750,000 F-Series trucks sold, only just over 24,000 were electric.
High Costs Hamper Electric Vehicle Adoption
Price remains a significant barrier to electric vehicle (EV) adoption in the U.S., impacting national climate goals. The average cost of a new EV is approximately $55,000, positioning them as luxury items. A recent poll indicated that more Americans are deterred by the cost of EVs than by range concerns or a preference for gas vehicles. EVs accounted for only about 8 percent of new car sales in the U.S. last year, compared to over a quarter in China, where new EVs can cost as little as $10,000.
Affordable Used Electric Vehicles
Despite high costs for new models, used EVs in the U.S. have become more affordable. In May, the average price of a secondhand EV was $32,000, down from $56,000 almost two years earlier, according to Ivan Drury of Edmunds. Some estimates from the EV-monitoring start-up Recurrent place the average used EV price at less than $24,000—a significant drop that brings these vehicles within reach for more consumers. Federal tax credits of up to $4,000 further reduce costs.
Market Dynamics and Price Drops
Initially, there were few used EVs available. However, as more drivers trade in or sell older models, prices have dropped. The fall in used-EV prices since last year coincides with automakers ramping up production in 2022, only to see sales plateau. This overconfidence led to decreased new car sales and subsequent price cuts to remain competitive with Tesla, which reduced prices of various models by 17 to 35 percent since 2022. Companies like Hertz are also off-loading thousands of EVs due to high repair costs.
The average used Tesla lost 30 percent of its value in 2023. Hertz is selling dozens of 2023 Teslas for less than $22,000, prompting more buyers to consider EVs.
Economic and Environmental Implications
The drop in secondhand EV prices could boost their adoption. Used-car sales more than double new purchases and leases annually. Secondhand buyers often have different needs than new car buyers, including a reliance on public chargers and a need for affordability. The gradual increase in used EV popularity could play a crucial role in the electrification of America’s roads.
While new and used EVs alike are crucial for reducing emissions, the current trend suggests that used EVs may be an accessible entry point for many Americans. Limited supply and increasing demand could eventually stabilize prices, but current market conditions make it a compelling time to consider a used electric vehicle.
Original Story at www.theatlantic.com