Getting Americans to buy millions of Teslas and EVs is a tough sell, analyst says

Europeans have already adopted electric vehicles faster than American car buyers. And the Chinese government has an array of subsidies to encourage the purchase of electric vehicles.

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Will Americans buy millions of electric vehicles in the next few years?

This is the big question for the automotive industry. Datatrek Research founder and former automotive analyst Nicholas Colas addressed it in a Wednesday research note, and he’s not so sure the lofty EV targets will be met. The market disagrees.

“I recently spoke with a longtime friend who works in the automotive industry for a well-known global brand,” Colas wrote on Wednesday. The pair discussed electric vehicle sales around the world. “We agreed that the Europeans would probably be [buy EVs], and Chinese consumers will have no choice. The US market, however, is different.

Europeans have already adopted electric vehicles faster than American car buyers. And the Chinese government has an array of subsidies to encourage the purchase of electric vehicles. Incentives include monetary benefits such as purchase tax credits and non-monetary benefits such as easier vehicle registration.

Colas points out that Americans drive farther than European and Chinese drivers, which makes range anxiety a bigger issue.

Bigger batteries can help with range issues, but larger battery capacity also adds weight and cost to any electric vehicle.

Electric vehicle search activity has been on the rise on Google since oil prices soared after Russia invaded Ukraine. Colas called this good news. “On the other hand, electric vehicles are different enough from internal combustion engine vehicles that we just can’t be sure that demand will resemble the patterns set by the old technology,” Colas added.

Overall, Colas seems skeptical that electric vehicle sales will grow as aggressively as people expect. Some of the longer-term issues cited in his memo are cost — electric vehicles are more expensive than cars — and battery reliability.

There is no problem with the batteries per se. But the

You’re here

(ticker: TSLA) The Model S was first delivered in 2012. The oldest Model S, in theory, is 10 years old.

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the vehicles, of course, come with a battery warranty that covers eight years or up to 150,000 miles. And the batteries can be replaced, but the repair, if necessary, can cost up to $20,000.

Battery costs have dropped by around 80-90% over the past decade. Colas says costs will need to continue to fall and technology will need to improve to help electric vehicles replace gasoline-powered cars.

Colas’ skepticism is not reflected in the industry, however. Automakers believe electric vehicles are the future.

General Motors


Ford engine

(F) and Tesla together plan to sell around 8-10 million electric vehicles worldwide each year by around 2026. Maybe 40% of them would be sold in the United States. % by then, disregarding other EV offerings from start-ups such as

Rivian Automotive

(RIVN) or traditional car manufacturers such as



The stock market certainly seems to believe that electric vehicles are the future. Tesla is the world’s most valuable automaker, valued more than three times as much as number two:

Toyota engine


Tesla stock is down about 4% year-to-date. This is a little better than the comparable respective declines of 6% and 5% of the



Dow Jones Industrial Average,

but a little better than the 10% drop in the

Nasdaq composite index.

Write to Al Root at [email protected]

About Christopher Easley

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