Comment: Cost still barrier for middle-class adoption of EVs

The slowing growth of electric vehicle adoption shows they’re still seen only as an option for the wealthy.

By Charles J. Murray / Chicago Tribune

Automakers are now learning an important lesson: Not all car buyers are wealthy environmentalists.

This should be obvious but apparently isn’t, which is why the auto industry is now wringing its hands over electric vehicle sales problems. General Motors, Ford, Mercedes, Nissan, Toyota and even Tesla have raised red flags about slowing growth in demand. GM scaled back plans for 2024 and said it would delay the opening of a new electric truck factory. Ford is considering cutting shifts at its F-150 Lightning plant. Nissan is transferring more resources to hybrids rather than EVs. Mercedes has described the EV market as ” brutal.” And Toyota’s chairman, Akio Toyoda, said last week that “people are finally seeing the reality” of EVs.

The problem, it seems, is that the so-called next wave of EV buyers isn’t cooperating. The EV is not trickling down. At least not for those prospective buyers.

But this should have been obvious. It certainly was for Martin Eberhard and Marc Tarpenning, founders of Tesla Motors. In a now well-known tale, Eberhard and Tarpenning in 2003 gathered consumer data for their nascent company by driving up and down the streets of the wealthy suburb of Palo Alto, Calif., and peering into driveways to see what kinds of cars the suburbanites owned. What they found tucked between the $2 million homes were Priuses. Many of the driveways contained one luxury car and one Prius, which was the environmental darling of the day. So they’d see a Porsche and a Prius. Or a BMW and a Prius. Or a Lexus and a Prius.

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

Economists have since identified this phenomenon. They call it “conspicuous conservation,” a wrinkle on Thorstein Veblen’s century-old theory of conspicuous consumption. The idea is that some modern consumers purchase products as a way of displaying their green virtue.

In 2003, Eberhard and Tarpenning couldn’t have known the term “conspicuous conservation,” but they had the wisdom to understand what they were seeing: Environmentalism had come to the doorstep of the wealthy. Thus, they concluded, they could sell electric cars to the affluent. And they believed the EV would eventually trickle down to the middle class.

In its early years, this was the real genius of Tesla. Selling to wealthy environmentalists and enthusiasts became a goal. And it kept the company afloat until its bizarre stock market performance later enriched it.

Eberhard and Tarpenning, however, seldom got due credit for their flash of genius. Up to that point, Detroit’s marketers had believed that electric cars should start at the bottom of the market and rise up. No sane consumer, they thought, would pay more for a vehicle that offered less. Therefore, a top-down economic model wouldn’t work.

Clearly, Detroit was wrong. Wealthy enthusiasts bought Teslas. And here we are now, and the time has come for the EV to trickle down; and it’s not happening. Working-class consumers just aren’t cooperating. It seems that they have their own ideas about what to do with their disposable income.

None of this is new, of course. Middle-class consumers have always had many reasons for buying cars. They need their vehicles to go to work, to Grandma’s, to college and to go on vacation. They need them for all these things, and yet they need them to be inexpensive.

What they don’t need is a costly second car. And, too often, EVs have become just that. An EV’s initial cost is still too high and its practicality too low, especially for the less affluent.

The auto industry is now running head-on into these realities. That’s not to say that it can’t overcome them. But middle-class adoption clearly isn’t happening at the pace automakers foresaw.

Tesla knew from the beginning that trickle-down would be necessary and would be a challenge. And now that promise is coming due.

Buyers of the next wave won’t purchase an EV so they can park it next to their Porsche.

Charles J. Murray is a Chicago-area author who writes about the history of technology. His most recent book is”Long Hard Road: The Lithium-Ion Battery and the Electric Car.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Opinion

toon
Editorial cartoons for Tuesday, June 10

A sketchy look at the news of the day.… Continue reading

Labor Secretary Lori Chavez-DeRemer testifies during a budget hearing before a House Appropriations subcommittee on Capitol Hill in Washington on Thursday, May 15, 2025. (Al Drago/The New York Times)
Editorial: Ending Job Corps a short-sighted move by White House

If it’s jobs the Trump administration hopes to bring back to the U.S., it will need workers to fill them.

Comment: Trump’s tariffs could ground aerospace’s rebound

Just as Boeing and Airbus had worked out most of their supply chain kinks, the threat of tariffs looms.

French: Trump, as he hoped, gets his excuse for conflict

It’s on the slightest of pretenses, but Trump is getting the showdown he desired in California.

Goldberg: Musk should be a warning to CEOs aligning with Trump

Even if they chafed under Democratic policy, now they’re left to a president’s unpredictable whims.

Comment: Heat is on for workers, but RFK Jr. sees no problem

Even as a summer of record heat approaches, protections for workers are lagging, if not being canceled.

Comment: Supreme Court gave DOGE the keys to kingdom

The court’s decision, without detailing its reasoning, is blow against the protection of data privacy.

toon
Editorial cartoons for Monday, June 9

A sketchy look at the news of the day.… Continue reading

A rendering of possible configuration for a new multi-purpose stadium in downtown Everett. (DLR Group)
Editorial: Latest ballpark figures drive hope for new stadium

A lower estimate for the project should help persuade city officials to move ahead with plans.

Comment: Trump’s science policy won’t set a ‘gold standard’

It’s more about centralizing control of science to make it easier to deny what it doesn’t agree with.

Comment: Can NASA’s popularity save it from deep budget cuts?

NASA logos are brand fixtures, a sign of public support. That could wane if cuts limit it’s reach into space.

Comment: Sen. Ernst’s sarcasm won’t help her keep her seat

Her blunt response regarding Medicaid cuts won’t play well in Iowa and won’t win back MAGA faithful.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.