The sustainability of our environment is a continued concern for policymakers, economists, scientists and more. Electric vehicles emerged on the scene more than one hundred years ago with varying versions becoming popular throughout the decades. The 1990 Clean Air Act and the 1992 Energy Policy Act renewed the United State’s interest in the energy industry, sparking what many have referred to as our Green Revolution. In the 1990s, Japan’s Toyota Prius become the world’s first mass produced electric vehicle. Other major game changing companies, like Tesla, have emerged as a result of the electric vehicle market boom in the 1990s.
From 2022 to 2023, electric vehicle inventory increased 506% in the United States. According to an article by USA today, electric vehicles sales are slowing all over the country. This has forced major companies like Ford and GM to cut production as the demand for electric vehicles comes to a halt. Currently, an electric vehicle remains on the market for an average of 82 days versus an average 62 days for gas-powered vehicles. The price of the electric vehicles remains one the biggest barriers for potential buyers. Prices for electric vehicles are continuously falling in response to the slowing demand. However, the average price of an electric vehicle remains 28% higher than the average price of a gasoline vehicle.
Discussion Questions:
- Explain how the price of electric vehicles is impacting quantity demand for the product? Is this consistent with the law of demand?
- Will the reduction in electric vehicle’s price and sales impact the number of electric vehicles supplied? Explain.
Sources| USA Today: www.usatoday.com/story/money/personalfinance/2023/11/14/ev-sales-2023-slow-inventory-pile-up/71572499007/; Unsplash: Photo by Carles Rabada on Unsplash