Potential car buyers feeling the squeeze of the recession and the COVID-19 pandemic are likely to choose a gas vehicle over a more expensive EV, several industry watchers believe.

The bright spots might be the newest crop of electric vehicles like the Ford Mustang Mach-E and Volkswagen ID.3 and several other upcoming models.

Tesla, while not 100 percent immune, could weather the downturn better than others.

Automotive sales are down for every type of vehicle right now. A combination of the coronavirus pandemic and the recession brought along with shelter-in-place orders has battered nearly every corner of the economy. A vehicle purchase is not in the cards for many right now, and for the people who actually need a car, even if they were looking at an EV before, the economic uncertainty of not knowing what's going to happen next could slow their enthusiasm for the adoption of electric drivetrains.

EV sales, like all automotive sales, have taken a beating during the pandemic in the U.S., and in other parts of the world, they've already taken a larger hit than gas vehicles. Energy research firm Wood Mackenzie predicts that global EV sales will fall by about 43 percent in 2020. Principal analyst Ram Chandrasekaran notes that in China, where the coronavirus hit first, sales of internal-combustion-engine vehicles were down 25 percent in January and 75 percent in February. Meanwhile, during the same months, EV sales were down 50 percent and 90 percent.



Prospective buyers see unpredictability on the horizon, so it's reasonable to speculate that betting on new technology for their transportation might seem like a bad idea to many. Chandrasekaran raises points potential buyers could be mulling. "You've heard all these great things about it. But you still don't know for sure. You don't know what charging infrastructure is going to be like. Can you sit there for 30 minutes while the pandemic is happening?"



"In a downturn, people tend to buy less expensive vehicles," Mike Ramsey, vice president and analyst for global research firm Gartner, told Car and Driver. Electric vehicles are more expensive than their combustion-engine counterparts and in some cases don't really offer anything different, Ramsey points out. "In general, outside of Tesla, I'd say they are still mostly a compromised product," by which he means the range issue and a still evolving fast-charging infrastructure apart from California.

Ford's upcoming Mustang Mach-E electric crossover. Michael Simari Car and Driver

Yet a new crop of EVs on the horizon might help somewhat, according to the Center of Automotive Research's director of technology, Brett Smith. The Ford Mustang Mach-E and Volkswagen ID.3 give him a glimmer of hope. "They are in some ways the first non-Tesla aspirational EVs out there. I think that may help," Smith said. Like Ramsey, he sees a lot of the current crop of EVs (not counting Tesla) struggling to sell unless they come with some additional incentives.



Tesla is an exception, a company that, by most accounts, is thriving today. Smith points out that Tesla has a single powertrain while traditional automakers have to simultaneously deliver both gasoline- and electric-powered vehicles. "They're focused entirely on electric vehicles, that's all they do," Smith said.

And, in fact, the Wall Street Journal reported that Tesla recently got a boost from Credit Suisse based on the belief that the EV maker will likely weather the current situation better than others. "They've been pretty successful at not having to play by the rules of most other companies, and that'll be true here again," Karl Brauer, executive publisher of Kelly Blue Book, told Car and Driver.



2020 Hyundai Kona Hyundai 2020 Hyundai Kona Electric Hyundai

But in general, for the EV market in the United States, a dip in adoption is very likely. Unlike in China or Norway, there's no penalty here for buying a gasoline-powered car. Even with U.S. federal and state incentives, an electric version of a car is still going to cost more than the internal-combustion version. The Hyundai Kona starts at $21,420. The Kona Electric is $38,310. That’s a nearly $17,000 difference that's a huge hit to the pocketbook when you’re not sure what the world will be like in six months.



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