How I’m Talking to Clients Interested in Buying Electric Vehicles

Higher gas prices increase interest and demand for electric vehicles (EVs) while lower gas prices do the opposite. The average price of a gallon of gas in the U.S. is currently $3.54 as of March 2024, a 30% decrease since its peak of $5.03 in June of 2022. The subsequent drop in demand caused the EV prices to fall, and the government has stepped in with tax credit incentives.

That has led to an increase in clients’ interest in buying electric vehicles. I’m telling my clients that it’s a good time to enter the EV market to take advantage of the tax credits.

With the IRS incentivizing the purchase of new electric vehicles by offering a tax credit up to $7,500 under Internal Revenue Services Code Section 30D, coupled with falling electric vehicles prices, client interest in making the switch from gas to electric has peaked. The available credit depends on things like the manufacturer’s suggested retail price (MSRP), assembly location, battery type, and a client’s adjusted gross income (AGI).

Additionally, with the rise of interest in Environmental, Social and Governance (ESG), electric vehicles fit the social impact strategy of some clients. In fact, Tesla, the largest manufacturer of electric vehicles in the world, has announced price cuts and other incentives days after reporting worse-than-expected Q1 2024 vehicle production and deliveries. 

However, the recent Israel-Iran conflicts in the Middle East could impact the supply of oil, which would raise the price of gas. When gas prices increase, the demand for electric vehicles also rises, meaning more competition for the cars that could lead to increased prices. That makes it a great time to take advantage of the market. 

What I’m Telling My Clients

Like most Americans, my clients report that price is one of the biggest barriers to purchasing an electric vehicle. For them, this is a great time to take advantage of the current tax credits and price cuts in the EV market. 

But they often have concerns about available infrastructure.  Some 50% of adults said in a recent survey by the Energy Policy Institute at the University of Chicago that not having enough charging stations available is a major reason they wouldn’t purchase an electric vehicle. The White House says things are changing. The number of publicly available charging ports has grown by over 70% since 2021, with 170,000 publicly available EV chargers across the country.

So for clients interested in buying an EV, the Clean Vehicle Tax Credits must be submitted and approved at the moment they make the purchase. Clients need to request a copy of the IRS’s confirmation in the “time-of-sale” report.

The Bottom Line

Transitioning from gas-powered vehicles to electric vehicles can be seen as an investment. Like any investment, timing the market perfectly is impossible, but the current conditions provide a great opportunity for clients to consider making the switch to EVs. The combination of falling EV prices, tax incentives, and the growing environmental consciousness among consumers aligns perfectly to make a move to electric vehicles. Also, the improving infrastructure efforts by the government and the potential for rising gas prices make the case to switch to EV.