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Author: Robert Walton   Published: 6/24/2024     Utility Dive

A worker inspects a 2023 Acura Integra as comes off of the assembly line at Honda's Marysville Auto Plant.

A worker inspects a 2023 Acura Integra as it comes off of the assembly line at Honda’s Marysville Auto Plant in Ohio. Analysts at BofA Global Research say only 3% of EVs in the U.S. are priced at less than $37,000, compared with more than half of gas-powered or hybrid vehicles.

The high cost to purchase an electric vehicle is slowing EVs’ uptake among U.S. consumers, setting back the anticipated adoption curve by a year or more, according to analysts at Bank of America.

“EV demand growth has slowed sharply in 2024, likely due in part to affordability,” according to a BofA Global Research report published Monday. Only 3% of EVs in the U.S. are priced at less than $37,000, according to the research, compared with more than half of gas-powered or hybrid vehicles.

BofA’s analysis is based on the assumption that most U.S. consumers will buy an EV if the price is competitive with an internal combustion engine vehicle. However, manufacturers “are unlikely to achieve ICE-comparable costs on EVs until 2028+,” analysts said. “This means OEMs have little incentive to ramp EV production, despite what might be higher levels of demand at lower prices. … As such, we expect EV penetration to inch higher from 2024 to 2027, but after 2027 it could start to accelerate.”

Despite a potential slowdown, U.S. utilities are expecting the shift to electric transportation to drive significant load growth, as will the electrification of building systems, including heating and cooling; hydrogen production; the growth of data centers and other sources. Reports filed last year with the Federal Energy Regulatory Commission show grid planners expect nationwide electricity demand to grow 4.7 % over the next five years, while 2022 estimates called for just 2.6% growth.

In New England, transportation is expected to be the single largest contributor to electricity demand growth in the coming years, according to a May report from the region’s grid operator. EVs make up only about 2% of all vehicles in New England but by 2033 are expected to constitute 26% of the region’s personal vehicles.

Annual power consumption from EVs in New England is expected to grow from 325 GWh this year to more than 15,000 GWh by 2033, according to the “2023–2032 Forecast Report of Capacity, Energy, Loads, and Transmission” from ISO New England.