2023 saw a slowdown in the sale of EVs in the US, making the Biden administration's 2030 goals for electric vehicle sales feel less than realistic. Multiple headwinds for this electrification push have mounted from EV model pricing and the lack of suitable charging infrastructure.

Deloitte Automotive Research Leader Ryan Robinson joins Yahoo Finance to give insight into electric vehicle adoption in the US and the progress of the market going forward amidst ongoing challenges.

"Overall, in our study, we asked consumers just what they're expecting to pay for their next vehicle. So just overall kind of transaction price and about eight out of ten consumers are telling us they're expecting to pay less than $50,000 for their next vehicle. When you bring it down to what consumers are actually concerned about and where the rubber meets the road for them is monthly payment," Robinson states. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino.

Video Transcript

RACHELLE AKUFFO: Well, 2023 saw a slowdown in the pace of EV sales, putting a speed bump in the Biden administration's goal of 50% of all new vehicle sales to be EVs by 2030. While high interest rates and elevated prices may be dimming consumer interest in fully electric vehicles, there are other challenges left to tackle as electrification push continues.

Here to discuss is Deloitte Automotive Research Lead Ryan Robinson. Ryan, thank you for joining us this morning. So as we look at this EV transition, we keep hearing about some of the demand slipping, but what's at the root cause of it? Is it just about inflation or what else is at play?

RYAN ROBINSON: Well, Hi Rochelle, thanks for having me. So we think that there's an elephant in the room here and that's vehicle affordability. And it's affecting the demand or the momentum towards electric vehicle sales in our latest 2024 global-consumer-- automotive-consumer study that's releasing today as a matter of fact, through our work at CES.

One of the questions that we ask and we've asked for many years is what type of engine consumers would most like in their next vehicle? And the study results suggest that there is a bit of a rebound in the number of consumers that are wanting what you might call a more traditional internal combustion engine.

So, last year, the percentage of consumers that were telling us that they want a nice vehicle was about 58%. Now it's about 67%, so there is a bit of that lift and we think that's got a lot to do as I said with affordability. When you consider where consumers or US consumers are at the moment, we've got about 43% of consumers that are telling us that they wouldn't be able to afford a major unexpected expense in the next three months.

You've got half of consumers telling us that they're concerned about the level of savings that they have. And concern about credit card debt in our studies has risen from about 23%, where we were this time last year, to about 30% on the last study-pulse, which was just a couple of weeks ago. So there definitely is an affordability issue out there. And we think it's a huge concern for the industry going forward.

RACHELLE AKUFFO: So, Ryan, how big is the gap between what people are willing to pay for an EV based on your survey versus what we're currently seeing by some of these EV makers out there?

RYAN ROBINSON: Yeah, so, overall in our study, we asked consumers just what they're expecting to pay for their next vehicle? So just overall kind of transaction price. And about 8 out of 10 consumers are telling us that they're expecting to pay less than $50,000 for their next vehicle.

When you bring it down to what consumers are actually concerned about and where the rubber meets the road for them is monthly payment. And, again, you could argue that the concern is at least as great or even the situation is greater when you factor in the impact of elevated interest rates right now. You've got 84% of consumers telling us that they're expecting to pay less than $600 a month.

And when you consider where average monthly payments are right now, a lot of people out there, a lot of people that are tabulating these numbers on a month-to-month basis are clocking in well over $700. So there is this kind of Grand Canyon chasm opening up between what consumers are expecting to pay and the reality of market conditions when they go to buy their next vehicle.