By Heejin Kim, Ari Natter, Keith Naughton and Coco Liu

When new rules tied to the US Inflation Reduction Act took effect on Jan. 1, the number of electric cars eligible for a consumer tax credit of up to $7,500 fell sharply — from two-dozen cars to just 13.

Among the still-eligible vehicles are Tesla’s Model Y, Rivian’s R1T pickup and Ford’s F-150 Lightning. Cars that don’t qualify, meanwhile, now include the Tesla Cybertruck and some versions of the Model 3, as well as the Nissan Leaf and GMs’s electric Blazer and Silverado.

The Treasury Department provisions, which exclude cars made outside North America and those with battery components from Chinese manufacturers, also ruled out a suite of electric models from Hyundai. So Hyundai decided to offer the money itself.

Through Jan. 31, the Korean carmaker is giving as much as $7,500 in cash bonuses to US buyers of its Ioniq 5, Ioniq 6 and Kona Electric cars, an initiative geared at staying competitive with vehicles that qualify for IRA rebates. Lacking any operational EV plant in the US, Hyundai is building one in Georgia that could start assembly later this year. The company and its Kia affiliate sold 69,259 battery-powered vehicles in the US in 2023, the most of any carmaker other than Tesla.

Hyundai’s cash bonus is the latest signal of how important affordability is to EV adoption in the US. A year ago, the all-electric future seemed just around the corner for automakers. But today’s car buyers are having second thoughts. Sales of electric cars are forecast to climb just 11% in the US this year, after increasing 47% in 2023 and 60% in 2022. Globally, EV sales are expected to rise 19% in 2024.

Carmakers, who are pouring more than $100 billion into developing electric models this decade, are now slashing prices, production, and profit forecasts. On Friday, Ford credited sluggish demand for its decision to reduce the number of workers making the F-150 Lightning. And over the past year, EV inventory on US dealer lots has more than doubled, reaching a record high of a 114-day supply at the beginning of December. Traditional gas-powered vehicles, meanwhile, continue to do big business, representing more than 8 in 10 auto sales in the country.

Affordability isn’t the only hurdle: Would-be EV buyers are also nervous about the state of the US charging network.

When Debbie Mettenleiter’s old Hyundai needed replacing after racking up 200,000 miles, she was keen to jump on the electric bandwagon. Teslas seemed to be at every stoplight in San Diego, where Mettenleiter lives. Her daughter already had one. So she put down a $250 deposit on a Model Y.

Then Mettenleiter started talking to her EV-driving friends about the difficulty they had accessing reliable charging stations. She eventually pulled the plug on her Tesla reservation and instead bought a 2022 Hyundai Kona SUV with a traditional internal combustion engine. “I wanted a vehicle I could just hop in and go on a road trip and not have to worry about charging,” Mettenleiter says. “I’m just not ready to make the leap with the charging issues what they are.”

US charging concerns came to the fore this week, as a cold snap drained EV battery range (a known limitation) and spurred long lines and malfunctions at charging stations in cities including Chicago. When temperatures drop precipitously, “the capacity of the battery — both in terms of getting charged as well as retaining charge — is depleted,” says Sumit Chauhan, co-founder of auto intelligence firm CerebrumX.

All of these tensions help explain why more than half of American car buyers now say they’re not interested in EVs, up from just 42% in 2022, according to a survey of a quarter-million US car buyers by automotive research firm Strategic Vision.

“In the most recent months, there’s been a strong pushback with more people saying they absolutely, positively have no interest in buying an EV,” says Alexander Edwards, president of Strategic Vision. “Very few people want to spend $55,000 so they can worry.”