Electric vehicle sales jump in the US – 07/14/2023 – Market

Sales of electric vehicles in the United States are on the rise, reaching the 4 million milestone at the end of June, according to data and analysis by consultancy Atlas Public Policy.

Sales are being boosted by a range of factors, including price cuts for Tesla and Ford vehicles this year, tax credits of up to $7,500 for consumers and increased manufacturing capacity, experts say.

“There’s no question that the total electric car pie is growing,” commented Atlas founder Nick Nigro.

“More people than previously bought combustion engine vehicles are buying electric vehicles (EVs). Tesla sales are increasing, but so are sales for all manufacturers. This is a sign of a strong market.”

It took almost eight years for the first million electric cars, trucks and vans to be sold in the United States, a milestone that was reached in 2018. The 2 million milestone took another 32 months, and the third million, 15 months. The increasing pace took the total to 4 million in just ten months after that.

Tesla, General Motors and Rivian all announced strong EV sales in the US in the second quarter, as did BYD in China. Ford EV sales were down 2% in the second quarter from last year, but even so, in the first half of this year they were 12% higher than the same period in 2022.

Tesla makes up about 61% of the market, versus just over 4% for GM.

For now, electric cars and SUVs are still only being purchased by early adopters, and electric vehicles represent less than 10% of new vehicle sales. The impression that they are mainstream exists only in certain pockets of the US market, such as California, where in the first three months of this year almost a quarter of new vehicles sold were electric.

Some auto industry players want to slow the transition to electric vehicles. The Alliance for Automotive Innovation, a trade association comprising the country’s biggest automakers, said the tough emissions standards proposed for the country in April marked “an important move towards the country’s electrification targets”. The national union of auto workers, United Auto Workers, said on Thursday that EV adoption standards must be set at “feasible levels” and tightened “over a longer period”.

But increased sales mean more people are likely to know someone who owns an electric vehicle, said Jessica Caldwell, executive director of insights at Edmunds, “and with more electric vehicles on the road, people are going to be more comfortable with them.”

As with the automotive industry as a whole, sales of electric models have been rising because the supply chain crisis has eased; automakers are no longer having such a hard time getting the components needed to assemble cars and trucks.

New entrants to the industry, such as Rivian, are also ramping up production as they overcome the production issues that complicated their start-up phase. The California-based company produced nearly 14,000 trucks and pickup trucks in the second quarter, beating Wall Street’s forecast by nearly 3,000 units.

Tesla recently announced that it will open its Supercharger electric vehicle charging network to owners of cars and trucks produced by Ford, GN and Rivian. Concern about how far an electric vehicle can cover on an electric charge is an issue that has American drivers uneasy, given the limited availability of public fast-charging points. Tesla’s network of 12,000 Supercharger points represents about 60% of the fast-charging points available to EV drivers in the United States, according to analyst Emmanuel Rosner of Deutsche Bank.

Discounts offered by Tesla and Ford contributed to the increase in sales. Between April and June, Tesla delivered a record 466,000 cars, after slashing prices on all its models by as much as $13,000 in the US in January. That led to Ford offering its Mustang Mach-E for between $46,000 and $64,000. Tesla then slashed its prices again in March, dropping the starting price of the Model S by 5% to $90,000 and the cheapest Model X by 9% to around $100,000.

Tax breaks are also boosting electric vehicle sales, but it’s not clear by how much. The Reducing Inflation Act, President Joe Biden’s grand climate change and industrial policy law, offers consumers up to $7,500 in tax breaks. As Caldwell pointed out, “When there’s free money on the line, the consumer is always interested.”

But the list of vehicles that qualify for the full tax credit is based on whether the vehicle is produced in North America and the origin of the materials used in the battery. Of the 68 EV models currently on sale in the United States, only ten are eligible for full credit. Three of those models are from Tesla, after the law lifted the limit for receiving credit after an automaker sold more than 200,000 EVs, a milestone that Tesla surpassed five years ago.

The tax credits benefit demand for EVs, said Joe McCabe, chief executive of AutoForecast Solutions. “But frankly who are they helping? Tesla.”

Such is the case with Quinton Gaines of Clearwater, Florida. His family bought his Model Y last month after unsuccessfully trying to acquire a Ford Mustang Mach-E. Gaines said he wanted to buy an electric car because the family wanted a second car and he couldn’t justify the carbon emissions of a second gasoline-powered vehicle.

He ordered the Mach-E in November. No local dealers had EVs available, and Ford guaranteed a six-month delivery window, Gaines said. But when the SUV arrived in June, it malfunctioned during a test drive, losing power in a large crossover. A policeman arrived to help, Gaines said, and “the last thing he said to me was, ‘You might want to rethink your purchase of that vehicle.’

The Model Y was the only vehicle he found that he felt confident would run well, that was entitled to the full tax credit, and that could take “four people and a bunch of chairs down to the beach.”

McCabe pointed out that as the electronic vehicle market develops, automakers are competing for attention and customers. “Not everybody can win in the automotive space,” he said, and right now “what you see out there is the Wild West.”

Translated by Clara Allain