EV Sales Are Just Getting Started

Over the past few months, multiple media outlets have suggested U.S. sales of electric vehicles are losing steam, or have stalled out, or look grim for 2024, or that makers, dealers, and buyers are dawdling. Even Hertz, which was going all in on EVs two years ago, is now reducing its EV fleet. What's going on? Some point to carmakers delaying or reducing previous EV investments; others suggest the U.S. (and other nations won't hit their goals for EV sales percentages in 2030 or 2035. A few even question whether the EV transition will happen at all.

There's just one little problem: Last year, U.S. sales of EVs were the highest ever, both in sheer numbers and as a percentage of the overall new-car market. Global sales: ditto. The EV Sales Tracker from EVadoption estimates nearly 1.2 million battery-electric vehicles and another 190,000 plug-in hybrids were sold in 2023, totaling 1.36 million vehicles. That's 8.8 percent of the total of 15.5 million, per Wards Intelligence—and it represents EVs' highest-ever share of new-car sales.

Moreover, 2024 is expected to set another new record for volume of EVs sold and their share of the total market. Colin McKerracher of Bloomberg projects 2024 EV sales in the U.S. at just under 1.9 million units, making up 13 percent of new-car purchases. This year should see fewer of the supply constraints that hobbled availability over the last four years. Depending on a host of factors, some analysts suggest overall vehicle sales could be 1 million vehicles or more higher than last year.

Note 2023 sales of battery-electric cars, at roughly 8 percent, equaled those of conventional hybrid models, also at about 8 percent. As before, half of those EV sales come from Tesla—which has sold roughly half the 2.5 million EVs that have entered U.S. roads since 2011.

Ups and Downs in Growth Rate

So what is actually going on in the EV market lately? First, growth in EV sales slowed in the second half of the year against the first half. That likely stemmed from a variety of causes, including higher consumer interest rates, a dearth of inexpensive EVs, shortages of some popular models, and publicity about the unreliability of some public EV charging stations. It was always clear the growth of EVs would have ups and downs. But, note, a decline in the rate of sales growth is not a decline in actual sales.

Second, some makers—most notably GM and Ford—delayed investments to add future EV battery or assembly capacity. They gave various reasons, but pushing out a factory startup date by a year isn't canceling it altogether. In an era of much pricier loan rates, corporations too must conserve cash where possible.

Third, a few significant new vehicles are now landing at dealerships, among them the 2024 Kia EV9 three-row mid-size family SUV. Dimensionally about the same size as the Kia Telluride, its longer wheelbase gives more interior room and offers a usable third row—at a starting price well below those of other three-row EV SUVs on sale already, including the Mercedes-Benz EQS SUV, Rivian R1S, and Tesla Model X. A Hyundai Ioniq 7 sibling will follow toward the end of this year; both will be built at a new EV-only plant in Georgia that should open before the end of 2024.

GM’s Embarrassingly Absent Ultiums

Fourth, a group of significant vehicles hasn't shown up at dealers. Those are the ones that were to have been on sale by now using the next-generation Ultium architecture touted by General Motors since early 2020. GM finds itself in a precarious position right now vis-à-vis EVs: less than a year ago, it said it expected to sell 400,000 EVs by mid-2024. But its actual 2023 sales of Ultium EVs were 13,838. (It has now backed away from the 400,000 number.) While it delivered almost 76,000 electric cars last year, fully 82 percent were the Chevrolet Bolt EV and EUV—which it took out of production late last year.

The lengthy delays for Ultium models appear to stem from automated machinery to insert (or "stuff") individual cells into the modules that go inside a battery pack. GM has been silent about the specific problem and declined to give details to Car and Driver. Meanwhile, the list of vehicles selling at minimal rates or simply not available has grown to include the Chevrolet Silverado EV, the Blazer EV, and the (now delayed) Equinox EV; the Cadillac Lyriq; and the GMC Hummer EV.

But Hyundai-Kia and the Chinese certainly aren't waiting. Weren't the Detroit makers the ones that knew how to build cars, unlike startups? Watch closely for when actual Ultium vehicles arrive in volume at dealerships.

Finally, those who follow the EV market await the arrival of inexpensive EVs from Chinese companies. The first of these was the Polestar 2; this summer we'll see the Volvo EX30, a subcompact SUV that will start at less than $40,000. (Yes, Volvo has been Chinese-owned since 2009.) Given the 27.5 percent tariff on China-built cars imported into the U.S., expect Chinese makers like BYD to launch here with cars exported from places like Mexico or Brazil—where those import duties don't apply.

2024: Tough to Call

It's unclear how EV sales will stack up this year, though it is very unlikely they will fall from last year's levels. Bloomberg's McKerracher says U.S. EV sales this year are "the toughest to call" among all global markets, though. He notes Tesla remains dominant, Hyundai and Kia "aren't slowing down," and only the domestics—Ford and GM—have claimed demand for EVs is "faltering."

Incentives changed again on January 1: While fewer vehicles qualify for a purchase rebate, due to increasingly stringent requirements on battery metals and assembly, those that do qualify can now get the incentive when they buy the car rather than when they file their taxes months later. As always, leasing any EV qualifies it for the full rebate, under a different piece of the tax code.

U.S. Is Not the Center of EV Sales

For greater context, be aware the U.S. isn't where the bulk of global EV sales or innovation happens. That would be China, which will likely account for 10 million EV sales this year, more than half the global total. Almost four out of every 10 new vehicles sold in China will be an EV this year, giving its makers the experience and higher volumes to keep cutting costs. Those numbers stem from 10 years of effort and hundreds of billions of dollars of strategic investment by national, state, and local Chinese governments.

The goal was to ensure the country dominates EV metals, battery assembly, and EV production worldwide—and that's exactly what it does. Only Tesla can compete with the volume of Chinese makers. Despite lavish promises and tens of billions of investment made or planned, Detroit's automakers aren't anywhere close to that scale. Nor are European makers or most Asian companies.

Meanwhile, the U.S. represents only 11 percent of global EV sales. Its market has unique features that make it challenging for EVs, including buyers' strong appetite for full-size pickup trucks and SUVs that are simply too large to be sold anywhere else.

Nevertheless, more new vehicles with plugs are on sale in the U.S. this year than ever before. They'll sell better this year than they did last year. In other words: Don't believe everything you read, check the data, notice which EVs are showing up on your local roads—and, as always, do your own research online and at dealers.

John Voelcker edited Green Car Reports for nine years, publishing more than 12,000 articles on hybrids, electric cars, and other low- and zero-emission vehicles and the energy ecosystem around them. He now covers advanced auto technologies and energy policy as a reporter and analyst. His work has appeared in print, online, and radio outlets that include Wired, Popular Science, Tech Review, IEEE Spectrum, and NPR's "All Things Considered." He splits his time between the Catskill Mountains and New York City and still has hopes of one day becoming an international man of mystery.

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