US Electric Vehicle Sales Hit a Record as Incentives Disappear

EVs are no longer niche

Americans bought 438,500 electric cars and trucks in the third quarter, as drivers raced to grab federal incentives before they expired Sept. 30.

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Those transactions, the highest number in a single quarter, comprised 11% of all new car sales, eclipsing the previous high point of 8.7%, according to Cox Automotive, a services and technology company.

A crowd of more affordable cars next year could help maintain the momentum, but analysts expect EV transactions to dip in the months ahead without federal tax credits.

Stephanie Valdez Streaty, Cox Director of Industry Insights, said in a report EVs could account for one quarter of all new US car sales by 2030. That’s “well short of the 50% once envisioned, but certainly moving out of the ‘niche’ category.”

Source: Cox Automotive Inc.

The sales tally underscores a tricky dynamic for auto executives and clean-air advocates: Millions of Americans want EVs, but relatively high prices remain a speed bump to adoption.

Tesla still dominates the US market for EVs and managed a small sales gain in the recent quarter after months of skidding results. However, a crowd of rivals is closing the gap quickly, shrinking Tesla’s share of the EV pie to 41% from 80% four years ago.

General Motors, in particular, is gaining electric speed. The company captured 15% of EV sales in the quarter, led by its new Chevrolet Equinox, the third best-selling battery-powered machine. That’s up from 10% in the year-earlier period.

Source: Cox Automotive Inc.

Nearly half of US EV purchases in the first half of the year were made without any federal incentive, according to BloombergNEF. And there are now at least 11 EVs in the US with starting prices below that of the average car purchase. Chevrolet’s Equinox can be had for about $35,000, for example, and the brand just released a new version of its Bolt with a price tag of $29,000.

The road ahead for EVs, however, looks rocky, at least for a little while. Without federal credits, BloombergNEF forecasts 27% of the US market will be electric by 2030, down from the 48% share it estimated a year ago. In the current quarter, S&P Global expects EVs to comprise less than 7% of new car sales.

“The affordability issue is going to be exacerbated,” said Peter Nagle, an associate director at S&P. “It’s really going to be a sink or swim moment.”

The other way to buy a cheap EV

34%

The year-over-year uptick in used EV sales. Pre-owned electric cars and trucks in America are now almost as cheap as used gas-powered vehicles, on average, and are selling even faster, according to Cox Automotive.

Volvo’s strategy

“Volvo will be stronger if we electrify fast. But we need new plug-in hybrids — electric cars with a backup engine — as a bridge until charging is everywhere.”

Hakan Samuelsson
Chief executive officer, Volvo

Samuelsson also told Bloomberg that said his company will take a “huge step” next year in offering EVs with longer driving ranges and lower prices.