Rising EV sales in USA

The United States is experiencing a remarkable surge in electric vehicle (EV) sales, driven by Tax credits, discounts, Ford, BYD, Tesla, Rivian

AUTOMOBILE INDUSTRY NEWS

Salman Chaudhary, Founder Pinkywheels.com

7/10/20235 min read

Rising Sales of Electric Vehicles in the US

The United States is experiencing a remarkable surge in electric vehicle (EV) sales, driven by a combination of factors that have significantly lifted demand for EV manufacturers. Tax credits, discounts, and improved production capacity have played pivotal roles in this upward trajectory.

Ford EV plant USA
Ford EV plant USA

Highlights

  • Electric vehicle (EV) sales in the US have surpassed the 4 million milestone, driven by factors such as price reductions and tax credits.

  • Price cuts by Tesla and Ford, along with tax credits of up to $7,500, have contributed to the surge in EV sales.

  • Tesla's sales are growing, and the overall EV market is experiencing robust growth, indicating strong demand.

  • It took nearly eight years to sell the first 1 million EVs, but the pace has accelerated significantly.

  • Tesla, General Motors, Rivian, and BYD reported impressive sales and deliveries of EVs during the second quarter.

  • Tesla holds a significant market share of around 61%, while General Motors accounts for just over 4%.

  • EVs still represent less than 10% of total new vehicle sales but are more popular in regions like California.

  • Some in the auto industry have expressed concerns about the rapid transition to EVs, while others support it.

  • The easing of the supply chain crisis and improved production capacity have contributed to the growth of the EV market.

  • Discounts offered by Tesla and Ford, along with tax credits, have boosted EV sales, primarily benefiting Tesla.

US Electric Vehicle Sales Surge to 4 Million Mark

Data and analysis from consultancy Atlas Public Policy reveal that electric vehicle (EV) sales in the US are rapidly gaining momentum, surpassing the 4 million milestone by the end of June. This surge in sales can be attributed to several factors, including price reductions by Tesla and Ford, generous tax credits of up to $7,500 for consumers, and increased manufacturing capacity. According to Atlas founder Nick Nigro, the growing market for EVs is evident as more people who were previously purchasing traditional combustion engine vehicles are now opting for EVs. Tesla's sales are on the rise, but the overall market is experiencing robust growth, indicating a strong demand for EVs.

The first million battery-powered cars, trucks, and vans took nearly eight years to sell, reaching the milestone in 2018. The second million was achieved in approximately 32 months, and the third million followed in just 15 months. The pace has further accelerated, with the fourth millionth sale occurring in a mere 10 months. During the second quarter, Tesla, General Motors, Rivian, and BYD reported impressive sales and deliveries of EVs in the US and China. While EV sales at Ford dipped by 2% in the second quarter compared to the previous year, they still saw a 12% increase in the first half of this year compared to 2022.

Tesla currently holds a significant market share, accounting for around 61% of EV sales, while General Motors only makes up slightly over 4%. However, despite the upward trend, EVs still constitute less than 10% of total new vehicle sales, primarily appealing to early adopters. Although pockets of the US market, like California, have embraced EVs, with nearly a quarter of new vehicle sales being electric in the first three months of this year, the sense of EVs being mainstream is not widespread across the country.

Not everyone in the auto industry supports the rapid transition to electric vehicles. The Alliance for Automotive Innovation, a trade group representing major car manufacturers, has expressed concerns about the stringent emissions standards proposed in April, claiming they shift the country's electrification goals significantly. The United Auto Workers union also advocates for EV adoption standards to be set at more feasible levels over a more extended period of time. Nevertheless, as EV sales continue to grow, more people are expected to become acquainted with EV owners, leading to increased comfort and acceptance of EVs on the road.

The overall improvement in the auto industry, including electric models, can be attributed to the easing of the supply chain crisis. Manufacturers now face fewer challenges in obtaining the necessary parts to build cars and trucks. Additionally, newer industry players like Rivian have overcome initial production issues, leading to improved output. Rivian, for example, exceeded Wall Street expectations by building nearly 14,000 trucks in the second quarter. Furthermore, Tesla recently announced its plans to open its Supercharger network to owners of Ford, GM, and Rivian vehicles, aiming to alleviate anxiety among US drivers about long-distance travel and limited fast charging infrastructure.

Discounts offered by Tesla and Ford have played a significant role in boosting sales. Tesla experienced record-breaking deliveries of 466,000 cars between April and June after reducing prices across their models by up to $13,000 in the US. In response, Ford priced its Mustang Mach-E between $46,000 and $64,000. Tesla further lowered prices in March, making the Model S 5% cheaper (starting at approximately $90,000) and reducing the cheapest Model X by 9% (starting at around $100,000). Tax credits have also contributed to the increase in EV sales, although the exact impact remains unclear. President Joe Biden's Inflation Reduction Act, a climate change and industrial policy law, grants consumers up to $7,500 in tax credits. However, the availability of the full tax credit is limited based on factors such as North American production and the origin of battery materials. Currently, only 10 out of the 68 EV models available in the US qualify for the full credit. Tesla is one of the beneficiaries since the law removed the cap on receiving the credit after a carmaker sells over 200,000 EVs, a threshold Tesla surpassed five years ago. While the tax credits stimulate demand for EVs, Joe McCabe, CEO at AutoForecast Solutions, believes they primarily benefit Tesla.

Quinton Gaines, a new Tesla owner in Clearwater, Florida, exemplifies the impact of these market dynamics. The Gaines family initially attempted to purchase a Ford Mustang Mach-E but encountered difficulties. Despite ordering the vehicle in November and being promised delivery within six months, it arrived malfunctioning during a test drive, raising concerns about its reliability. Faced with this setback, they decided to purchase a Model Y instead. Gaines appreciated that the Model Y was eligible for the full tax credit, provided a sense of trustworthiness, and had the practicality to accommodate their family's needs.

As the electric vehicle market develops, car manufacturers are fiercely competing for attention and customers. Joe McCabe emphasizes the current competitive nature of the industry, comparing it to the "Wild West."

EV on a charger
EV on a charger
EV plant USA
EV plant USA
EV plant in USA
EV plant in USA