Electric Vehicle Sales in the US: A Record-Breaking Quarter
Introduction
The electric vehicle (EV) market in the United States has witnessed a significant increase in sales, setting a
record in the last quarter. Despite the reduction in federal and state incentives for EV purchases, the industry
is on track to break the 1 million mark by 2023. This surge in sales is indicative of the growing interest in
climate justice and solutions, with more consumers opting for environmentally-friendly transportation options.
This article explores the latest sales figures, discusses the potential challenges to sustainable growth, and
delves into the factors driving this exponential increase in EV sales.
An Impressive Sales Surge
According to Wards Intelligence analysts and Cox Automotive, consumers purchased nearly 300,000 electric
vehicles between April and June, representing a year-over-year jump of about 50 percent. This growth is
especially remarkable considering the stricter federal tax credit rules introduced during this period. Even
plug-in hybrid sales witnessed an upward trajectory. These figures clearly demonstrate that there are certain
vehicles in the market that captivate buyers, making them less reliant on rebates and incentives.
A Changing Inventory Landscape
Despite the surge in sales, there are indications that the pace of growth may not be sustainable. Cox Automotive
reports that dealerships had, on average, a 53-day supply of internal combustion vehicles in stock by the end of
June. However, the inventory track for electric vehicles has significantly increased, with over 92,000 EVs
available in the second quarter, up from 20,000 in the previous year. This disparity points towards a growing
concern of oversupply and raises questions about demand keeping up with production.
The ‘Field of Dreams’ Moment
Michelle Krebs, executive analyst at Cox Automotive, refers to the current situation as the ‘Field of Dreams’
moment for electric vehicles. While automakers are ramping up production, the number of consumers willing to
embrace EVs is not growing at a similar pace. One of the primary deterrents for potential buyers is the price
point. Cox polls indicate that electric vehicles are generally more expensive than their gasoline-powered
counterparts. Additionally, concerns about charging infrastructure also contribute to hesitancy among consumers.
Disrupted Incentive Landscape
The incentive landscape for electric vehicles has become increasingly confusing, further impacting sales growth. A
year ago, dozens of models qualified for a federal tax credit of up to $7,500, with additional incentives offered
by various cities and states. However, the availability of such incentives has diminished, with states like
Oregon and New Jersey running out of funds for their reimbursement programs. Moreover, the Inflation Reduction
Law has narrowed down the list of models eligible for a tax credit, leading to fewer options for consumers.
Unique Insights: Roadblocks and Potential Solutions
Facing the Price Barrier
Price remains a significant barrier for many potential EV buyers. While electric vehicles offer several long-term
cost benefits, the upfront cost tends to be higher than that of traditional gasoline-powered vehicles. However,
it is essential to consider the total cost of ownership, including fuel and maintenance expenses, over the
vehicle’s lifespan. Educating consumers about the long-term financial advantages can help bridge the price gap.
Offering attractive financing options and lease programs can also make electric vehicles more accessible to a
broader segment of the population.
Expanding Charging Infrastructure
Charging infrastructure remains a concern for those considering the switch to electric vehicles. To address this
issue, government entities, private companies, and electric utilities need to collaborate to expand the charging
network across the country. Increasing the number of public charging stations, providing incentives for
businesses to install chargers, and investing in fast-charging technology are essential steps toward ensuring
convenient and widespread access to charging facilities. Integration with renewable energy sources can also
further enhance the sustainability of electric vehicle charging.
Streamlining Incentive Programs
To boost EV sales, policymakers must streamline and expand incentive programs. Reinstating or increasing federal
tax credits for electric vehicle purchases can make them more appealing to a broader consumer base. Additionally,
maintaining consistent and reliable state-level incentives will help create a favorable environment for electric
vehicle adoption. Clear guidance and transparent communication about the eligibility criteria for incentives are
crucial to avoiding confusion and ensuring that potential buyers are aware of the benefits available to them.
Summary
Electric vehicle sales in the United States have reached record levels, with nearly 300,000 EVs sold in the
second quarter of this year. Despite the reduction in federal and state incentives, consumer interest in
climate-friendly transportation options continues to grow. However, challenges related to pricing, charging
infrastructure, and a complex incentive landscape need to be addressed to ensure sustainable growth in the EV
market. By overcoming these roadblocks and implementing effective solutions, the United States can pave the way
for a future powered by green transportation.
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this story first appeared in Grindinga nonprofit media organization covering climate justice and solutions.
Electric vehicle sales in the United States set a record last quarter and are on track to break the 1 million mark by 2023, which would be a milestone for the industry. This increase comes even as many vehicle models have lost their eligibility for federal and some state incentives.
Wards Intelligence analysts and cox automotive reported that consumers bought nearly 300,000 electric vehicles between the beginning of April and the end of June. That represents a year-over-year jump of about 50 percent and included growth in May and June, the first two months after federal tax credit rules became more stringent. Plug-in hybrid sales also increased.
“There are some vehicles that are interesting enough for buyers that they don’t need a rebate,” says Christie Schweinsberg, Wards sustainability analyst, pointing to the ever-growing range of electric vehicles and options for consumers to choose from. “People will continue to want to buy.”
But there are signs that the torrential pace of sales growth may not be sustainable. According to Cox, as of the end of June, dealerships had, on average, a 53-day supply of internal combustion vehicles in stock. The inventory track for electric vehicles, on the other hand, more than doubled. Overall, there were more than 92,000 EVs available in the second quarter, up from 20,000 a year earlier.
“Demand is not keeping up with production, which is the opposite story from a year ago,” Michelle Krebs, executive analyst at Cox Automotive, says of electric vehicles. “We call it the ‘Field of Dreams’ moment. Automakers are building more, but not enough consumers have come to the field.”
Krebs attributes the glut to both the post-pandemic production surge and traditional consumer misgivings about buying electric vehicles. Price, he says, is the main barrier between buyers who cox polls, because electric vehicles are still generally more expensive than a similar gasoline-powered model. Concerns about charging infrastructure is another reason potential owners are staying on the sidelines.
The incentive landscape for electric vehicles has also gotten more confusing, Krebs says. At this time last year, dozens of models qualified for a federal tax credit of up to $7,500, and many cities and states offered additional incentives. Since then, some places, like Oregon and New Jersey, they have run out of money for their reimbursement programs. He Inflation Reduction Law legislation passed by Congress last year established manufacturing standards intended to encourage automakers to invest in U.S. battery production facilities and supply chains. That legislation has significantly cut, at least in the short term, the list of models eligible for a tax credit.
“We certainly see an impact from this,” says Michael Stewart, a spokesman for Hyundai, whose vehicles, which currently don’t meet the new requirements, were removed from the federal list. While sales of all Hyundai EV models grew despite losing credit, he believes progress toward the company’s and country’s ambitious EV sales targets could have been even greater with them.
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