EV Sales Growth Has Slowed. Does It Mean Anything?
This past summer, with supply chain issues resolving and factories once again humming, electric vehicles started piling up on dealer lots. Between January and July 2023, reports the trade paper Automotive News, the “days’ supply” (an industry metric used to measure unsold inventory) jumped for EVs, rocketing from a brisk 59 days to a worrisome 111 days. Meanwhile, the inventory of internal-combustion vehicles remained relatively flat in the mid-50s, proving that there were buyers out there, just not for electrics. (As of December 2023, EV days’ supply was 114 days, versus 71 days for the total market.)
An industry that only 18 months ago was rushing head-long to expand battery manufacturing and race to market with full electric product lines suddenly nailed the brakes. Ford, simultaneously reeling from a costly UAW strike, said it will slow-roll an earmarked $12 billion in electrification spending, delaying product launches, cutting production of its Mustang Mach-E electric crossover and F-150 Lightning, and pushing back construction on one of two planned battery plants. GM and Honda likewise said they are scrapping an agreement to jointly produce compact electric crossovers.
On the front lines, Mercedes-Benz dealers were in open revolt over the factory’s unwillingness to put incentives on its slow-moving EQ line of pricey electrics, saying they are losing customers to rivals. Meanwhile, back in 2020, GM offered its Buick and Cadillac dealers a choice: Either invest upward of $200,000 in electric infrastructure for their dealerships or sell their franchises back to GM for cash. Almost half of Buick dealers and one-third of Cadillac dealers took the buyout.
Is the EV transition over before it ever really began? Probably not. The hasty 180 on EV investments likely says less about the long-term viability of electrics and more about present dilemmas. The industry is nursing fresh wounds from strikes and previous bad bets, including Ford’s write-off of $1 billion following the implosion of Argo AI and GM’s staggering $8.2 billion loss (and counting) on its Cruise autonomy division. Add in the turbulence caused by the 2022 Inflation Reduction Act, which places restrictions on EV tax credits so that they apply only to American-made vehicles with U.S.-sourced components, and it’s easy to see why the industry is unsettled.
The ride into an electric future was bound to be bumpy. Now that early adopters have rushed out and purchased electric vehicles, sales growth was certain to slow as the industry gets on with the laborious task of convincing a wider (and more cautious) buying population that EVs are for them. The timing could be better; the market is currently suffering from high interest rates that make new-car purchases more expensive, and there’s a surplus of high-end EV offerings costing $70,000 and up.
Currently the pricing gap between EVs and internal-combustion-engine (ICE) offerings in the hot compact SUV segment is almost $20,000, with electrics retailing above $50,000 while comparable ICE crossovers are $35,000. Sure, tax rebates help close the gap, but the numbers look daunting to buyers watching their dollars. At the same time, older, more affordable EV options, like the Chevrolet Bolt and VW e-Golf, have been taken off the market and their replacements are still on the drawing boards.
Richard Shaw, a retired airline captain in Los Angeles, is an example of the disconnect between consumer demand and industry supply. Four years ago, he bought his first electric car, a new Volkswagen e-Golf, for $19,000 after rebates and incentives. “If you have two cars in the household, you’d be crazy not to have one be electric,” says the EV convert. “They are much cheaper to operate and perfect for local trips, and we find we take the electric way more than the other car.” However, the e-Golf has since gone out of production, as has the similarly priced Chevy Bolt, leaving the base Nissan Leaf as the lone sub-$30,000 electric.
Some buyers may have deferred their purchases in 2023 owing to changes in the Clean Vehicle Credit, the $7500 federal tax credit that, as of this year, allows buyers to use the credit directly as a down payment.
EV sales growth has slackened, but electric cars are still selling—at a rate of about 1 million per year. If EV sales aren’t proving to be a tidal wave, they are definitely still a rising tide.
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If you want a cheap EV, the used market seems to have a ton of decent smaller cars with decent range available at very reasonable prices, especially if you find one that just got a new battery under recall or is eligible to get one, like a Bolt.
But even for new EVs, the hype cycle is real. We seem to be entering the “trough of disillusionment” portion currently, as all early adopters already own EVs and the rest of the car buying public can clearly see the tradeoffs. I fully expect in a few years that EVs will be quite compelling competition for ICE vehicles for a very large portion of the population after the automakers learn from their early mistakes.
To me it’s not so much the EV’s ( other than price) as it is the lack of infrastructure. Can’t carry a spare battery if you run out, or if the charger you planned on using is inoperative.
Point one: Despite the inventory of EVs, I also see reports that EV sales are up year over year. So what gives? My thought, more EVs are being sold, but manufacturers over-produced for the market, leading to an inventory backlog.
Point two: To really determine the extent of the EV revolution, the question is not how many EVs are sold, but who is buying them. According to the 2020 census, 8.5 percent of households have no vehicle, and 59% have to or more vehicles. I therefore infer that 32.5% of households have only one car. My question is what percentage of these households have embraced the EV. As I have said many times, I am not anti-EV and I believe that for many households an EV could fulfill many of their needs quite adequately. So yes, a household that can afford more than one car could certainly add an EV to their fleet or get one to replace an ICE vehicle.
Point three: EVs have been on the market for quite a while now. What percentage of EV sales are first time buyers versus people who are simply replacing one EV with another.
My guess is that the vast majority of EV owners have a garage. For people without a garage, buying an EV is a tough sell. Namely people that park on the street or in large apartment/condo building parking lots.
I wouldn’t charge an EV in my garage. I would keep it as far away from anything that I can while charging.
Watching the local tv news during our recent cold spell in the Detroit area I saw a lot of complaining drivers of EV’s. Their EV’s either didn’t start or they got very low mileage in the cold spell. Went to their local recharging stations and several of the chargers were not working and they had to line up to get to use a good one and they were late for work. Every EV owner said on the tv news, “I and trading in for a gasoline car!!!!
This hits so many of the repeated anti-EV talking points that I highly doubt this happened. Sure, what you describe is possible, but the likelyhood is so low. For one, EV owners can charge at home. It’s potentially level 1 charging, relatively slow, but totally possible. Also, it’s not the cars fault the owner failed to prepare for a weather event that would affect them. If an ICE car runs out of fuel, we don’t blame the car. If an EV is low on charge, we shouldn’t blame the car.
Meanwhile Tesla dealers have 50 person lineups of people buying their cars because they are better than anything, gas or electric. Still, there are simply no affordable EVs for the mass market majority who want them. Tesla will have one soon but when? Ford will too. The other makers better do likewise or they will be left behind. Thankfully the price of gas is now rising rapidly. That should inspire a few people.
“Thankfully the price of gas is now rising rapidly.” You are thankful for that? Those of us who do not have unlimited finances are not so thankful, but it sounds like money is not an object for you.
Preaching to the choir here John. The poor, who I am sure Dave claims to care about, are the ones most affected by rising fuel prices. Everything, mainly food, gets more expensive, to the least able to absorb it.
Got love people like Dave who think they need to tell people how to live their lives.
Yes, because I have never seen anyone else do that in these comment sections. A few regular commenters easily come to mind.
When they make an extension cord long enough, I “might” conisder an electric blender to drive around. It is truly dead end technology…..
There are plenty of affordable EVs out there. WAY out there. The primary makers are in China. I read about one that retails for a bit more than four grand, carries four, and has a 200 mile range. Great commuter car. If I remember the article correctly, they’re also available in Europe, rebranded under a French or maybe Italian name.
With the current hostility towards China in this country today, I doubt we’ll see those over here any time soon.
With reports of the environmental damage cause by mining the rare earth elements needed to produce the batteries to include tons of mining tailings left in the wake of the mining itself and the production of batteries in China and other countries with few environmental safeguards, EVs are not saving the environment at all. Then add to that the increased rubber particulates added to the air caused by the tire wear due to the heavier weight of EVs compared to ICE vehicles. Then there’s the issue of the real possibility of fires while charging or even while parked not to mention the essentially slave labor used to mine these elements. Sorry virtue signalers, I’ll stick to my internal combustion vehicles which are quite clean these days.
Oh, and I forgot to mention, when the batteries reach the end of their useful life, they cannot be recycled so are thrown into land fills to eventually pollute the ground water. Same environmental hazards with solar panels and windmill blades can’t be recycled either so are thrown into land fills. Bottom line is virtue signaling creates it’s own environmental disaster.
Cite your source for saying “they cannot be recycled so are thrown into land fills to eventually pollute the ground water,” please.
Also, “Then there’s the issue of the real possibility of fires while charging or even while parked” only requires changing out “charging” for “fueling” and the risk is true for ALL vehicles, electric or internal combustion. Gasoline is quite flammable after all.
OK, Randy, here’s 3. Do an internet search and you’ll find many more: https://www.youtube.com/watch?v=SIpXkQhq1ps, https://www.firerescue1.com/vehicle-fire/articles/video-luxury-ev-catches-fire-destroys-fla-house-qa8LTohEKLu56kUI/
https://www.reddit.com/r/electricvehicles/comments/158uase/ev_cars_bur
I’ll also include this,
https://futurism.com/the-byte/electric-cars-lighting-houses-on-fire
Also it takes approximately 4000 gallons of water to extinguish an EV fire. That or dig a pit, fill with water and push the burning EV in it. One story about the challenges is here.
https://www.wtae.com/article/electric-vehicle-fires/46818027
Regarding recycling, they might be recyclable in the future but they’re not designed to be now.
https://www.science.org/content/article/millions-electric-cars-are-coming-what-happens-all-dead-batteries
Keep an open mind to the issue but believe none of the hype the government is feeding you because current EV technology is not the answer. There is a battery developed by a US govt funded company in Washington State named UniEnergy Technologies called the vanadium redox flow that could very well make EVs viable except the U.S. Department of Energy (DOE) gave China exclusive rights to a green battery capable of powering an entire house for decades costing millions of US tax dollars to develop. This is according to a report by NPR. https://www.npr.org/2022/08/03/1114964240/new-battery-technology-china-vanadium
At a $20000 premium for an EV and Gas at $3.30 per gallon and an average MPG of 25.
I would need to drive over 150000 miles to break even.
What’s my incentive??
This is a very real point. There is the reduction in air borne pollutants, but if the R.O.I is 150,000 miles, then it’s a hard sell just based on that alone.
Then throw in a new battery, and it’s even harder to justify based on dollar numbers. I also predict electricity prices to rise dramatically once we take the hook.
Eventually they’ll simply be cheaper to build than a gasser. They’ve already gone from unprofitable science experiment/compliance car to viable, semi-profitable car that is practical for a good chunk of the population. As battery supplies go up and the tech evolves the prices will go down a LOT. Since they’re mechanically simpler, require less maintenance and are cheap to run the incentives will be built-in, which hopefully means the government will stop throwing money at them. (Though I wouldn’t count on that!)
And the premium really isn’t $20k anymore, at least not on “regular” vehicles. I suppose “Regular” means “not Tesla”. I’m not a huge fan of theirs, but not for the typical reasons. They’ve done some great stuff and really pushed the tech and that gives them advantages in battery cost and the Supercharger network, but if you get in a fender-bender then good luck finding a new fender!
The other car companies understandably wanted to make their first EVs as profitable as possible, which meant high transaction prices, but that’s not working out as well as they’d hoped. If one of the biggest selling points is the fact that it’s cheap to run/maintain then a high vehicle price makes that argument fall on deaf ears. Now, a cheap to run/maintain car that is also cheap to buy? Then you have something. That’s why the Bolt sold so well and exactly why it’s coming back (as an updated model) next year. For some reason the article doesn’t mention it’s merely a hiatus in production until the other factory gets going in 2025.
EV’s are compromised as is. The biggest issue is the battery. If you live and never leave the city it can work out but as stated early adopters are done so now it’s down to being an expensive car that you need to worry about the traditional financial issues like high interest rates or less than stellar leasing.
I shake my head at reporting on EVs. First, that it’s inevitable we’ll all be driving EVs in the future. I’ve predicted for years that EVs would be a niche, sometimes larger, sometimes smaller. For the foreseeable future EVs are too awkward a technology. The supply of raw materials to produce an EV fleet does not exist, the logistics too forced. Those in urban areas discovered that charging at charging stations is as expensive per mile as gasoline.
EV sales will surge when EVs are a superior alternative to ICE vehicles. No government that tries to force the issue will survive.
You’ll hear the same talking points from anti-EV and pro-EV people here as elsewhere, but what it boils down to is this. They work right now for a lot of the population, but the politics and hype from both sides make people want to fight about it. I bought a used Bolt because it works for me quite well. It was inexpensive to buy, costs little to operate, has an excellent warranty, requires essentially no maintenance, and has gobs of torque so it can run and hide from equivalent gas powered economy cars. The downside is that it’s older battery tech and even though it has “fast charging” it cannot charge nearly as fast as newer designs. It’s more than adequate for my needs and will be for the foreseeable future. Of course it’d be terrible for long distance road trips because of the aforementioned slow fast charging, but that isn’t why I bought it.
The E-Golf is gone because it was a compliance car and is woefully out of date at this point. It’s fine for what it is, but the pre-refresh model had a range of something like 87 miles, and the post-refresh car had something around 120. That’s half of what the Bolt has, which is also out of date.
The Bolt is gone because it’s old enough that it was supposed to be retired, but people want it badly enough that it’s coming back. They already decided to use the factory for different cars, so the assembly line will now be in a completely different factory with a much more up-to-date battery that will allow faster charging at a lower cost*.
*whether that cost comes as profit for the company or a lower price has yet to be seen, but my bet is on it making more profit, as that was lacking anyway.
Cheap electric cars is what will change the marketplace, and those are just starting to come en masse. We’ll see how it plays out, but electric cars aren’t going away, no matter how much some people hate them. Gassers? Electric cars simply can’t do everything they can and probably won’t for some time, so those aren’t going away either, no matter how much some other people hate *them*.
TL,DR: The truth is where it almost always is, somewhere in the middle. Electric cars aren’t the devil, but they won’t ‘save the world’, either.
Where is our small efficient inexpensive electric car? The technology has been sitting on a dusty shelf. Its all about price, price, price, efficiency, efficiency, efficiency! Ford making the wrong sized truck electric and a confusing heavy car with the sacred “Mach” attached to it was a deliberate path to kill electrics. If you wanted to kill electric expansion, that’s exactly what I would do. They simply do not want to offer an efficient car for the masses with an affordable price tag. Look at them trying to hold off the 200 or so Chinese companies that have no problem whatsoever making E.Vs of every size, shape and price. This deliberate catastrophe pails in comparison to the 70’s when they were caught out of touch “by design” and ignorant of the changing market. If Tesla really makes a small model 2? They will need 20 million for the U.S. market alone.
In China.
I will NEVER have an EV. The best thing I can say about them is they will certainly drive up the price of old restored ICE vehicles.
No one I know would purchase an EV without government incentives. I don’t want “the” or any government influencing “free” market decisions no matter how low the purchase price! Government’s job is to protect me, not to temporarily entice me how to spend my money. We must measure everything on the “true” value a product brings to society without incentives or reparations.
The first “real” electric car was designed in 1888 by a German named Andreas Flocken. Technology has solved many safety/performance issues since but a major problem then and now is vehicle cost and the sourcing of electricity. I hope EVs make their own way, on their own merit, without government subsidies. When has an artificially supported product ever succeeded on it’s own in the long run? The government does not know how to swim in the “Shark Tank” of business.
“How much does the US subsidize the oil industry?
In the United States, by some estimates taxpayers pay about $20 billion dollars every year to the fossil fuel industry.”
The Energy Information Administration (EIA), an independent agency of the U.S. Department of Energy, evaluated the amount of subsidies that the federal government provides energy producers for fiscal years 2016 through 2022, in its report Federal Financial Interventions and Subsidies in Energy, updating its previous subsidy reports. Federal subsidies to support renewable energy formed nearly half of all federal energy-related support between fiscal years 2016 and 2022. Traditional fuels (coal, natural gas, oil and nuclear) received just 15 percent of all subsidies between FY 2016 and FY 2022, while renewables, conservation and end use received a whopping 85 percent. Renewable subsidies more than doubled between FY 2016 and FY 2022, increasing to $15.6 billion in fiscal year 2022 from $7.4 billion in fiscal year 2016 (both in 2022 dollars). Federal subsidies and incentives to support renewable energy in fiscal year 2022 were almost 5 times higher than those for fossil energy, which totaled $3.2 billion in subsidies. The subsidies in EIA’s report do not include state and local subsidies, mandates or incentives that in many cases are quite substantial, especially for renewable energy sources. EIA also did not include the massive subsidies authorized in the Inflation Reduction Act (IRA) since it was passed in August 2022. Goldman Sachs has estimated the costs of that bill at $1.2 trillion.
Clean energy is a ripoff, it is costing the taxpayers trillions and driving the cost of energy up. This is why the taxpayer is giving so many handouts to low income People and others in need. In addition, why does the the average taxpayer have to give tax incentives to rich people to buy an over priced EV?
My 2021 Kia Forte cost ( if I would have paid list) about $20000, gets close to 49 MPG on the freeway at 75 with a/c on, handles great, & wont wear you out on a long drive. About 450 miles on a tank. If they want to sell EVs to the masses, then they have to match those figures. The average small family cant spend 30K + on a vehicle with the idea that they are limited with so many things such as where to charge it, range, etc. I agree it might be great as a local run around town car, but what about when you want drive 500 miles to grandmas house & don’t want to stop a couple times en route to charge while keeping the kids happy