But Sales Growth Continues Unabated

Let’s get the doom and gloom stuff out of the way from the start. We’ve all read about Hertz selling off 20,000 EVs, Ford slowing production of their F-150 Lightning, and how the recent bitterly cold weather lengthened charge time and reduced full-charge range by nearly 30%.

Some interpret this news as foreshadowing a collapse in EV demand. However, the glass half-empty perspective is contrary to the actual data. In fact, the numbers point towards a positive 2024 sales outlook.

According to Cox Automotive, 1,189,051 EVs were sold in the U.S in 2023. That’s an increase of 379,312 from the number of EVs sold in the U.S in 2022.

Quarterly data shows that 2023 Q4 EV sales increased 40%, year over year, compared to Q4 2022. That’s less of an increase than Q4 2022 compared to Q4 2021 (59% YOY), but still healthy and indicative of continued strong sector growth. To quote Kelly Blue Book, “The EV market in the U.S. is still growing, but not growing as fast.”

Why the Optimism?

Cox Automotive is forecasting that all-electric vehicles will account for over 10% of total vehicle sales in 2024 – compared to 7.6% last year. A recent survey by Escalent, a data analytics consulting firm and presenter at the 2024 NADA conference, reports that seven states have already reached the target threshold of 8% EV ownership*. There are several reasons underlying the upbeat sales projections, including:

  • Price Reductions: manufacturers are reducing sticker prices in an effort to grow/maintain market share.
  • Battery Technology: improvements to battery technology and efficiency are reducing consumer “range anxiety”.
  • More Models: dozens of pure electric models are set to debut by the end of 2024.
  • Expanded Charging Infrastructure: federal programs designed to promote the build-out of charging stations throughout the country.
  • NACS: adoption of TESLA’s charge port standard by North American OEMs.

With any technology transition, there are bound to be fits and starts, successes and failures. The EV transition is no exception, so periods of slower growth in the short term are not unexpected. However, consumer behavior is ultimately driven by the benefits new technology provides. Escalent’s survey revealed the attributes consumers were seeking in choosing EVs over ICE vehicles, including lower operating cost (49%), convenience in the form of reduced gas station visits (38%), and environmental benefits (38%). In Q&A, K.C.Boyce of Escalent spoke of another survey result – that when replacing their car, 93% of EV owners seek out another EV. Retention numbers like these suggest that consumers are getting the benefits they seek.

For help installing EV charging at your business and managing resulting utility costs, contact Maria Fields at (914) 646-4016, mfields@sprocketpower.com.

*California, Nevada, Hawaii, Washington, Oregon, New Jersey, and Colorado