Umair Gaines
Electric vehicles are becoming increasingly popular, with global sales of non-electric cars having peaked in 2018. In the US, electric and hybrid vehicles made up 16% of light-duty vehicle sales in 2023, an increase from 12.9% in 2022. In the second quarter of 2024, this figure rose to 18.7%, with hybrid electric vehicles (HEVs) accounting for the majority of the increase. While electric vehicles are gaining traction, they still have a way to go before surpassing gas-powered vehicles, which made up 82.4% of sales in May 2024. The electric vehicle market is led by Tesla, which has seen massive growth, delivering about 114,000 vehicles in the first quarter of 2022. However, Tesla's market share has decreased as other automakers have entered the market, offering more competition and choices for consumers.
| Characteristics | Values |
|---|---|
| Percentage of new electric vehicle sales in the US in 2023 | 16.3% |
| Percentage of new electric vehicle sales in the US in the second quarter of 2024 | 18.7% |
| Percentage of new electric vehicle sales in the US in May 2024 | 6.8% |
| Percentage of new electric vehicle sales in the US in the first quarter of 2024 | 7.9% |
| Percentage of electric vehicles in the US in 2023 | 9.3% |
| Percentage of electric vehicles sold in the US in 2022 | 12.9% |
| Percentage of electric vehicles sold in the US in 2021 | 3% |
| Percentage of electric vehicles sold in the US in 2020 | N/A |
| Percentage of electric vehicles sold in the US in 2019 | N/A |
| Best-selling electric car in the US in the first quarter of 2024 | Tesla Model Y |
| Number of electric vehicles sold by Tesla in the US in the first quarter of 2022 | 114,000 |
| Number of electric vehicles sold by Kia in the US in the first quarter of 2022 | 8,450 |
| Number of electric vehicles sold by Ford in the US in the first quarter of 2022 | 7,400 |
| Number of electric vehicles in use globally in 2022 | 26 million |
| Number of electric vehicles in use globally | 40 million |
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What You'll Learn
- Electric vehicles and hybrids made up 16% of US light-duty vehicle sales in 2023
- California and Washington DC had the highest percentage of electric vehicles in 2023
- Tesla's price cuts played a role in the overall BEV price decline
- Luxury electric vehicles continue to sell well, accounting for 32.8% of total luxury sales in Q2 2024
- Electric vehicles and hybrids made up 18.7% of total new light-duty vehicle sales in Q2 2024
Electric vehicles and hybrids made up 16% of US light-duty vehicle sales in 2023
The US Energy Information Administration (EIA) reported that BEV sales are concentrated in the luxury category, with 31.3% of the total luxury vehicle market in 2023 compared to 1.7% of the non-luxury vehicle market. This trend is reflected in the types of BEV models offered by manufacturers, with 61% classified as luxury vehicles. However, it's important to note that luxury vehicle sales made up 80% of BEV sales and 13.3% of non-hybrid gasoline or diesel-fueled vehicle sales.
The increase in electric and hybrid vehicle sales is a positive sign for the US market, and it is predicted that there will be more and more electric vehicles on the road each year. However, it's important to acknowledge that the transition to electric vehicles is likely to be gradual due to the longevity of conventional vehicles, which last approximately 16 years on average. Additionally, electric vehicles, particularly those from well-known brands like Tesla, are often associated with a high cost of ownership, which can be a barrier for many potential buyers.
Despite these challenges, there are reasons to be optimistic about the future of electric vehicles in the US. For instance, California and Washington, DC, had the highest percentage share of electric vehicles in 2023, and other states like Washington, Oregon, and Colorado are also experiencing significant increases in electric vehicle usage. Furthermore, the number of electric vehicle models available continues to grow, with manufacturers adding 20 new BEV models in 2023, expanding the options for consumers.
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California and Washington DC had the highest percentage of electric vehicles in 2023
In 2023, electric vehicles and hybrids surpassed 16% of total new light-duty vehicle sales in the United States. This figure includes fully battery-electric and plug-in hybrid vehicles. In California, 25% to 26.7% of new car sales were zero-emission vehicles, the highest percentage in the country. California's ZEV regulations, which include the Advanced Clean Cars regulation for model years 2015-2025 and the Advanced Clean Cars II regulation for model years 2026-2035, have been a key driver of this success. The state has also benefited from its robust charging infrastructure, with over 10,000 fast EV chargers deployed.
Washington state also saw a record year for electric and plug-in hybrid vehicle sales in 2023, with these vehicles accounting for about 20% of all vehicles sold. This is more than double the national sales average of 9.5%. Federal and state incentives, such as the Inflation Reduction Act, which offers up to $7,500 in incentives, have helped make zero-emission vehicles more affordable for Washingtonians. Additionally, the state's Climate Commitment Act and Clean Fuel Standard are paving the way for major investments in EV charging infrastructure, addressing barriers to EV ownership.
California and Washington DC had the highest percentage of electric vehicle sales in 2023, with California taking the lead. The success of these two states can be attributed to a combination of factors, including favourable policies, incentives, and investments in charging infrastructure. These efforts are crucial in reducing greenhouse gas emissions and promoting the widespread adoption of electric vehicles.
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Tesla's price cuts played a role in the overall BEV price decline
Electric vehicles and hybrids are becoming an increasingly significant part of the global car market. In the US, sales of hybrids, plug-in hybrids, and battery-electric vehicles (BEVs) reached 16.3% of total new light-duty vehicle (LDV) sales in 2023, up from 12.9% in 2022. This figure rose further in the second half of 2023, reaching 17.9% of total LDV sales.
In the second quarter of 2024, the share of electric and hybrid vehicle sales in the US increased again to 18.7% of total new LDV sales, driven primarily by a 30.7% increase in hybrid electric vehicle (HEV) sales. BEV sales accounted for 7.1% of the US market in the second quarter of 2024, with luxury BEVs making up 32.8% of total luxury sales.
While the number of BEV model options and the availability of tax credits have contributed to the increase in sales, price cuts by manufacturers have also played a significant role in making BEVs more accessible to consumers. Tesla, the leading manufacturer in the electric vehicle market, slashed its prices worldwide in 2023, with the average Tesla vehicle transaction price dropping by 29% between June 2022 and December 2023. This move was aimed at combating declining sales and increasing competition, particularly from Chinese competitors.
Tesla's price cuts had a notable impact on the overall BEV price decline, with the average transaction price for BEVs falling to $50,798 in December 2023, 24.2% lower than the price peak in the second quarter of 2022. The price cuts also affected the used car market, with used BEV prices dropping significantly.
Additionally, Tesla's move forced other automakers to follow suit, creating a "waterfall effect" that pushed used electric vehicle prices down across the board. For instance, Ford cut the prices of the Mustang Mach-E in response to Tesla's price cuts. This ripple effect further contributed to the overall decline in BEV prices and increased accessibility for consumers.
While Tesla's price cuts played a role in the overall BEV price decline, it is worth noting that the company's market share has decreased. As of the second quarter of 2024, Tesla's market share in the electric vehicle market was 48.9%, dropping below 50% for the first time since 2017.
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Luxury electric vehicles continue to sell well, accounting for 32.8% of total luxury sales in Q2 2024
Electric vehicles are gaining popularity, with global sales of non-electric cars peaking in 2018. Electric vehicles and hybrids surpassed 16% of total 2023 U.S. light-duty vehicle sales, and this figure increased in the second quarter of 2024 to 18.7%.
Luxury electric vehicles are performing particularly well, accounting for 32.8% of total luxury sales in the second quarter of 2024 (Q2 2024). U.S. luxury vehicle sales made up 16.6% of the total light-duty market in Q2 2024. Luxury vehicles constituted a significant proportion of battery electric sales (73.8%), hybrid sales (8.3%), and plug-in hybrid sales (29.2%).
The strong performance of luxury electric vehicles is notable, given that they represent a substantial portion of the electric vehicle market. The high sales figures for luxury electric vehicles contribute to the overall growth of the electric vehicle market and reflect a shift in consumer preferences towards more sustainable transportation options.
The increasing sales of luxury electric vehicles can be attributed to several factors. Firstly, the availability of luxury electric vehicle models has expanded, providing consumers with a wider range of options to choose from. Additionally, price cuts by manufacturers, such as Tesla, have made luxury electric vehicles more accessible to a broader range of buyers. The decrease in average transaction prices for battery electric vehicles (BEVs) in the United States, excluding government incentives, is another contributing factor. The average price dropped from $57,405 in January 2024 to $56,371 in June 2024, according to data from Cox Automotive.
The strong sales of luxury electric vehicles indicate a growing demand for high-end electric cars, and this trend is expected to continue as manufacturers introduce new models and advancements in technology.
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Electric vehicles and hybrids made up 18.7% of total new light-duty vehicle sales in Q2 2024
Electric vehicles (EVs) and hybrids are becoming an increasingly common sight on roads around the world. In the second quarter of 2024 (2Q24), electric and hybrid vehicles accounted for an estimated 18.7% of total new light-duty vehicle (LDV) sales in the United States, according to Wards Intelligence. This figure represents a slight increase from the first quarter of 2024 (1Q24), when electric and hybrid vehicles made up 17.8% of total LDV sales.
The growth in the electric and hybrid vehicle market share in 2Q24 was primarily driven by hybrid electric vehicle (HEV) sales, which increased by 30.7% year-over-year. HEVs accounted for 9.6% of the total light-duty market in 2Q24, up from 8.6% in 1Q24. Plug-in hybrid electric vehicle sales also increased slightly, from 1.7% to 2.0% of the total light-duty market year over year. Battery electric vehicles (BEVs) saw slower growth in 2Q24 compared to the previous year, but still accounted for 7.1% of the US market.
While the overall sales of electric and hybrid vehicles in the US have increased, the market share of luxury electric vehicles has remained strong. In 2Q24, luxury electric vehicles accounted for 32.8% of total luxury sales, with luxury vehicles making up 73.8% of total BEV sales. This trend towards luxury electric vehicles is reflected in the average transaction price of BEVs, which, despite decreasing, remains higher than the overall average light-duty vehicle transaction price.
The electric vehicle market in the US is becoming more diverse, with new manufacturers entering the market and offering a wider range of models. Tesla, the longest-running pure electric brand, has seen its market share decrease to below 50% for the first time since 4Q17, as competitors such as Ford, Chevrolet, Hyundai, and Kia gain ground. Despite this, Tesla remains the leading manufacturer in the electric vehicle market, and its broad range of vehicles continues to be a common sight on US roads.
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Frequently asked questions
Electric vehicles and hybrids made up 16.3% of total new light-duty vehicle sales in 2023.
Electric and hybrid vehicles made up 18.7% of total new light-duty vehicle sales in the second quarter of 2024.
Tesla has enjoyed the highest market share over the past five years. However, in June 2024, its market share fell to 48.9-52% for the first time since 2017.
The Tesla Model Y was the best-selling electric car in the first quarter of 2024, making up 39.3% of new EV sales.
There were about 286 million cars on US roads in 2023, 9.3% of which were electric vehicles. This amounts to more than 26 million electric vehicles.
