US Electric Vehicle Sales Expected to Reach Record Levels This Year, but Trail Behind China and Germany

Electric vehicle (EV) sales are projected to achieve a historic milestone, constituting 9% of all passenger vehicles in the United States in 2023, according to Atlas Public Policy. This marks a significant increase from 7.3% of new car sales recorded in 2022.

The anticipated sales figures suggest that more than 1 million EVs will be sold in the US within a single calendar year, with estimates ranging from 1.3 million to 1.4 million cars, as predicted by the research firm.

While this demonstrates notable progress in the electrification of vehicles, the US still lags behind countries like China, Germany, and Norway.

In China, EVs accounted for 33% of sales, 35% in Germany, and an impressive 90% in Norway during the first half of 2023, as reported in a BloombergNEF EV outlook in June. These statistics encompass both battery electric vehicles and plug-in hybrid EVs.

Factors contributing to the increased adoption of EVs in the US this year include a reduction in prices. Tesla, a dominant force in the EV market, lowered prices for its popular vehicles multiple times throughout the year, prompting other automakers to adjust their pricing strategies. In addition, increased incentives on electric models and deeper discounts by dealers have stimulated consumer interest.

The Inflation Reduction Act, which raised tax credits for qualifying new and used EV purchases, further contributed to lowering costs for buyers, offering reductions of $3,750 or $7,500, depending on specific criteria.

Decreasing electric car battery costs, attributed to more affordable critical battery materials like lithium, have also contributed to the growing affordability of EVs.

However, despite the steady growth in US EV market share, challenges persist for potential electric car buyers. Factors such as unreliable and inaccessible public charging infrastructure and the higher upfront cost of EVs continue to act as barriers. While the auto industry works toward addressing these challenges, there is a need to bridge disparities and make EVs more accessible to a broader range of consumers.

Although the industry faces concerns about a potential slowdown in the EV market, with some automakers scaling back electrification targets, non-domestic car companies, particularly those from China, are expanding their plans. Expectations include Chinese EV-makers like BYD entering the US market in the coming years.

Several US states have set target dates for a majority of vehicle sales to be zero-emissions. California and Washington have mandated that 100% of new vehicles sold be zero-emission by 2035, while New Jersey plans to ban the sale of new gas-powered vehicles by the same year. iiiiiiiii