EYE ON AUTOS: Electric Vehicle Sales Are Rising - Will it last?
Growing numbers of charging stations, lower-priced models, and better understanding of benefits are leading to a surge in EV sales.
By Martin Davis
EDITOR-IN-CHIEF
Editor’s Note: Welcome to our newest section, Eye on Autos, in which we will explore the best-selling cars in our region, gather great car deals for those searching for a new ride, and look at topics driving the automotive industry that affect individual buyers. Martin Davis will lead this new section. Prior to founding the Advance, Davis spent six years at U.S. News & World Report as the senior editor for automotives. He’s also a member of the Washington Automotive Press Association.
For more than a decade, all-electric vehicles (EVs) have been touted as the future of the automotive industry. And the automotive industry has gone all in, investing billions.
There were reasons to be optimistic.
The vehicles produce no harmful Greenhouse Gas tailpipe emissions, making them popular with people concerned about global warming. They deliver instantaneous power when the accelerator is pressed, making them popular with driving enthusiasts. And they don’t use gasoline, so EVs can deliver real savings to consumers.
(Determining how significant savings over gasoline-powered vehicles can be is a complex affair involving a range of variables. The Natural Resources Defense Council has an excellent article detailing these variables. To determine more precisely what your individual savings could look like, the U.S. Department of Energy offers a Drive-Electric Fuel Savings Calculator that allows you to tailor projected savings to your particular situation.)
Despite all the advantages, however, sales have mostly been sluggish. (In 2015, EVs accounted for less than 1% of total automotive sales. In 2020, that number was less than 2%.)
Until now.
Since 2020, the sales of EVs have begun to climb, especially among light-duty vehicles.
In 2023, EVs accounted for 8.5% of all light-duty vehicle sales. And when the sales of hybrids and plug-in hybrids are added in, electrified vehicles accounted for 19% of auto sales in 2023. That percentage is holding firm based on sales from January - June 2024.
Why Are EV Sales Climbing?
Three factors have been responsible for sluggish EV sales over the past decade.
Range Anxiety — Every car has a driving range, but cars with internal combustible engines (ICE) can fuel up in just a few minutes at gas stations in the United States. EVs require significantly longer times to charge, and they are not supported with as robust a refueling network as ICE vehicles.
Price — EV batteries are expensive, and this historically has meant EVs have much higher price points than ICE vehicles.
Selection — It costs millions for the automotive industry to bring new products online. For much of the past decade, while the number of automotive models for sale was well above 200, the number of EVs has been far fewer. In 2015, there were just 26 models available.
Within the past couple of years, each of these issues has become less of a concern with consumers.
Range anxiety has decreased as the number of charging stations has grown. Today, there are some 32,000 DC fast EV charging points across the country, and an additional 140,000 Level 2 chargers at public locations such as grocery stores near homes.
A National Renewable Energy Lab report estimates the country will need “182,000 publicly accessible fast charging ports along highway corridors” and an additional “1 million publicly accessible Level 2 charging ports primarily located near homes and workplaces” by 2030 to meet expected needs. (To better understand where charging stations currently exist, visit the Alternative Fuels Data Center.)
While we are still some distance from being able to find charging stations as easily as gas stations, the fear of not being able to find a charge when away from home are starting to lessen.
The price of EVs is also coming down, owing largely to rapidly falling battery prices. As reported in Bloomberg, “The average price of lithium-ion battery packs has fallen the most in seven years, according to a BloombergNEF survey, in a development likely to accelerate price parity between electric vehicles and gasoline-powered cars.”
EV prices are also declining because automotive companies have invested heavily in bringing more models to market at a price point that more individuals can afford.
Currently, there are some 60 EV models for sale in the U.S., according to Car and Driver. And beginning with the 2025 model year, a number of EVs with price points at $35,000 or less are slated to come onboard, including the Kia EV3, Volvo EX30, Chevrolet Volt EUV, and the Tesla Model 2.
Still, the demand for EVs is porous. A June 2024 survey done by Pew Research shows that only 30% of Americans would seriously consider buying an EV. Not surprisingly, younger people are more likely than older people to purchase an EV, and Democrats are much more likely than Republicans.
Will Trump Kill the EV Market?
There is little doubt that the market for EVs is strengthening. The question now is what will happen under incoming President Donald Trump, who has threatened policies that could greatly elevate the cost of an EV.
Certainly, threats of tariffs are causing automakers heartburn, as is the possibility of his ending the $7,500 tax credit on new EVs. But it won’t just be EVs that are affected by these policies. A Wall Street Journal story on Wednesday spells out that tariffs will adversely affect the entire industry, especially ICE models that currently cost less than $30,000.
Today, nearly one-third of all vehicles priced below $30,000 and sold in the U.S. are built in Mexico, … The border country has long been a go-to for automakers looking to defray the hefty expense of manufacturing a car, particularly on smaller models that sell for lower price points and have slimmer profit margins than larger trucks and SUVs.
President-elect Donald Trump has threatened to upend this strategy, pledging in November to impose 25% tariffs from Mexico and Canada, … Any new tariff-related costs are likely to be passed along to the consumer—at least in the near-term—and would hit the most affordable cars and SUVs the hardest, analysts and dealers say.
In short, EVs’ loss won’t necessarily be ICE’s gain. Yes, EV prices will climb, but so, too, will their ICE counterparts.
And then there’s the price of ownership. Right now, depending on where you live, EVs can save thousands over their ICE competitors when ownership costs are factored in. And that’s without the $7,500 tax credit.
So even if Trump kills the $7,500 tax credit, EVs can still be the smarter buy when lifetime ownership costs are factored in.
Here to Stay
More people are becoming familiar with, and aware of, the benefits of EVs. Owing to the economic advantages that often accrue to owning an EV, expect EVs to continue to gain market share, regardless of who sits in the Oval Office.
Automakers have been playing the long game with EVs. And even though they’re beginning to curb some of their investments in EVs, a full retreat is highly unlikely.
And that means EVs are here to stay for quite a while. Expect demand for them to continue to grow, too, given the economic benefits EVs often display over ICE vehicles when lifetime ownership costs are factored in.
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