FYI: The shifting landscape of EVs in the U.S. amid evolving market dynamics and regulatory changes highlights an intriguing year for the automotive industry.
Electric Vehicle Market Dynamics in Q3 2024
Despite a rise in electric vehicle (EV) purchases in the United States during the third quarter of 2024, the market share for these vehicles experienced a slight dip. The EV segment saw its share of the light-duty vehicle (LDV) market drop from 7.4% in Q2 to 7% in Q3. However, there’s a silver lining: both sales and market share have increased compared to Q3 of 2023.
Surge in Non-Plug-In Hybrid Popularity
Interestingly, while EV market share declined slightly, the overall market for electrified vehicles—including hybrids, plug-in hybrids, and EVs—experienced growth. This was largely due to the burgeoning popularity of non-plug-in hybrids, which now account for 10.8% of the U.S. LDV market, setting a new record according to the Energy Information Administration (EIA).
Top Players and Regional Manufacturing Impact
Tesla continues to dominate nearly half of the EV market with a 48.8% share, followed by General Motors, Hyundai, and Ford. A significant 78.9% of all EVs sold in Q3 were manufactured in North America, with South Korean and German-made EVs contributing 7.3% and 5.3%, respectively. This trend is influenced by the Inflation Reduction Act, which tightened requirements for EVs to qualify for federal tax credits, placing emphasis on domestic manufacturing and sourcing.
Luxury Models and Market Challenges
A majority of EVs bought in Q3 (70.7%) were luxury models, marking the lowest proportion of such vehicles since Q2 2017. Tesla continues to be categorized as a luxury manufacturer, skewing these figures. The challenge remains a scarcity of affordable EV options, with the average new EV price standing at $56,351, a substantial 16% above the national average.
Year-Over-Year Sales Growth and Future Projections
In terms of sheer numbers, the U.S. saw over 346,000 EV sales through the third quarter, reflecting a 5% increase from 2023, accounting for 8.9% of all new car sales. Ford, positioned fourth in sales, showed remarkable performance in November with 11,000 units sold, registering a 21% yearly increase. Meanwhile, Honda’s Prologue also posted impressive numbers, selling over 6,800 units in November—a 66% rise compared to the previous month.
As the year wanes, several automakers appear to be gaining momentum despite prevailing challenges, such as high vehicle prices and stringent federal tax credit rules. The changing political climate, with a less EV-friendly presidency incoming, could also impact the market in 2025, suggesting a fascinating year ahead for industry watchers.
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William Kouch, Editor of Automotive.fyi
In conclusion, while the EV market faces challenges with fluctuating shares and stricter regulations, overall growth in electrified vehicles and strategic manufacturing alignments suggests a resilient and dynamic future for EVs in the U.S. automotive landscape.
