FYI: Electric vehicle (EV) sales in the United States are poised to achieve record-breaking numbers in the third quarter of this year, despite a decline in Tesla’s performance.
Electric Vehicle Market Surges, Defying Tesla’s Recent Slump
Electric vehicle sales in the U.S. are on track for an unprecedented record, according to recent forecasts from Cox Automotive. The latest projections reveal that EV purchases are set to rise, even with industry giant Tesla experiencing a slower quarter.
Q3 Forecast and Market Growth
Cox Automotive’s predictions for the third quarter anticipate 388,844 new EV units to be sold, marking an 8% increase compared to the same period last year. This uptick brings EVs to nearly 9% of the U.S. car market. The figures underscore that, despite a deceleration in momentum and some hurdles in 2024, the EV market continues to expand.
“Consistent demand, albeit at a slower pace, is driving us toward record sales,” stated Stephanie Valdez-Streaty, Cox’s director of industry insights, during the data presentation.
Annual projections have been slightly adjusted downwards from earlier expectations, with Cox now forecasting 1.3 million EVs sold in 2024, up from 1.2 million the previous year. This revision reflects the slower pace of EV adoption and the increased popularity of hybrid vehicles.
Incentives Driving Sales
Several factors have bolstered EV sales. Notably, in August, EV incentives reached 13.3% of their average transaction price, significantly higher than the incentives for traditional combustion vehicles. Additionally, a favorable loophole in the federal EV tax credit has accelerated leasing instead of buying, propelling EV leases to 200,000 year-to-date—a staggering 148% increase from last year.
Leasing benefits allow any model to qualify for the $7,500 federal incentive, provided it is leased rather than purchased outright, which necessitates compliance with North American manufacturing and other stipulations.
Thriving Used EV Market
The secondhand EV market is also experiencing significant growth. Cox Automotive anticipates a record quarter for used EV sales, projecting 78,000 units to be sold, a 69% increase from Q3 of 2023. This segment offers attractive deals, particularly on Tesla Model 3 and Model Y cars, which have seen notable price drops year-over-year.
Challenges and Competitive Landscape
Despite these positive trends, high EV prices remain a barrier, with the average EV selling for $56,574 in August, per Cox’s data.
The Tesla Conundrum
Though other automakers like General Motors and Kia are seeing robust EV sales, Tesla’s numbers have been declining. Cox forecasts a 7% quarter-over-quarter drop in Tesla’s U.S. sales, with an estimated 152,829 units sold in Q3, down from 164,264 in the previous quarter. This trend represents a 7.3% decline year-to-date.
The flagship models, Tesla’s Model 3 and Model Y, are witnessing a slump. However, the Cybertruck has partially cushioned these losses, becoming the best-selling electric pickup in Q2. Still, its impact is limited due to its niche market and high price point.
Tesla’s overall market share is diminishing as competition intensifies, dropping from 49.7% in Q2 to 44% by August. Despite maintaining the largest share of EV sales in the U.S., Tesla’s slowing growth may be attributed to a dated product lineup, which heavily relies on the Model Y and Model 3. Both models have not seen significant updates, with a minor refresh for the Model 3 being limited in scope.
Future Outlook
The road ahead for Tesla will be closely watched, with its performance heavily influencing the overall EV market trajectory in the U.S. More affordable and diverse models entering the market could further stimulate EV adoption.
“With increasing competition, brands that offer the right products at the right prices, paired with excellent consumer experiences, will gain market share,” Valdez-Streaty concluded.
For more insights and updates, reach out to us at tips@automotive.fyi, or on Twitter @automotivefyi.
Written by: William Kouch, Editor of EV news at Automotive.fyi.
11 Comments
Wow thats so cool! I didnt think EVs will take over so fast. Tesla or not, still good news for earth I guess.
Yea, but they still too expensive for most people.
Right! The incentives make it better, though. 😃
Here we go again with the EV hype. They are not practical for long trips and the charging time is such a pain. Not everyone has time for that.
Totally agree! Why waste money on these when gas cars still work fine?
But what about the environment? Think about the kids!
Tesla must be cryin right now lol. They thought they on top then bam other brands come in.
This is just proof EVs are mad expensive. $56,574 for a car? Who they think they fooling.
EV sales up but used ones too? That’s pretty interesting considering they supposed to last longer. Maybe they not all that?
Maybe people want the latest models with better tech?
Or they just dont want them at all and trying to get rid of.