EV sales penetration projected at 8% in Q3

EV sales penetration is projected to reach 8% in the third quarter as new models come to market and incentives help drive adoption. Sales of EVs are estimated to total 308,000 units in Q3, making up about 8% of total vehicle sales nationwide, Stephanie Valdez-Streaty , director of industry insights at Cox Automotive, said Tuesday during the company’s Q3 industry insights call. EV sales have increased 80% year over year, she said. “At this pace, we are on track to surpass the 1 million mark by the end of the year, marking a significant milestone in the U.S.,” Valdez-Streaty said. “The market has enjoyed a few strong tailwinds, including government policies, regulations and incentives, all playing a pivotal role in promoting EV adoption. At the same time, customer choice is improving, with more EVs being launched each quarter, and quality of those vehicles in terms of performance and design continues to improve.” Nationwide, EV inventory sat at an average of 89 days’ supply year to date in September, up 271% year over year, according to Cox Auto. Supply is down from a peak of 110 days in early July, Valdez-Streaty said. “With this abundance comes challenges. One of the key challenges we face is how to effectively move this growing inventory and further stimulate consumer adoption,” she said. “With excess inventory, manufacturers are starting to cut prices and increase incentives.” The average price of an EV was flat sequentially but declined 19% YoY to $53,376 in August, Valdez-Streaty said. California leads sales Retail EV sales are primarily concentrated in California , which held 23% of EV sales nationwide in Q3, according to Cox Auto. Washington held 16% of EV retail sales during the quarter, followed by New Jersey at 10%. Dealership readiness for a shift to EVs, consumer education and awareness, and EV promotion all play a role in the geographic concentration of EV sales, Valdez-Streaty said. “Greater adoption is occurring on the West Coast and in a couple of pockets on the East Coast,” she said. “States with more generous incentives for EV buyers see higher adoption rates. These incentives can include tax credits, rebates and access to carpool lanes. Availability and reliability of charging infrastructure also play a crucial role in EV adoption.” EV sales are mainly concentrated in the southern half of the United States, Rick Ricart , president of Columbus, Ohio-based Ricart Automotive , told Auto Finance News . “Being in Central Ohio, we have not felt the impact of EVs yet,” he said. “The price point of EVs is still considerably higher than ICE vehicles, and we have an affordability issue in the industry. Until the prices start normalizing to where the average consumer can afford them, it will take time to see the EV market grow to match ICE vehicles.” Market player shifts Tesla continues to lead the EV market as the automaker cuts prices , but Chevrolet , Ford , Hyundai and other manufacturers are seeing sales grow, according to Cox Auto. “There will be ongoing shifts as the market evolves and as more models are introduced in different styling, price points and range,” Valdez-Streaty said. More manufacturers are gaining EV share as new models reach mainstream consumers, Charlie Wise , senior vice president and head of global research and consulting at TransUnion , told AFN . “We're starting to see the electric vehicle market move down from the luxury segments,” he said. “More manufacturers are introducing affordable EV models.” Plug-in hybrids and battery EVs make up a third of Volvo Car USA’s portfolio, Frank Vacca , head of new cars, said this month during Bank of America ’s EVolution 2023 event. “About a third of [those sales are] pure battery electric vehicles,” Vacca said. “We're seeing enthusiastic response from our recharge models.” Volvo is releasing two new electric models by 2025, he said. “We see continued growth in the electric space,” he said. “We know that we need to introduce more models into new segments and follow where our customers want us to go.” EV penetration is expected to continue growing. In fact, Bank of America projects EVs to make up about 11% of new-vehicle sales this year and 21% by 2025 driven by leasing and incentives. EV lease share of retail sales stood at 24% as of July, while lease share across all vehicle types sat at 20%, according to Cox Auto. EV leasing increased by 53% between December 2022 and August 2023, Valdez-Streaty said. “All battery-powered models benefit from [the federal tax credit] if they're leased because the [Inflation Reduction Act] categorizes them as commercial vehicles,” she said. “The lease option is an [IRA] loophole that could drive millions of electric vehicles through.” Auto Finance Summit, the premier industry event for auto lending and leasing, returns October 29-31 at the Bellagio Las Vegas and features a fireside chat with F ord Credit. To learn more about the 2023 event and register, visit autofinance.live/afs/ .

EV sales penetration projected at 8% in Q3

Incentives, leasing, new models driving adoption nationwide

Credit union liquidity crunch continues

UAW targets 30% wage bump to satisfy workers, grow members

Related Posts

Marine retailers, lenders conflicted on 2026 outlook

Bank auto finance share jumps to 28.9%

Longer term auto loans gain traction again

OEMs see EV sales plummet in November, ICE ticks down

UAW targets 30% wage bump to satisfy workers, grow members

Stay Informed with Our Newsletters

The Roadmap Podcast

Retrieve your password