US to overtake Germany to become second-biggest EV automotive market
Market researcher counterpoint finds the sale of electric vehicles in US has gone up by 79% year over year in first quarter of 2023. US is a fast growing market for electric vehicles, this got further boosted by introduction of an EV tax credit of up to $7,500. However brands like Hyundai, Audi, BMW, Volvo and Nissan remain ineligible for the EV tax credit.
Tesla is a very tall leader in this market, which has sold more EVs than the next 18 automotive groups combined in Q1 2023. US EV sales expected to reach near 1.5 million units in 2023 if economic conditions continue to improve, finds Counterpoint. With this high-growth, US overtakes Germany to become the world’s second-largest EV market. And the largest one in the market is China.
Counterpoint reports Battery Evs (BEV) accounted for 81% of all passenger EV sales in the US while plug-in hybrid Evs (PHEVs) made up the rest. In Q1 2023, Tesla’s sales outperformed the combined sales of the next 18 automotive groups, which collectively represent 34 automotive brands.
Further points and comments shared by counterpoint includes:
Commenting on the market dynamics, Research Analyst Abhik Mukherjee said, “Total US passenger vehicle sales improved YoY in Q1 2023. The US economy is showing signs of recovery with lower inflation and improving consumer sentiment. Although EV sales saw strong growth during the quarter, those of conventional passenger vehicles remained flat. One reason was the introduction of an EV tax credit of up to $7,500, which has played a crucial role in driving up EV sales. Currently, around 20 models in total offered by Tesla, GM, Ford, Stellantis, Rivian and Volkswagen are eligible for the tax credit. However, strict eligibility conditions set by the US government have excluded brands such as Hyundai, Nissan, BMW, Audi and Volvo from benefiting from the EV tax credit scheme in 2023.
Image below: USA BEV and PHEV Sales share - Q1 2023
The top 10 EV models in the US accounted for 69% of overall passenger EV sales during the quarter. Tesla’s Model Y retained its title of the best-selling EV model, while it also earned the title of best-selling passenger car model globally. Apart from BEVs, PHEVs are also gaining popularity in the US.Top Models Q1 2023 - US EV sales
Commenting on the market outlook, Research Director Jeff Fieldhack said, “With the US economy showing signs of recovery, the auto industry, particularly the EV sector, is being helped by government policies announced last year. Tax credits for new and even used Evs are helping consumers, while investments in streamlining the EV battery supply chain, the establishment of a robust network of EV charging stations and the setting up of battery recycling plants nationwide will all support EV sales growth. Therefore, we expect US EV sales to reach around 1.5 million units in 2023 if economic conditions continue improving.”