Last quarter, the US electric vehicle revolution reached yet another significant milestone, although more widespread adoption may still be a long way off. This is happening as Tesla’s lead is getting closer.
Automotive research company Kelley Blue Book (KBB) reports that US EV sales in the third quarter exceeded 313,000, up about 50% from the same period last year and almost 15,000 over the 298,000 sold in the second quarter. The parent company of KBB, Cox Automotive, reported that the EV market share reached 7.9%, the highest level ever and an increase from 6.1% the previous year.
Chief economist at Cox Automotive Jonathan Smoke stated, “Higher inventory levels, more product availability, and downward pricing pressure have helped spur continued linear growth of EV sales in the US market.”
Three years ago, the annual total of electric vehicle sales exceeded 250,000. According to KBB, this year’s sales are expected to surpass one million. The KBB also said that, although in small amounts, automakers including Volvo, Nissan, Mercedes, and Hyundai observed increases in EV sales of over 200% and that there were already 14 new EV models available.
Naturally, Tesla is the 800-pound monster in the room. In the US, it sold over 150,000 EVs, or precisely 50% of the total number sold. Although still a sizable portion, Tesla’s market share has been declining recently, falling from 62% a year ago to 50%, the lowest percentage ever.
Tesla’s overall sales volume is rising, climbing 19.5% year over year and above the industry’s overall growth rate of 16.3%, according to KBB, despite the company’s declining market share.
Over the past year or so, Tesla has been aggressively implementing price decreases, which have coincided with the company’s increase in overall sales. Tesla cut prices in an effort to boost sales volume; as a result, they are currently down about 25% from the previous year. Price reductions have been beneficial, according to KBB’s study.
Ford has also lowered the price of its Lightning EV truck and Mustang Mach-E SUV, but overall, at least in the US, EVs are still quite pricey, which is a big worry for buyers. According to KBB, the average transaction price (ATP) of an electric vehicle was $50,683, which is still higher than gas-powered vehicles, which are still available for less than $65,000. This is a significant decrease from the $65,000 a year earlier.
This worry was highlighted by Yahoo Finance in our joint Ipsos/EV mood survey, which revealed that 70% of participants were concerned about the total cost of EVs, among other things.
Elon Musk, the CEO of Tesla, has stated that gaining market share is more essential than maintaining Tesla’s industry-best margins, which were previously above 20%. Tesla has been working to lower the cost of EVs. That being said, the industry may find it difficult to achieve a 10% EV market share, let alone 20% nationally, without more sub-$40,000 EVs like Tesla’s Model 3 and the Chevrolet Bolt.