US Electric Vehicle sales hit record highs from 2018 to 2023

The surge in EV sales over these years has been fuelled by several key factors. Notably, the introduction of new EV incentives and the expansion of the electric vehicle lineup, including price adjustments by leading manufacturers such as Tesla, have played pivotal roles. Tesla, although continuing to be the dominant player in the US EV market, saw its market share slightly decrease from 52% in 2022 to 46% in 2023. This shift indicates a broadening of the competitive landscape, with other automakers like Stellantis, Hyundai-Kia, General Motors (GM), BMW, and Volkswagen making significant inroads into the market.

The period from 2018 to 2023 has been critical for the EV industry’s growth, not just in terms of sales but also in the development of infrastructure and technological advancements. Battery technology has seen substantial improvements, with the global volume-weighted average price of battery packs declining, making EVs more financially accessible to a broader range of consumers. Additionally, the gap between gasoline and electricity costs has widened, further enhancing the economic appeal of electric vehicles. In 2023, while gas prices averaged $3.53 per gallon, the electricity cost on a per-gasoline-gallon equivalent basis was approximately $1.52, making EVs significantly cheaper to operate.

Government policies have significantly contributed to this growth trajectory. The clean car tax credit and other subsidies have been instrumental in reducing the upfront costs of EVs, making them more attractive to consumers. Furthermore, the US government’s commitment to sustainable transportation has been evident in the record-setting $303.3 billion in energy transition financing deployed in 2023, aimed at clean energy technologies, including EVs.

The increase in EV sales is part of a broader trend towards cleaner, more sustainable forms of transportation. This shift is reflected in the wider energy sector trends, with renewable energy sources contributing an increasing share to the US energy mix. The Sustainable Energy in America Factbook 2024 highlights these trends, noting the record addition of renewable power-generating capacity and advancements in energy storage, among other developments.

Looking ahead, the momentum in the EV market is expected to continue, driven by ongoing technological advancements, further cost reductions, and sustained policy support. The increasing variety of EV models, coupled with improving infrastructure, particularly charging stations, is likely to make electric vehicles an even more attractive option for American consumers. As the US moves towards a more sustainable and energy-efficient future, the growth of the EV market is set to play a crucial role in this transition, marking a new era in transportation.

Source: Sustainable Energy in America Factbook 2024 | BloombergNEF