Electric vehicles from startups and traditional automakers alike were popular last year, and while the products appear to still be growing, a new data set shows that the market may be cooling for some EV brands. Notably, however, Tesla remained the dominant EV leader in the first five months of the year, driving around half of the market’s registration growth.
|A Tesla Model Y (Image: Casey Murphy / EVANNEX).|
Registration data from Experian shows that the EV market is slowing down for some of last year’s best-sellers, including vehicles from Ford, Kia and Lucid, as Automotive News reports. Although EV registrations reached 447,517 between January and May for an increase of about 68 percent, roughly half of that surge came from Tesla purchases.
One example of slowed growth came from a top performer in 2022, the Ford Mustang Mach-E. The Mach-E is considered a competitor to the Tesla Model Y, both of which fall within the electric SUV segment. In 2022, Mach-E registrations increased by about 50 percent from the prior year, for a total of 38,469. Between January and May 2023, however, Mach-E sales slid by 29 percent for just 10,948 units.
The Mustang Mach-E’s drop this year came amidst sweeping price reductions from Tesla, which included the Model Y. Crucially, all available trims of the Tesla Model Y are eligible for the $7,500 federal tax credit, while the Mach-E only qualifies for the reduced amount of $3,750. Still, individual buyers may also be affected by other credit eligibility constraints such as income limits.
In a report last week, Cox Automotive predicted continued growth for the EV sector, but at a slower rate. The group also noted that EV inventories had reached a roughly 100-day supply ending June, which is around two times the industry average across fuel types.
“EV sales records will continue to be set and EV growth will continue to outpace overall industry growth, but the days of 75 percent year-over-year growth are in the rearview mirror,” Cox said in the report. “The hard-growth days are ahead.”
Despite the hard-growth days being ahead, the outlet also shared some optimism, reporting that as many as “53 percent of consumers agreed that EVs will eventually replace traditional ICE-powered vehicles.” Dealerships, however, may not be quite as convinced.
“Dealers were more cautious, with only 31% agreeing on an all-EV future,” the group writes. “Dealers have a front-row seat to the many challenges ahead. And many dealers, recently, have been watching EV inventory building.”
Additionally, competition from other OEMs will continue to eat away at Tesla’s market share. But for now, it’s still dominating the EV market, as led by the Model Y.
“One of every three EVs sold last quarter was a Tesla Model Y. Add in the similar-sized Model 3, and those two products are half the electric vehicle business.”
Article from EVANNEX. By Peter McGuthrie.
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