USA electric vehicles, a market in the making
Although the sale of electric vehicles (EV) in the United States has been increasing exponentially over the past few years, its meager market share shows that there is a high mountain to climb if these trailblazers really want to make waves in the country.
In 2018, approximately 208,000 new registrations for EVs were reported in the U.S., more than double the previous year. However, with the slew of internal combustion engine (ICE) vehicles available in the country, EVs only represent about 2% of the market today.
The state of California is leading the pack in terms of EV sales (source: JATO)
As we can see, demand is on the rise but who is actually buying these cars?
While Generation X and Millennials (aged 23-53) are buying approximately 75% of full-electric vehicles in the country, Baby Boomers (aged 54-72) are acquiring the largest number of "green" vehicles, according to online car marketer TrueCar, explaining that the latter includes full-electric, hybrid, plug-in hybrid, and fuel cell vehicles.
As the purchasing of these types of vehicles are highly related to income levels, Baby Boomers have a natural advantage. However, according to TruCar Director of Insights Cari Crane, affluent Millennials are starting to catch up.
“Millennials with an annual income of $70,000 or higher purchase EVs at a rate four times that of those who make less than $70,000,” says Crane.
The lingering concern for Millennials considering an EV is the question of where to recharge cars. Although a considerable number of them live in urban areas (approx. 37%), many smaller apartment buildings don’t offer recharging infrastructure.
Having a recharger in homes, however, is growing in popularity while the private sector is helping with the improvement of infrastructure in public areas, one being power electronics engineering company Tritium.
The EV market is growing quickly across the Americas as the electrification of transportation moves forward. Besides being pushed by state legislators and regulators, major cities are creating programs, incentives, and market pull, according to Tritium president of the Americas region Jeff Wolfe.
Jeff Wolfe (source: Tritium)
“An influx of new vehicle models will be available within 18 months, increasing consumer choice and appeal, We should see lower cost personal EVs and more capable trucks and buses emerging,” the executive told Global Fleet.
“All of these factors will combine to make the switch from gasoline-fueled vehicles economically viable for most organizations and consumers,” he added.
Although a tax break on EVs currently exist, there are uncertainties as to the future of incentives. For instance, Tesla and General Motors have both sold their first 200,000 full-electric and/or plug-in hybrid (PHEV) vehicles, triggering the phase out of the $2,500 - $7,500 federal tax credit to consumers for vehicles from those manufacturers.
It is also expected that many of the major OEMs will be hitting the 200,000 limit soon.
The consensus in Congress has been mixed. Some government officials are calling for an end to the tax credit, while others are pushing for the 200,000 cap to be lifted and revised.
Meanwhile, many state and municipal governments are also offering incentives to EV buyers, seeking to make the vehicle incentive landscape a true patchwork throughout the country.
Brands & Models
At the end of 2018, only about 15 EV models were being offered in the United States, but this number should grow considerably in the years to come.
In 1Q19, the best-selling full-electric vehicles in the country were the Tesla Model 3, Chevrolet Bolt, Tesla Model X, Tesla Model S and the Nissan Leaf. Other vehicles coming to the market are the Kia Niro, Hyundai Kona, and the new pickup and SUV models from startup Rivian.
Tesla Model 3 (source: Shutterstock)
As for those not ready for an all-electric car, models such as the Toyota Prius, Ford Fusion, and Honda Clarity could be an option.
Finally, in terms of future sales in the U.S., more than 350,000 new EVs are expected to be sold in 2020 and more than 1.1 million by 2025 (reaching 7% market share), according to global information provider IHS Markit.
So Millinnials, keep your eye out for the new vehicles coming to the market and let’s hope that prices drop with the change in economies of scale!
Join Global Fleet in Miami June 4-6 for networking and talks about vehicle fleet and mobility in the United States and other countries, during Global Fleet Conference 2019.