Is the EV Market Hitting a Wall or a Speed Bump? Take this quiz to find out.

Have the good times stopped rolling for the electric vehicle industry?  A quick glance at recent news headlines suggests so.  EV sales growth slowed considerably in the first quarter of 2024.  Ford scaled back its expansion plans and even Tesla – the longtime EV market leader – laid off 10% of its global workforce.

But dig a little deeper and a brighter picture emerges.  The EV transition is still going strong, despite hitting some speed bumps along the way.  We’ve put together this five-point quiz to separate long-term trends from the current downbeat hype.

  1. EV sales growth is slowing.  

True.  But that’s the nature of most fast-growing industries as they go mainstream.  As more EVs hit the road, sales growth will continue to slow, even as EVs’ share of the new car market continues to grow.  In the U.S., for example, EV sales growth was 60% in 2022 and fell to 47% in 2023.  EV sales growth is expected to drop to 20% this year.  

But even at this slower pace of growth, virtually all cars on the road would be electric in a decade – well ahead of government targets.  The Biden administration wants EVs to make up half of U.S. auto sales by 2030, up from about 7% in 2023, and reach two-thirds of new car sales by 2032.  Due to slow turnover of the existing vehicle fleet, more than half of the cars on the road in 2032 are still expected to be gasoline-powered.

Moreover, despite all the talk of an EV slowdown, long-term market forecasts haven’t really budged.  In April, the International Energy Agency estimated that U.S. sales of fully electric vehicles will soar to 2.5 million in 2025, up from 1.1 million last year.  The IEA also predicts that most EVs will reach price parity with gasoline-powered vehicles by 2030 – even without government purchasing subsidies.

  1. Tesla is the main reason for slowing sales growth in the U.S.  

True.  Tesla, the U.S. market leader for more than a decade, has been relying on just two cars — the Model 3 sedan and the Model Y SUV — for 95% of its sales.  It repeatedly slashed prices in 2023 to maintain growth of these aging models before hitting a sales slump in the first quarter of 2024, prompting Tesla to lay off 10% of its global workforce.  

General Motors also contributed to the recent EV sales slump by suspending production of its most popular EV, the Chevy Bolt, at the beginning of this year, before its replacements were ready for sale.  Excluding sales of the Chevy Bolt and Tesla Model 3, U.S. EV sales actually grew at a respectable 23% rate in the first quarter of 2024 over a year ago levels, keeping pace with global EV sales over the same period.

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  1. Most automakers aren’t backing down on their long-term EV production goals.  

True.  Major automakers have committed more than $100 billion to develop EVs this decade.  In the short term, some are slashing prices, production and profit forecasts for their new green models.  In addition, companies like Toyota and Ford are cranking up hybrid production as an alternative to full-electric models. 

Many car companies, however, are just now reaching the threshold of mass EV production, marking a critical turning point for the auto industry.  For example, GM, Ford and Hyundai are each on track to manufacture at least 100,000 EVs in 2024.  And by the end of next year, more than 100 fully electric models will be available for sale in the U.S., according to Cars.com, an online sales platform; that’s double the number of models available last year!  

This surge in production and model choices comes just as early adopters of EVs are giving way to more discriminating customers who fuss over things like price, battery range and charging times.  At the same time, prices for new EVs are falling because of increased competition, lower raw-material costs and more efficient manufacturing methods, completing a virtuous circle of new product development.

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  1. EVs still cost more to purchase than gasoline-powered cars.   

True.  But that may not be for long.  According to automotive researcher Edmunds.com, the average manufacturer suggested retail price of a new EV sold in the U.S. was in $53,048 in the first quarter of 2024 – about $6,000 more than the MSRP of a gas-fueled car.  However, many EV models sold in this early-adopter phase of market development have skewed toward the luxury end of the car market.  

Some big automakers are just now electrifying their more affordable and biggest-selling brands after years of production delays.  This includes GM’s Equinox SUV and its sibling Blazer, which are priced under $35,000.  GM is also rolling out electric versions of its bigger Silverado and GMC Sierra pickups with up to 450 miles of driving range.

In fact, at least three manufacturers — Tesla, Hyundai-Kia and GM — now offer EVs with more than 300 miles of range for less than the cost of the average new vehicle sold in the U.S., according to an analysis by Bloomberg Green.  Most affordable is Hyundai’s 2024 Ioniq 6, which comes with 361 miles of range and a price tag that’s 25% below the national average of roughly $47,000.

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These calculations do not take into account lower fuel and maintenance costs that bolster the life-cycle case for owning electric vehicles.  Electricity is almost always cheaper per mile than gasoline, especially when charged with solar power, and battery-powered vehicles don’t require routine maintenance on things like oil changes, engine air filters and spark plugs. 

In addition, generous federal tax credits for some new electric cars, often buttressed by thousands of dollars in state incentives, are pushing purchase prices even lower, making up the difference with many gas-powered cars.  For example, the new electric version of the Chevy Equinox SUV, which comes with 319 miles of range, costs around $42,000, before federal tax credits that can knock $7,500 off that price.  When the new base model of the Equinox is introduced later this year, its after-tax purchase price will drop below $28,000.  GM also has plans to reintroduce a new version of its Chevy Bolt in 2025 that it says will be “the most affordable vehicle on the market.”

Complex rules for which cars and customers qualify for these tax credits can make it difficult for shoppers to evaluate their EV purchase options.  However, that isn’t the case for car leases, with dealers receiving the EV tax credit automatically.  Some are passing it along by wrapping the savings into monthly lease payments.

  1. The public EV charging market needs faster growth to keep up with demand. 

True.  While 80% of EV charging takes place at home, the slow buildout of public EV charging stations is a big reason why more car buyers aren’t yet willing to make the switch.  Besides the higher purchase price of EVs, polls indicate that consumer wariness has everything to do with batteries – their range, charging times, and availability away from home – especially during long trips.

Fortunately, technology is chipping away at this “range anxiety” problem.  Over the past decade, the average battery range in the U.S. increased almost 13% a year, even as battery prices have fallen dramatically.  As a result, the cost of leasing a long-range Hyundai or Tesla EV model is now as much as 37% lower than leasing similar gas-powered models.  In fact, 13 of the 15 best-selling EVs in America now come with battery options offering more than 300 miles of driving range, considered a threshold to relieve most drivers’ range anxiety. 

Better still, bigger batteries tend to charge faster than smaller batteries because they are typically made with materials that are better suited to fast charging.  Moreover, once a battery is half full, its charging rate begins to slow, so smaller batteries spend less time adding miles at their maximum charge rate.  As a result, adding 100 miles of charge to a big battery is much faster than to a smaller one.  Using fast chargers, many longer-range EVs can be topped off in 30 minutes or less, adding 100 miles of driving range in less than a quarter of the time it takes EVs with smaller batteries.

That said, the buildout of public fast-charging stations is still in its early stages.  Between April 2023 and April 2024, the number of fast chargers in the U.S. grew 36 percent.  Almost 600 public fast-charging stations were switched on in the first three months of 2024, a 7.6% increase over the end of 2023, according to a Bloomberg Green analysis of federal data.

Now, there are almost 8,200 quick-turn EV stations across the country, or one for every 15 gas stations. Tesla is responsible for slightly more than one quarter of them.  This year, Tesla is opening 2,000 of its fast-charging stations to other auto brands in the U.S., effectively doubling the availability of high-speed public charging for non-Tesla drivers.  Tesla CEO Elon Musk created a stir when he fired Tesla’s 500-person Supercharger staff as part of the company-wide layoffs announced earlier this year.  But he has since clarified that Tesla will continue to expand its Supercharger network, albeit at a slower rate, and has hired back some of the dismissed employees.

Solaflect Energy Is Your Home and Workplace EV Charging Partner

Carmakers and consumers alike are counting on better availability of public EV charging stations and more affordable home charging to sustain growth in EV demand.  Solaflect Energy is doing its part on both fronts:  

For more information about solar at home or solar EV charging at work email us at info@solaflect.com, or call (802) 649-3700.  Working together, the power is in our hands to make a difference in the solar and EV charging markets and put the brakes on climate change.

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