The United States has overtaken Germany to become the world’s second-largest electric vehicle (EV) market, following China, thanks to a significant surge in EV sales driven by tax credits, according to research conducted by Counterpoint Technology Market Research.
During the first quarter of 2023, U.S. passenger EV sales experienced a remarkable year-on-year increase of over 79%, propelling the country to its newfound position. Battery EVs (BEV) dominated the market, accounting for 81% of all passenger EV sales, while plug-in hybrid EVs (PHEVs) made up the remaining portion.
Among the automakers, Tesla emerged as the clear frontrunner in the BEV market, surpassing the combined sales of the next 18 automotive groups. Holding an impressive 63% market share in BEV sales, Tesla outperformed its competitors, with GM coming in a distant second with a 7.6% share. The best-selling BEV models in the U.S. were the Tesla Model Y, followed by the Tesla Model 3, Chevrolet Bolt EUV, Volkswagen ID.4, and Chevrolet Bolt, according to Counterpoint’s research.
The availability of EV tax credits has played a pivotal role in driving the surge in EV sales this year, while sales of conventional passenger vehicles have remained stagnant. Currently, approximately 20 models offered by Tesla, GM, Ford, Stellantis, Rivian, and Volkswagen qualify for the tax credit.
Experts at Counterpoint anticipate further growth in the U.S. EV market, contingent upon improving economic conditions. Research Director Jeff Fieldhack stated that tax credits for new and used EVs, coupled with investments in streamlining the EV battery supply chain, the establishment of a robust network of EV charging stations, and the nationwide setup of battery recycling plants, will contribute to the continued expansion of EV sales. Should the economic landscape improve, Counterpoint analysts project that U.S. EV sales could reach approximately 1.5 million units in 2023.
According to the International Energy Agency (IEA), EVs are expected to account for nearly one-fifth of global car sales in 2023, highlighting the growing significance of the EV market worldwide.
As the U.S. solidifies its position as the second-largest EV market globally, it is evident that the combination of tax incentives and supportive infrastructure development is propelling the nation towards a sustainable and electrified transportation future.