According to data from BloombergNEF, US EV sales have surpassed 1 million in 2023. This makes 2023 the first year in history when EV sales have crossed the 1 million milestone.

Gabe Klein, the executive director of the US Joint Office of Energy and Transportation, noted the achievement in a post on LinkedIn. Just over 1 million all-electric cars were sold between January and November 2023. When one includes plug-in hybrids, the sales total rises to approximately 1.2 million.

EV sales

The Omaha World-Herald reports that EVs are expected to account for 9% of the US auto market in 2023, an all-time record. The corresponding figure in 2022 was 7.3%.

Despite these notable advancements in electrification, the United States lags behind countries like China, Germany, and Norway. EVs account for 33%, 35%, and 90% of car sales in these nations, respectively. (These statistics include both all-electric cars and plug-in hybrid EVs.)

While several factors have contributed to the increase in EV adoption in the US this year, the primary driver has been the decrease in prices.

Tesla, the market leader in EVs, has reduced prices for its popular vehicles multiple times throughout the year, putting pressure on other automakers to follow suit. Furthermore, car companies are offering greater incentives on their electric models, and dealerships are providing deeper discounts as they accumulate more EV inventory.

Legislation like the Inflation Reduction Act has also played a significant role in reducing the cost of EVs for buyers. The act increased tax credits for qualifying new and used EV purchases by $3,750 to $7,500, depending on specific requirements.

Additionally, the cost of EV batteries is decreasing due to the declining prices of critical battery materials like lithium. EV batteries make up approximately 30% of an EV’s overall cost.

According to USA Today, average EV prices fell over 20% between September 2022 and September 2023. Average prices dropped from $65,295 to $50,683.

The sales data suggests that recent media headlines about the EV transition stalling are highly misleading. US EV sales have grown 50% year-over-year in 2023, the second consecutive year of such growth.

Nevertheless, some challenges remain. The Biden administration recently restricted EV tax credit eligibility in an effort to reduce trade with China. In addition, automakers like Ford and GM are lowering their EV production targets.

Image Source: Gabe Klein