Bloomberg published a story yesterday arguing that the death of the electric vehicle has been overhyped a bit recently. It's true that Tesla, which is far and away the market leader, has seen a slump in sales so far this year, but several other carmakers are starting to see big gains in EV sales.
After an underwhelming start to the year for US electric-vehicle sales, it might seem easy to conclude that the boom times are over. Sales were flat in the first quarter, Ford dramatically scaled back expansion plans and Tesla laid off 10% of its global workforce. But these dismal indicators only tell part of the story.
For every sign of an EV slowdown, another suggests an adolescent industry on the verge of its next growth spurt. In fact, for most automakers, even the first quarter was a blockbuster. Six of the 10 biggest EV makers in the US saw sales grow at a scorching pace compared to a year ago — up anywhere from 56% at Hyundai-Kia to 86% at Ford. A sampling of April sales similarly came in hot...
“We’re still seeing growth in demand, just not at the same pace for every brand,” Valdez-Streaty said. “Right now Tesla doesn’t have new models, Ford doesn’t have a lot in the pipeline. But Hyundai, BMW, Kia, Cadillac — they’re really moving the needle forward.”
Basically, there are two companies that have had a bad start to 2024, Tesla and GM. GM's problems aren't much of a mystery. They had a hit EV in the low price Bolt and then decided to cancel it with nothing to replace it.
Tesla's problems aren't as clear. They did shut down factories last quarter to upgrade the Model 3 line and they had an arson attack at their plant in Germany, but personally I'm still wondering if their slowdown isn't at least partly political. With the exception of Donald Trump, there is probably no one who is as hated on the left as Elon Musk. I support his right to speak freely of course but if you give a bunch of censorious people a reason to hate you, you can't be shocked when they stop buying your products. But if you set aside Tesla and GM, other manufacturers are having a good year with EV sales.
Excluding those two models, US EV sales in the first quarter grew a respectable 23% over a year ago, matching pace with global EV sales for the same period.
Take Kia as an example. Globally, their sales have been flat this year but EV sales have nearly doubled.
Despite relatively flat overall sales, Kia's all-electric car sales continued to increase very quickly...
According to Kia, its retail all-electric car sales amounted to 17,140 units in April. This is up 90% from a year ago (estimated, as not all data for 2023 are available). The share of EVs in the brand's total volume almost reached 7%.
Forbes published an article about EV sales last week which noted that sales are still climbing in the world's three biggest car markets, just not quite as quickly as last year.
Recent news reports have advertised a decline in sales to herald the end of the EV revolution, but the actual numbers couldn’t be further from those vibes-based headlines in the world’s three biggest auto markets.
This year EV sales in China, the world’s biggest auto market, are projected to hit 10 million vehicles, roughly 45% of all car sales in that country. In the United States, the world’s second largest auto market, EV sales are forecast to rise 20% compared to 2023, hitting roughly 11% of all new car sales. And in Europe, the world’s third largest auto market, EV sales could rise 10%, composing 25% of total sales.
This chart is based on data collected by the International Energy Agency in Paris. It shows global EV sales since Q1 of 2021. The orange color represents China, the blue is the EU and the green is the US.
As you can see, a bit of a downturn in Q1 seems to be the norm. That doesn't mean total EV sales won't be up again this year or next year. The IEA's prediction is that by 2030 EVs will be about 20% of all the cars on the road in the US and Europe (and more in China).
Whether Tesla can recover from the current slump remains to be seen. The company is revealing its robotaxi plans in August and just released a new performance variant of the Model 3 which looks like an amazing car for the money. Time will tell if that's enough to help them rebound.
