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Sales of electric vehicles to hit a record high this year in the US

28 November 2023

Electric vehicle (EV) sales in the U.S. are expected to account for 9 percent of all passenger vehicles this year, a record high, according to research firm Atlas Public Policy.

In 2022, electric vehicle sales in the United States accounted for 7.3% of all passenger vehicles.

It will be the first time that more than one million electric vehicles will be sold on the American market in a calendar year, probably reaching 1.3 – 1.4 million units, predicts Atlas Public Policy.

While this is significant progress, the United States still lags behind other countries—such as China, Germany, and Norway—in EV success.

In the first six months of this year, electric vehicles accounted for 33% of sales in China, 35% in Germany and 90% in Norway, according to BloombergNEF EV data. The figures include both battery-powered vehicles and plug-in hybrids.

In China, Germany and Norway, governments have set ambitious targets for reducing greenhouse gas emissions and provided subsidies for electric vehicle purchases in the US, falling prices have boosted EV sales.

Tesla, the current EV market leader, has cut the prices of its models several times this year, which has forced other automakers to follow suit. Also, car companies are now offering higher subsidies for their electric models.

The American investment program (Inflation Reduction Act, IRA), a package of 369 billion dollars, provides for the distribution of subsidies for green industries, such as the manufacture of batteries for electric vehicles or the production of solar panels. Depending on certain requirements, the American subsidy program helped reduce EV costs between $3,750 and $7,500. And the costs of batteries for EVs decreased, in the context of the decline in the prices of some raw materials, such as lithium, according to Agerpres.

But for many consumers, unreliable and inaccessible public EV charging infrastructure remains a barrier, according to BloombergNEF. In October, an electric car still cost an average of $3,826 more than a new car, coming in at $51,762, compared to $47,936, Kelley Blue Book estimates show.

And analysts from Goldman Sachs expect that by 2025 battery prices for electric vehicles will drop by 40%.

The auto industry is also affected by fears of a slowdown in the EV market. Some automakers, including Ford and General Motors, have scaled back their electrification targets. But at the same time, many foreign car companies are expanding their plans.

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