Electric vehicle sales in the United States just hit a new record. Over 45,000 EVs were sold in the third quarter of 2016, up more than 60 percent from the same time a year ago. This new high comes despite continued lower-than-average oil prices, a factor often cited as hampering EV sales. Sales of EVs are growing despite the spotty availability of EV models across most of the country and uneven effort from manufacturers in bringing EVs to market.
EV sales hit a new high
September 2016 also set a record for US EV sales in a single month, with almost 17,000 sold.
Some of the increase in volume came from established EV makers like Tesla and General Motors. The second generation of GM’s Chevrolet Volt was released late last year and only became widely available in March of this year. The plug-in hybrid now has over 50 miles of electric range to go with its backup gasoline engine, meaning many drivers can do all of their normal daily driving purely on electricity. GM is selling well over 2000 Volts a month nationwide.
Tesla’s all-electric vehicles, the Model S and Model X, are also pushing sales numbers, with the Model S often the monthly sales leader for EVs in the U.S.
Quarterly sales in 2016 have been higher than any previous year. Q3 2016 EV sales increased over 50% compared to the same quarter in 2015. Data Source: InsideEVs.com
Newer EV makers like BMW are also pushing the market forward. Notably, BMW is now selling more of its new X5 plug-in SUV than its more well-known i3 electric car.
Gasoline prices a factor, but EVs still sell with lower oil prices
High gasoline prices certainly focus more attention on fuel-efficient vehicles and alternatives like electric cars. So lower gasoline prices do take some of the spotlight off of EVs, despite their lower operating costs compared to their gasoline counterparts.
However, as we’ve seen in the last few years, EVs still sell when oil prices are low. Why is this the case? First, many buyers are looking for cars that are technologically advanced, and it’s hard to beat EVs on that score. EVs also have performance advantages, particularly in great acceleration. Finally, even if gasoline prices are low, for most buyers refueling on electricity will still save money, be more predictable, and be more convenient than going to a gasoline station.
EV sales continue to rise, even as gasoline prices decline. Data Sources: InsideEVs.com and EIA
Sales would be even higher if EVs were available everywhere
EV sales are also growing despite the lack of availability of EVs in some parts of the country. Some EVs are available in all 50 states; however, many are only sold in California or the 9 other states that have adopted California’s Zero Emission Vehicle (ZEV) regulation, as the map below shows. Models like the Fiat 500e, Chevrolet Spark EV, and VW e-Golf have had over 75% of their sales within California and the other ZEV states.
Despite limited availability, 10 models had in aggregate over 1,800 sales in the last quarter (these include the BMW 330e; Chevrolet Spark EV; Fiat 500e; Ford Focus Electric; Hyundai Sonata PHEV; Mercedes B250e; Mercedes GLE 550e; Mercedes S550H PHEV; Smart fortwo ED; and the VW e-Golf). If they were on sale in all states, total EV sales would be even higher.
Another issue that has impacted the EV market in prior years is the limited number of EV models offered by carmakers. Having a small number of EV models meant that interruptions in supply of one car, such as the changeover from the first generation Volt to the second generation model, had a noticeable impact on the sales from the entire EV market. A low number of models also meant less product diversity, with many of the EVs offered in the small car segment.
Both of these issues should become less of an issue as the EV market matures. Increased numbers of EV models will make the market as a whole less sensitive to individual model factors and also should provide more type of vehicles. We are already seeing this effect with the introduction of larger cars like the Ford Fusion and Hyundai Sonata PHEVs and both battery electric (Tesla Model X) and plug-in hybrid SUVs (such as the BMW X5 and Volvo XC90).
Next year likely to be even better for EVs
The next year is likely to see even higher sales of electric vehicles as more models hit dealer lots. Chevrolet’s new Bolt, an all-electric car with over 200 miles of range, should see significant interest, as GM reported that the range announcement alone had over 20 million views online[1]. Other models will also help drive EVs forward next year. The new version of the Plug-in Prius, the Prius Prime, will be available soon and recent pricing announcements appear to put the new plug-in hybrid at cost parity with the existing Prius models, after the federal tax credit. This is particularly significant, as the Prius Prime marks the first time in a over a year that Toyota will offer a plug-in electric vehicle.
Other models coming on sale include the Ioniq line from Hyundai (available in both plug-in hybrid and battery electric versions) and the first plug-in minivan, the Chrysler Pacifica. And of course, the much-anticipated Tesla Model 3 is expected at the end of next year.
All of these new models will be a welcome addition to the market, giving car buyers more choices. And since we found that well over half of car buyers in California and the Northeast are willing to consider an electric vehicle for their next car, it’s good news that they will have even more options in the future. This market has the potential for even greater growth as long as automakers make the effort to meet increasing demand.
[1] Britta Gross, General Motors. September 27, 2016. California Air Resources Board Advanced Clean Car Symposium. Diamond Bar, CA.