US electric vehicle (EV) sales are up 45% for the twelve-month period from July 2016 through June 2017, compared to the prior twelve-month period. What does that mean for the future?
As I’ve noted previously, the US EV market saw 32% annual growth over 2012-2016. This rate would, if continued, result in EVs being 10% of all new car sales in 2025.
For perspective on this target: according to UCS analysis, California’s Zero-Emission Vehicle (ZEV) program would result in about 8% of California’s vehicles being zero-emissions (mostly electric) by 2025. California leads the nation in EV market penetration by quite a bit. According to the International Council on Clean Transportation, nearly 4% of California’s light-duty vehicle sales in 2016 were EVs, compared to less than 1% for the country as a whole. And this was without major automakers Honda and Toyota offering a plug-in vehicle in that year. Sixteen cities in the state already see EVs exceeding 10% of vehicle sales.
California has achieved this through a mixture of policy, infrastructure, consumer awareness and interest (although the Northeast is not far behind on that count), and automaker efforts. Seen in that light, the entire country reaching 10% EV sales in 2025 would be pretty good.
But what if the market were actually hitting a “tipping point” such that this recent growth could continue? If a 40% growth rate could be sustained for the next six years, then we would see EVs reach 10% of US vehicle sales in 2023, and possibly near 20% by 2025. Cost reductions from technology improvements and economies of scale would help sustain the growth rates, as well as expanded charging infrastructure.
What are people buying?
The Tesla Model S was the top seller both in June and year-to-date. This is an all-electric vehicle with a range of 249-335 miles, depending on the configuration (the 60 kWh versions, with ranges of 210-218 miles, were recently discontinued).
Figure 1: Tesla Model S. Source: tesla.com.
Plug-in hybrids are proving quite popular, as the #2 vehicle year-to-date is the Chevy Volt, and the #3 is the Prius Prime.
Figure 2: Chevy Volt. Source: chevrolet.com.
The Volt, with a 53-mile all-electric range in the 2017 model, is a well-established mainstay by the standards of this young market. It has been a consistent top seller since its introduction in December 2010.
Figure 3: Toyota Prius Prime. Source: toyota.com.
The Prius Prime is a new market entrant that was the May sales champion. It has a 25-mile electric-only range, so it could likely do most daily driving in all-electric mode if workplace charging were available (even a standard wall outlet would replenish the battery in 8 hours). Plug-in hybrids have a gasoline engine if needed for longer drives, but I’ve heard that drivers of these vehicles tend to keep their batteries topped off to do as much driving in electric mode as possible. If you don’t yet drive an EV, you might not realize the extent of the existing charging infrastructure, but it’s out there; Plugshare is a great resource.
Tesla’s Model X crossover SUV is the #4 vehicle year-to-date, while Chevy’s new all-electric Bolt, with its 238-mile range, rounds out the top 5 (the Nissan LEAF is just behind the Bolt). The top five models make up just over half the market, with a long list of other products also selling in the United States.
What’s missing?
Given the market strength of the newcomer Prius Prime, what other new vehicles might take a turn at the top of the sales charts in the months ahead?
Well, there are a number of other new models from Kia, Chrysler, Cadillac, Volkswagen, and others. Certainly, the Tesla Model 3, with its first vehicles shipped in July, looks to be a contender. There are over 400,000 reservations for the vehicles worldwide, so it could easily become the sales champion if Tesla can ramp up production quickly enough. But in years to come, we might see something very different.
There is one category notably lacking among US EVs sales: the pickup truck. The best-selling light-duty vehicle in the US has for 35 years been the Ford F-series, with 820,799 units sold in 2016 (this is more than double the sales of the top-selling car in 2016, the Toyota Camry).
Figure 4: Ford F-150. Source: ford.com.
Some companies perform aftermarket conversions to turn trucks into plug-in hybrids, and others have announced plans to build brand-new electric pickup trucks (such as Tesla, Via, Havelaar, and Workhorse). Trucks have a wide range of needs and duty cycles, and not all applications would be suited to electrification at present. There are definitely engineering challenges to resolve.
Still, a plug-in version of the F-150 could serve the needs of many owners, and could propel Ford to the top of the EV sales charts. This is not in Ford’s plans at the moment (although a basic hybrid F-150 is), but what if the company experiences positive results from its other electric and plug-in products? Might we see an electric F-150? Or would the Chevy Silverado or Dodge Ram (the #2 and #3 selling vehicles in 2016) have plug-in versions first?
The pickup truck market is too big to ignore. As battery technology continues to improve, it should become easier to make electrification work for at least part of this segment.
What’s next?
Typically, the second half of the year sees higher sales volume, with December being the biggest month. It should be particularly interesting to watch the growth of Tesla’s Model 3 production over the next six months. News items such as the new study from Bloomberg, Volkswagen’s investments in charging infrastructure, and other developments may heighten public interest in EVs generally.
The most effective means of raising consumer awareness of and interest in EVs are ride-and-drive events. If you haven’t tried one out yet, look for an event near you during Drive Electric Week!
Edited 7/24/2017: It’s always nice to see our work recognized and picked up by other outlets. However, some stories have discussed this blog post in a way that does not quite reflect my meaning. This isn’t a forecast or a prediction of what will happen. It is a hypothetical scenario of what could happen if the right conditions are in place. For EVs to make up 20% of vehicle sales in 2025, we’ll need to see roughly the same market growth as we have over the past year. So what conditions would make that happen? It will require manufacturer and dealership involvement, continued cost reductions, offerings in more vehicle classes, expanded charging infrastructure (as Tesla is doing), increased consumer awareness, and incentives that properly value the vehicles’ reduced pollution and potential grid benefits.