Have electric vehicles been overhyped? A casual observer might have come to that conclusion after almost a year of stories in the media about EVs languishing on lots and letters to the White House asking for a national electrification mandate to be watered down or rolled back. EVs were even a pain point during last year's auto worker industrial action. But a look at the sales data paints a different picture, one where Tesla's outsize role in the market has had a distorting effect.
"EVs are the future. Our numbers bear that out. Current challenges will be overcome by the industry and government, and EVs will regain momentum and will ultimately dominate the automotive market," said Martin Cardell, head of global mobility solutions at consultancy firm EY.
Public perception hasn't been helped by recent memories of supply shortages and pandemic price gouging, but the chorus of concerns about EV sales became noticeably louder toward the end of last year and the beginning of 2024. EV sales in 2023 grew by 47 percent year on year, but the first three months of this year failed to show such massive growth. In fact, sales in Q1 2024 were up only 2.6 percent over the same period in 2023.
Tesla doesn't break out its sales data by region anymore, but its new US registrations were down by as much as 25 percent, month on month, as its overall marketshare of EVs closes in on 50 percent this year; by contrast, Tesla was 80 percent of the US EV market in 2020. (Overall, Tesla's global deliveries fell by 8.5 percent.)
The other sick patient in addition to Tesla is Volkswagen. Despite local production of the ID.4 crossover in Chattanooga, Tennessee, the brand saw EV sales fall by 37 percent in Q1. It has also abandoned plans to bring the ID.7 electric sedan to North America, and the long-awaited ID. Buzz microbus has yet to reach US showrooms more than eight years after it was first shown here.
But all this noise has been enough to spook executives into action. Both Ford and General Motors took the embarrassing step of rolling back their electrification goals, all but admitting they bet on the wrong horse. Instead of turning away from new internal combustion engine products, we're set for a new flurry of hybrids—just don't expect any of them to show up before 2026.
BEVs would be a heck of a lot closer to profitability if we didn't try to emulate Tesla's rule-breaking at the same time. All the "legacy" OEMs seem to be doing this.