Sales of electric vehicles in the US have plateaued even though sales of cars overall remain healthy – suggesting many buyers are in no mood to ditch gasoline models anytime soon.
Over the last six months, overall car sales have been higher than they were for the same months in 2022 or 2021 – when demand for EVs was still increasing.
But in 2023, EV sales during the same period have stalled at around the 100,000- a-month mark following a period of rapid growth.
The reduced demand has seen inventories stock piled, with prices of EVs slashed over the last year.
In October the average new EV went for $52,000, compared to $65,000 twelve months prior.
Sales of Electric Vehicles have stagnated at around 100,000 per month for the last six months while gasoline car sales have remained strong
Overall car sales are above the rate seen in the previous six months in 2021 and 2022 and up two percent compared to the same time last year
Gasoline vehicles however remain the most popular choice across the US, with the gas-guzzling Chevrolet Silverado top overall.
Car sales are up two per cent compared to a year ago, despite widespread industrial action in the last few months which ground many plants to a halt in recent months.
The figures have prompted many EV manufacturers to scale back their operations amid apparently waning demand.
Ford and General Motors have both delayed investments, while Tesla Chief Executive Elon Musk suggested on the company’s October earnings call that he might slow down.
The billionaire has previously blamed higher interest rates for the stagnation in the EV market, however the comparatively strong sales of vehicles overall suggests there is more at play.
The high price of EVs, which tend to cost more to produce than traditional cars, has been cited in a recent survey by S&P Global Mobility examining customer’s hesitation to purchase.
Bringing down the cost of production is tricky for manufacturers, since the raw materials needed to make metal rich batteries are pricier than traditional gasoline tanks.
Musk has already indicated that his next generation will cost $25,000 but be more ‘utilitarian’, the Wall Street Journal reports.
Several EV manufacturers including Ford and GM have paused or axed investments in the sector amid waning demand
Vehicle sales overall increased despite widespread industrial action by the United Auto Workers Union as plants like this one in Wayne, Michigan, which ground production to a halt during September and October
Ford reported that its EV unit posted a loss in earnings before interest and taxes of $1.3 billion, bringing its nine month loss to $3.1 billion.
At the end of last year, its F-150 Lightning was the best-selling electric truck in the US but recently Ford reported that sales in the third-quarter fell 46 percent year over year, to around 3,500 vehicles.
And last month, the manufacturer said it would lay off about 700 workers at the Detroit plant that manufactures its electric F-150 Lightning pickup truck, while GM pushed back production of the Chevrolet Silverado EV, citing slowing demand.
The stalling in the market comes despite a White House has pledge to make half of all car sales electric by 2030.
Although the sector could see a boost with the introduction of a federal EV tax credit of $7,5000 which will make a rebate accessible at the point of sale instead of customers having to wait until they file their taxes.
However, some experts think that the flattening in the market is due to the fact that affluent environmentalists will already have purchased an EV, leaving no room for growth.
‘There are early adopters, and the early adopters have adopted,’ said Joe McCabe, President and CEO of automotive consultancy.
He suggested that those adopters tended to be richer city-dwellers, sometimes dubbed ‘urban cowboys’.
