The US is now the second-largest EV market behind China
Tax credits helped foster a surge in American EV demand.
The US has routinely lagged behind Europe and other regions in terms of EV adoption, but no longer. Counterpoint estimates that American EV sales jumped 79 percent year-over-year in the first quarter of 2023, helping it move past Germany to become the world's second-largest electric car market. Only China is larger, the analyst group says.
EV tax credits are believed to have played a "crucial role" in spurring sales, and may have helped the US automotive industry as a whole. Where sales of combustion engine cars were flat, EVs surged ahead, according to Counterpoint.
It won't surprise you to hear which brands are out front. Tesla represented 62.7 percent of EV sales in the quarter, with the Model Y and Model 3 taking the top two spots. GM was a distant second, with the Bolt EUV and regular Bolt taking it to 7.6 percent. Volkswagen had 6.3 percent of the market thanks to the ID.4. Plug-in hybrids are a different story — Stellantis has nearly 43.9 percent courtesy of Jeep's PHEV Wrangler and Grand Cherokee models as well as the Chrysler Pacifica minivan. BMW was next at 16.1 percent with the X5, and Toyota's RAV4 helped push it to 15.4 percent.
Counterpoint is optimistic about American EV sales going forward. While revised rules narrowed the list of cars that qualify for tax credits, they're still poised to influence demand. The early stages of economic recovery could also help drive interest. We'd add that increasing domestic production of some EVs, such as the VW ID.4 and future Hyundai models, should expand the range of cars eligible for credits.
EV sales were poised to spike at some point. States like California and New York will require that all new passenger car sales are electrified by 2035, and makes like GM have already committed to going all-electric around the same time. If this analysis is accurate, though, that accelerating growth is already underway.
