EV sales demand rebounds after soft start to 2024

Electric vehicle sales had a bumpy start to 2024, but demand started to correct course during this year's second quarter. Most automakers — even struggling EV pioneer Tesla — saw EV sales pick up speed by the end of June, according to data from Cox Automotive. While Tesla's sales are still down from last year, other vehicle brands are picking up the slack and gaining influence by attracting more customers to their gasoline-free cars. New plug-in vehicle sales increased more than 11 percent year-over-year during the second quarter, reaching a record-setting 330,463 units in the U.S., the data shows. Sales during the months of April through June were also 23 percent higher than this year's soft first quarter. It's a rebound following several months of industry concern that not enough Americans are ready to switch to EVs despite billions of dollars of private and public investment. "EV sales exceeded expectations during a record-breaking quarter," Stephanie Valdez-Streaty, director of operations management at Cox Automotive, said in a news release. "Despite Tesla's declining sales... the overall competitive landscape for electric vehicles is intensifying." Tesla rocketed to become the world's most valuable automaker by establishing a stranglehold on the EV market, but that grip is losing strength. The automaker saw its sales decline 6.3 percent year-over-year, and its market share for new EV sales fell below 50 percent for the first time in the U.S. during the second quarter, falling to 49.7 percent, according to Cox Automotive. Tesla has slowly shed its market share as other automakers bolster their fleets of EVs, introducing both luxury and cheaper alternatives, Valdez-Streaty said. She said that increased competition is a benefit for consumers because it should help push sticker prices down and provide more options for those considering the switch to electric. Partly due to Tesla CEO Elon Musk's controversies, the company's sales have lagged in 2024, but its second quarter sales outperformed Wall Street forecasts, resulting in a slight bump to its stock price. "In a nutshell, the worst is in the rearview mirror for Tesla," Wedbush Securities analyst Dan Ives wrote in a note to investors. "It appears better days are now ahead as the growth story returns." Chevrolet and Mercedes-Benz also saw their EV brands lose sales momentum during the second quarter, but their declines were overcome by sharp increases for Cadillac, Kia and Toyota — all of which saw their year-over-year sales at least double if not quadruple. EV sales accounted for roughly 8 percent of all new-vehicle sales during the second quarter, which is expected to steadily increase throughout the coming financial quarters. Ivan Drury, director of insights at Edmunds.com, told The Associated Press that interest rates for new vehicles are averaging just above 7 percent, presenting a steep barrier for potential car buyers. EVs are more expensive on average than gas-powered vehicles, but that gap is narrowing. Automakers are rushing to release lower-priced models in popular configurations, such as crossover SUVs. Vehicles assembled in the U.S. also qualify for federal incentives to lower sticker prices. "The stuff that's very affordable, that's where it's at," said Drury. "You really have to have an attractive product at an attractive price for it to move today." Since 2018, the Peach State has announced 53 EV- and battery-related projects with a promised $27.3 billion in combined investment. This includes multiple multi-billion manufacturing facilities alongside dozens of parts suppliers. Cox Automotive predicts EVs will make up 10 percent of all new vehicle sales by the end of 2024, up from 7.6 percent last year. "We remain bullish on electric vehicle sales in the long term," Valdez-Streaty said. "The growth will, at times, be very slow, as all-time horizons in the automobile business are vast, but the long-term trajectory suggests that higher volumes of EVs will continue over time."