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Electric Vehicle Market Share Plummets In First Quarter As Consumers Sour

Photo by Ralph Hutter / Unsplash

By Will Kessler, The Daily Caller News Foundation | April 3, 2024

Growth in sales for electric vehicles (EV) slowed in the first quarter of the year as consumers remained wary of the product even though growth in sales of new vehicles remained strong, leading to a drop in EV market share, according to The Associated Press.

Sales for new vehicles grew 5% in the first three months of the year, but EV sales grew only 2.7% as more consumers chose traditional vehicles due to cost and product concerns, according to the AP. The average sales price declined 3.6% year-over-year to $44,186 in March as dealers looked to offload built-up inventory.

The slow EV sale growth in the first quarter was well below growth rates in 2023, which totaled 47% for the whole year, leading to around a 7.6% market share for EVs by the end of December, according to the AP. Due to the slowdown in the quarter, EV market share fell to 7.1%.

Sales in the quarter were led by cheaper vehicles as high interest rates and other expenses weighed on consumers, with sales of larger SUVs declining, according to the AP.

Both Rivian and Tesla, which exclusively make EVs, failed to meet production estimates in the first quarter due to the slowing of EV demand. The world’s biggest EV maker, Tesla, reported that their sales were down 20.2% from the previous quarter and 8.5% from a year ago.

Several auto manufacturers have had to back off previously made EV goals in the past year due to slowing demand and high costs, including Bentley, GM, Ford, Mercedes-Benz and Honda.

One reason consumers are apprehensive about adopting EVs is due to concerns about the vehicles’ range, which is often shorter than traditional vehicles due to battery restrictions. U.S. EV charger infrastructure also remains poor despite the Biden administration’s attempt to expand access, leading to possible gaps in charger access around the country.

The Biden administration has tried to incentivize a transition to EVs, putting in place strict restrictions that would effectively require 67% of all light-duty vehicles sold after 2032 to be electric or hybrid. The president has also created a $7,500 tax credit for EVs to lower the costs for consumers.

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