While dealers continue to worry about inventory issues, the domination of the electric vehicle market that Tesla has enjoyed in recent years is declining.
According to Experian’s recently released Electric Vehicles 2023 Year in Review, the Elon Musk-owned company only made up two of the top five newly registered models in 2023, compared to four of the top five a year prior as wider model availability and technology continuing to develop.
Tesla’s still make up over half of new vehicle—the Model Y top at 36.8% and Model 3 at 19.6%. The new entrants were Volkswagen ID.4 at 3.4% and Chevrolet Bolt EUV at 2.8%, replacing the Tesla Model X and S. The Ford Mustang Mach-E, at 2.9%, rounded out the top five.
EV Growth in 2023
The change of the top five comes as sales grew in 2023 as Experian noted of the 11.8 million new retail registrations in 2023, more than 8% were EVs. A year earlier, just over 6% of the 12.3 million new retail registrations were EVs.
Unsurprisingly, the growth was centered on the West Coast—particularly in California—where legislation focused on combatting climate change seeks to increase the number of EVs on the road.
According to the data reviewed by Experian, 33% of new retail EV registrations were in California—Los Angeles (170,000+), San Francisco (90,000+) and San Diego (30,000+). Outside of California, Seattle, WA, experienced the same type of growth at 35,000+.
The report found some unexpected growth areas that dealers and manufactures should be award of—especially in Deep Red political states where conventional wisdom would suggest are not markets to invest in. El Paso, TX, was the fastest growing for new retail EV registrations at 89.5% year-over-year growth average in the last five years. Savannah, GA, came in second at 81.8%, followed by Peoria-Bloomington, Illinois (76.7%), and Waco, Texas (73.7%).
Demographics of EV Buyers
Who to market is coming more in to focus as the market matures as only two generational demographics over indexed on EV purchases.
Gen Xers accounted for 32.0% of new retail registrations in 2023— but EV retail registrations outperformed with 37.7 percent over the same period.
And Millennials accounted for 24.5% of new retail registrations yet made up 30.6% of new EV retail registrations in 2023.
Off to Rough Start in 2024
But in 2024, Kelley Blue Book is reporting EV sales growth in the U.S. is slowing. In the first quarter of 2024, Americans bought 268,909 new EVs for a 7.3% share in new vehicle sales that is a decrease from Q4 2023.
KBB officials noted that while sales rose 2.6% year over year in the first quarter 2024, that fell 15.2% compared to Q4 2023. And the increase was well below the previous two years—EV sales volumes were up 46.4% year over year and 15.5% quarter over quarter in 2023 and higher by 81.2% year over year and 20.4% higher than the previous quarter in 2022.
“Electric vehicle sales in the U.S. declined during Q1 2024 – the first quarter-over-quarter downturn since Q2 2020,” noted Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive.
