Electric car sales growth slows by nearly 50% in 2023

01/16/2024 / By Arsenio Toledo

Global sales of fully electric and plug-in hybrid vehicles slowed down by nearly 50 percent in 2023 compared to sales figures from 2022. In the United States, sales could have dropped lower if not for taxpayer-funded government incentives artificially boosting sales.

This is according to the EV and battery market analysis firm Rho Motion, which found that EV and PHEV sales in 2023 rose by only 31 percent, down from the 60 percent growth these same car categories posted in 2022.

But Rho Motion and other industry insiders claim that this is all a normal part of the life cycle of a burgeoning industry. Charles Lester, a data manager for Rho Motion, noted: “You can’t double every year.”

“The pace of growth is slowing, but that’s what’s expected in growing markets like this,” he added, noting that global EV sales last year were largely in line with Rho Motion’s forecast of 30 percent annual growth. (Related: Nearly 4,000 car dealers urge Biden to abandon “unrealistic” electric vehicle agenda amid plummeting sales.)

To prove his point, Lester noted that in December, global EV sales hit a monthly record of 1.5 million units, with fully electric or battery electric vehicles accounting for 9.5 million out of the 13.6 million electrics sold around the world in 2023, with PHEVs accounting for the rest.

Rho Motion also noted that sales of battery EVS rose by 50 percent in the United States and Canada, 27 percent in Europe and 15 percent in China.

Reuters Global Editor for Mobility Nick Carey wrote that part of the slowdown in sales can be attributed to consumers in Europe and elsewhere biding their time for smaller and cheaper models to appear, with car companies expected to release these kinds of long-awaited models in the next two or three years.

For 2024, Rho Motion forecasts global EV sales to grow by between 25 to 30 percent. Market research firm Canalysis predicts a more moderate 27.1 percent growth in the EV market, with the slowdown being attributed to reduction in state subsidies making EVs less appealing to buyers.

“Five years ago we did not have the arrays of EVs we have now. They account for 10 percent of the market now,” claimed John Voelcker, a contributing editor for Car and Driver. “The growth rate may flatten … but the cost of EVs will continue to come down.”

Federal subsidies and tax credits artificially lowering the price of EVs to attract more sales

To counter rapidly diminishing demand for EVs, car companies are slashing their prices massively, led by the U.S.’s largest EV-centric car company Tesla.

Back in November, dealers around the country increased the discounts they were providing for EVs, with the digital marketing firm Cox Automotive noting that the average transaction price (ATP) for EVs dropped by nearly nine percent. Government- and privately-funded incentives totaled less than two percent of ATP just one year ago.

Now, consumers can purchase new models like the Chevy Blazer EV, the Kia EV9 and the Volvo EX30 with subsidies and tax incentives and are being convinced of the low prices to permanently ditch their gasoline- and diesel-powered cars.

EV tax breaks passed by the administration of President Joe Biden under the Inflation Reduction Act provide full and partial federal tax credits of $7,500 and $3,750, respectively. Individuals who make over $150,000 and couples who bring in $300,000 annually do not qualify for these tax credits – which are also only limited to sedan-type EVs that cost less than $55,000 and electric SUVs and trucks that cost less than $80,000.

These are not all of the federal incentives and they don’t even take into account the fact that many states are already providing their incentives for EV purchases at a time when many EV prices are already failing. Analysts note that some customers, if they are lucky enough, could drive a new or used EV off the lot for as little as $10,000 this year.

The average price of an electric car has already dropped by nearly 18 percent over the course of 2023. At the end of the year, the average EV cost – even after factoring in the higher prices demanded of consumers by Tesla – was $50,789 – within spitting distance of the average price of a traditional gas-powered vehicle at $48,759.

With the help of these taxpayer-funded incentives and market-driven price drops, Cox Automotive expects EVs to comprise up to 10 percent of the U.S. vehicle market by the end of 2024, up from 7.6 percent in 2023 – when domestic EV sales hit a record high of 1.2 million – and 5.9 percent in 2022.

First-time EV adopters will continue to power this expansion in EV sales, with market research firm LexisNexis Risk Solutions noting that three out of every four new EV sales are driven by people switching from internal combustion engine-vehicles to EVs out of curiosity and artificial attraction due to the supposedly cheap purchase prices.

Watch this clip from “Two Bit Da Vinci” as host Ricky Roy discusses why traditional car companies are still struggling to fully implement electric vehicle lines.

This video is from the High Hopes channel on Brighteon.com.