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Electric cars are smashing sales records, but they won’t replace gasoline vehicles anytime soon.

According to vehicle sales data from Cox Automotive, there has been a notable increase in the adoption of electric vehicles by consumers this year compared to previous years.

The sales of electric vehicles (EVs) have exhibited robust growth in recent years, with a notable acceleration observed in the current year. According to Cox, there was a notable increase in the purchase of battery-electric vehicles (BEVs) by American consumers during the second quarter, with approximately 300,000 units sold. This figure represents a new record in the market.

The number of electric vehicles purchased by American consumers during the second quarter of the year exceeded the total number of electric vehicles purchased throughout the all of 2019.

During the period spanning from April to June 2023, an approximate total of 295,000 electric vehicles (EVs) were sold, so establishing a novel milestone in sales figures.

The current figures indicate a year-on-year increase of almost 48%, surpassing the total number of electric vehicles sold in the all of 2019. In addition to the aforementioned figures, it is important to note the sales of plug-in hybrid electric vehicles (PHEVs). These vehicles have the capability to operate on both gasoline and electricity, utilizing a rechargeable battery that can be replenished through either a charging connection or an engine-powered generator.

According to Cox Automotive’s latest forecast, it is anticipated that the number of fully electric vehicles sold in the United States would surpass one million units in 2023, marking a significant milestone in the history of electric vehicle sales. As of the conclusion of the second quarter, the cumulative sales of Battery Electric Vehicles (BEVs) have surpassed the 557,000 mark.

According to experts, the surge in electric vehicle (EV) sales can be attributed to several interrelated causes, including reductions in prices, an expanded range of vehicle options, and increased expenditures from both governmental and manufacturing entities.

Stephanie Valdez-Streaty, the Director of Industry Insights at Cox Automotive, emphasized that the convergence of various factors has created a situation akin to a perfect storm.

According to Valdez-Streaty, the sales growth is being propelled by the Inflation Reduction Act.

At the onset of the year, the Internal Revenue Service (IRS) initiated the provision of tax credits, up to a maximum of $7,500, for Electric Vehicles (EVs). These credits were contingent upon the origin and assembly location of the vehicles and their electrical components. According to the Alliance for Automotive Innovation, a nonprofit trade organisation, a mere 18 out of the 97 electric vehicle (EV) models now available in the market meet the eligibility criteria for the aforementioned tax credit.

According to Valdez-Streaty, the Tesla Model 3, Tesla Model Y, Chevrolet Bolt, Rivian R1T, and Volkswagen ID.4, which are the best-selling electric vehicles (EVs) this year, are eligible for a portion of the Individual Retirement Account (IRA) tax credit.

According to the speaker, the electric vehicle market is currently undergoing a moment of upheaval. According to a poll conducted by Cox Automotive in June, a majority of consumers expressed their intention to potentially purchase a new or used Battery Electric Vehicle (BEV) during the upcoming year. In 2021, only 38% of consumers expressed agreement with the aforementioned statement.

The current challenge lies in devising strategies to enhance sales growth, following the initial phase of attracting early adopters. How can we effectively transition individuals who are considering a purchase into actual buyers? According to Valdez-Streaty (year), it was said that…

The US Energy Information Administration’s sales predictions forecast that transforming buyer demand into an EV-majority market will take several decades.

Based on forecasts by the Energy Information Administration (EIA), it is anticipated that the yearly percentage of newly acquired Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) will stabilize at approximately 17-19% from the year 2035 onwards, extending until at least 2050, under the assumption that existing rules and regulations stay unaltered. Consumer interest in electric vehicles (EVs) is influenced by the price of gasoline. However, according to the agency’s projections, even in a scenario where oil prices reach as high as $190 a barrel in 2022 dollars, the market share of EVs is expected to remain below 30%.

The United States government anticipates that the attainment of a market predominantly composed of electric vehicles (EVs) will not occur in the near future.

According to forecasts from the US Energy Information Administration, electric cars are anticipated to constitute less than 33% of automobile and truck sales until the year 2050, even in a scenario characterized by elevated oil costs.

According to Valdez-Streaty, the primary obstacle for consumers is the cost factor. Despite significant reductions in prices by Tesla and Ford in the current year, the adoption of electric vehicles still entails an additional cost compared to the average gasoline-powered vehicle. According to Kelley Blue Book, the average price of electric vehicles in July was $53,469, which is more than the average price of $48,334 for all vehicles.

According to Cox’s customer study, the second most prominent concern among individuals considering electric vehicles (EVs) was the limited availability of charging infrastructure, following the primary concern of cost.

According to the US Department of Energy, there has been a notable improvement in battery ranges in recent years. Specifically, the number of electric vehicles with a minimum range of 300 miles has climbed from 13 in 2021 to 51 in 2023.

However, there is a deficiency in the quantity of charging stations, which is insufficient to facilitate the widespread integration of electric vehicles. According to the Electric Vehicle Quarterly Report, published by the Alliance for Automotive Innovation, the total number of charging stations in the United States stood at over 134,000 by the conclusion of the first quarter of 2023. Additionally, the report indicates that the country had a fleet of approximately 3.34 million electric vehicles (EVs) in operation during the same period. According to the AAI analysis, in order to achieve a charger-to-car ratio of 7:1, as determined by the California Energy Commission to support the state’s objective of having 5 million electric vehicles (EVs) on the road by 2030, the entire nation would need to establish a quantity of chargers that is two and a half times greater than the current number of available chargers.

According to the survey, geographic discrepancies are widely prevalent. Nearly 30% of all the country’s public charging infrastructure is in California.

According to sales data provided by AAI, the market share of new electric vehicles (EVs) is significantly greater in California. In the most recent month for which data is available, the state of California, in addition to the District of Columbia, stands out as the sole market where electric vehicles accounted for over 20% of total sales of light-duty vehicles.

Electric vehicle (EV) purchases are predominantly prevalent in states located around the West Coast of the United States, as well as in the District of Columbia.
Notwithstanding the increasing sales, a notable discrepancy persists between the market share in certain states and the remaining regions of the nation. In the month of March, electric vehicles (EVs) constituted less than 5% of new automobile purchases in 24 states.

According to Valdez-Streaty, it will be crucial to ensure the establishment and functionality of the charging infrastructure in order to facilitate the future expansion of electric vehicle (EV) sales. Both state and national incentives will play a role in this matter.

In the previous year, the California Air Resources Board made a decision to implement a prohibition on the sale of newly manufactured gasoline-powered automobiles by the year 2035. A minimum of 17 additional states have consented to emulate California’s approach.

Valdez-Streaty expressed curiosity on the future trajectory of sales growth in states that adopt the CARB regulations in the coming years.

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