2022 witnessed the prevalence of startups and legacy automakers in the US electric vehicle industry, with their new models still coming in. However, new data reveals that some brands’ popularity seems to start waning this year.
In contrast, American electric vehicle giant Tesla continues to lead the market from January to May 2023, accounting for approximately 50% of the registration growth.
Data implications
Experian’s registration data suggests that some of the most popular EV models in 2022 are now losing ground. Some of these EVs include Ford, Kia, and Lucid, as per Automotive News.
For instance, the Tesla Model Y rival Ford Mustang Mach-E enjoyed a YoY registration growth of around 50% to 38,469 units in 2022. However, EV sales dropped by 29% from January to May this year to 10,948 units.
Remarkably, the Musk-led automaker managed to strongly defend its leading position. According to the report, EV registrations grew approximately 68% YoY to 447,517 units in the US in the first five months of the year, with Tesla accounting for nearly 50% of that significant growth.
Tesla’s lead is unsurprising, given its aggressive pricing strategy that ultimately impacted its rivals. All Tesla Model Y‘s trims benefit from the federal tax credit of up to $7,500. Meanwhile, Mach E only gets half of the credit.
EV industry to see continuous growth
Cox Automotive forecasted the EV industry to continuously grow in its report last week. However, the group expects the industry’s pace to be slower.
Furthermore, Cox indicated that EV inventories have now hit approximately 100-day supply ending June. Alarmingly, that figure indicates a twofold lead over the industry average for all the fuel types.
“EV sales records will continue to be set and EV growth will continue to outpace overall industry growth, but the days of 75 percent year-over-year growth are in the rearview mirror. The hard-growth days are ahead.”
Cox Automotive
Nonetheless, the group is still optimistic about the industry, stating that “53 percent of consumers agreed that EVs will eventually replace traditional ICE-powered vehicles.”
In contrast, Car dealerships seem to be more dubious in the US’ progressive EV shift.
“Dealers were more cautious, with only 31% agreeing on an all-EV future. Dealers have a front-row seat to the many challenges ahead. And many dealers, recently, have been watching EV inventory building.”
Cox Automotive
Apart from that, the group also expects the growing competition to gradually pinch Tesla’s market share. However, rivals would surely have a hard time as the Musk-led automaker continues to lead the EV market, driven by the all-electric SUV Model Y.
“One of every three EVs sold last quarter was a Tesla Model Y. Add in the similar-sized Model 3, and those two products are half the electric vehicle business.”
Cox Automotive
See Also:
- Tesla competitors struggle with increasing car inventory in the US, probably due to tax credit ineligibility
- Tesla produces a record number of vehicles after price reductions
- Tesla maintains its dominance in both European and US electric car markets for January 2023
- Tesla Model Y advances as the world’s best-selling car in Q1 2023
Tesla’s aggressive pricing strategy for its popular EV models aided it to retain a strong position in the US market, despite the growing competition from legacy automakers and startups. It would be interesting to see how Tesla would fare in the coming quarters as more automakers penetrate the scene.
