The electric vehicle (EV) market in 2023 experienced a complex journey, marked by both significant achievements and notable challenges. As the year unfolded, American consumers became increasingly aware of the limitations of EVs, leading to a shift in their buying preferences towards hybrids and plug-in hybrids
Inventory Surplus and Market Adjustments
The year ended with an EV inventory of 113 days, significantly higher than the 69 days for internal combustion engine vehicles, including hybrids, as reported by Cox Automotive in its Industry Insights 2024. This surplus highlighted a critical adjustment phase in the EV market. Despite Cox analysts’ initial prediction of over 1 million EV sales in the US, the actual figure reached 1.1 million, a 46% year-over-year growth, but with noticeable market softening earlier in the year.
Quarterly Fluctuations and Tesla’s Dominance
The fourth quarter of 2023 saw a record volume in EV sales, contributing to a market share of 7.6% for the year, peaking at 8.1% in the quarter alone. Tesla, leading the charge, sold an estimated 654,888 EVs in the US, dominating the market despite a general slowdown compared to the explosive growth in 2022.
GM and Ford’s EV Strategies
General Motors (GM) and Ford, two giants in the automotive industry, had varied experiences in 2023. GM sold 75,883 battery-electrics, with the Chevrolet Bolt/Bolt EUV leading the sales. The company plans to transition the Bolt to its more profitable Ultium platform. Ford sold 72,608 EVs, with the F-150 Lightning and Mustang Mach-E being significant contributors. Both companies are focusing on evolving their EV strategies, with GM aiming to produce 1 million EVs in North America by next year and Ford emphasizing hybrids and plug-in hybrids alongside its next-generation EVs.
Economic and Cultural Challenges
The EV market’s growth has not been without its hurdles. GM’s shortfall in EV sales led to industry speculation about CEO Mary Barra’s future, while the company’s $8-billion investment in the Cruise robotaxi business, part of its EV and autonomous vehicle (AV) development, faced challenges. Furthermore, cultural, political, and economic forces, including resistance from anti-EV groups and the failure of the COP 28 conference to commit to phasing out fossil fuels, have posed significant obstacles.
State Policies and EV Adoption
State policies have also impacted EV adoption. For instance, Texas raised EV registration fees to $200 per year to compensate for diminished gas-tax revenue. This move, along with similar policies in other states, reflects the ongoing debate over EVs’ role in the transportation sector and their impact on traditional revenue streams.
Looking Ahead to 2024
As we look towards 2024, the EV market in the US stands at a crossroads. Cox Automotive predicts EV sales to reach 1.5 million, about 36% higher than last year. However, the path forward is complex, with infrastructure, consumer perceptions, and broader economic and political factors playing crucial roles.
2023 was a year of introspection and recalibration for the EV market. While growth continued, the industry faced significant challenges that highlighted the need for strategic adaptation and resilience. As automakers like GM and Ford navigate this evolving landscape, the future of EVs remains a dynamic and integral part of the broader conversation on sustainable transportation.
