Electric vehicle sales are slowing. No need for panic yet, insiders say.

Source: By ABC News • Posted: Monday, January 1, 2024

The recent headlines for electric vehicles have been brutal: Sales are dropping. Momentum is slipping. Consumers are souring on the technology.

Experts say, however, that 2024 may be the year to finally pull the plug on gasoline-powered cars and trucks.

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

Price slashing by Tesla and its rivals has definitely juiced sales of battery-powered vehicles. In November, dealers increased the discounts on EVs, with the average transaction price (ATP) dropping 8.9%, according to Cox Automotive. EV incentives totaled less than 2% of ATP a year ago.

New models like the Kia EV9, Chevy Blazer EV and Volvo EX30 could also help convince Americans to permanently ditch their V6 and V8 engines.

Moreover, the decision by nearly every automaker to adopt the North American Charging Standard (NACS) port, which Tesla developed, will likely improve the charging experience and ameliorate range anxiety. Voelcker, though bullish on EVs, argued that automakers and the industry overall may have overestimated Americans’ initial fascination with them.

“Some of the manufacturers got overly ambitious,” Voelcker said. “It may be difficult to get to 50% [of new EV sales] by 2030. We’ve moved beyond the early adopters now.”

PHOTO: The all-electric Chevrolet Blazer EV is on display at the 2022 Los Angeles Car Show on Nov. 18, 2022 in Los Angeles.

The all-electric Chevrolet Blazer EV is on display at the 2022 Los Angeles Car Show on Nov. 18, 2022 in Los Angeles. Josh Lefkowitz/Getty Images FILE

According to Ivan Drury, Edmunds’ director of insights, automakers — Tesla included — are selling EVs at a loss. The move by Hertz and other rental car companies to stop adding EVs to their fleets has contributed to sluggish sales, he argued.

“EVs are getting harder to move,” Drury told ABC News. “Earlier in the year they were still going for above MSRP. Once the average interest rate hit 7% EVs began to linger on the lot and now require a lot more work from automakers and dealers to sell.”

PHOTO: The 2024 Hyundai Ioniq 6 gets an estimated 361 miles of range.

The 2024 Hyundai Ioniq 6 gets an estimated 361 miles of range. Hyundai

Ford announced in December it would cut 2024 production targets for its F-150 Lightning pickup truck, building 50% fewer units each week. Jim Farley, the company’s CEO, cited weaker-than-expected demand and a patchy national charging network for the decision. Ford has sold slightly more than 20,000 Lightnings since the end of November.

PHOTO: The Ford F-150 Lightning is displayed during the 2023 Los Angeles Auto Show at the Los Angeles Convention Center on November 24, 2023 in Los Angeles.

The Ford F-150 Lightning is displayed during the 2023 Los Angeles Auto Show at the Los Angeles Convention Center on November 24, 2023 in Los Angeles. Josh Lefkowitz/Getty Images

Last month, German automaker Audi said it would pare back its electric vehicle rollout in the coming year as growth slows, according to Bloomberg. After repeated delays, the company’s Q6 e-tron will finally enter production in the second quarter of 2024.

“Every EV on the market is being battered by bad news,” said Drury. “Nothing is meeting expectations. A new set of buyers now mean a new set of concerns.”

Ed Kim, president and chief analyst at AutoPacific, predicts EV sales in the U.S. will reach 1.5 million units in 2024 and 2 million by 2025, a slightly more conservative outlook compared to other forecasters.

“We’re not seeing the level of frenzied activity we saw earlier. There’s a slight tapering of demand and partially a market correction,” Kim told ABC News. “The rate of adoption has tailed off a little bit but it’s still growing. This is not a catastrophe for EVs. Don’t get panicked yet.”

He added, “A lot of automakers overestimated demand for high-priced EVs. But that does not mean EV demand is dropping.”

PHOTO: A KIA electric car recharges its batteries at a ChargePoint charging station, Nov. 14, 2023, in Charlotte, Vermont.

A KIA electric car recharges its batteries at a ChargePoint charging station, Nov. 14, 2023, in Charlotte, Vermont. Robert Nickelsberg/Getty Images

In fact, the Tesla Model Y was one of the top-selling vehicles in all of 2023, a huge triumph for EVs, Kim pointed out. Tesla, which commands 60% of the electric vehicle auto market, will roll out styling updates and substantial improvements to the Model Y and Model 3 next year, a move to ward off the competition, Kim said.

“We have an EV from a manufacturer that didn’t exist 15 years ago and it will be either the first or second top-selling non-pickup vehicle in 2023,” he said. “That’s shocking especially as EV demand is leveling off.”

Kim and Voelcker agreed that the launch of more three-row electric SUVs, a top priority for families with young children, will be needed to shore up sales. The EV9, Lucid Gravity, VinFast VF9 and ID.Buzz could fill the void.

“2024 will be the year we see three-row EVs coming to the marketplace,” said Kim.

PHOTO: The all-electric Kia EV9 has three rows for passengers.

The all-electric Kia EV9 has three rows for passengers. Kia

Voelcker said the Volvo EX30, a compact SUV that starts under $35,000, would be a significant player in the market, giving mainstream Americans access to an affordable EV with 275 miles of range.

“The EX30 could be significant,” he said.

PHOTO: The EX30, starting price $34,950, is Volvo's fourth electric vehicle.

The EX30, starting price $34,950, is Volvo’s fourth electric vehicle. Volvo

Voelcker, however, doubted that the Cybertruck, Tesla’s angular electric pickup, would sway traditional truck buyers.

“Call me when Tesla produces the first 10,000 units,” he said. “I continue to think the Cybertruck will be extremely difficult to get into volume production.”

Brands that have been more cautious on electrification are readying their first EVs for consumers. Jaguar Land Rover, for example, recently opened pre-orders for its electric Range Rover SUV.

“It’s going to be a real Range Rover, meaning it’s fully off-road capable … and it will address all the functional needs of a Range Rover without compromise, plus deliver on performance,” Joe Eberhardt, president and CEO of Jaguar Land Rover North America, told ABC News. “Up to this point all the competitors out there have made compromises. We won’t make any.”

Tyson Jominy, vice president of data and analytics at J.D. Power, anticipates EV market share to rise to 12% next year — though that percentage could be higher, he suggested. The Inflation Reduction Act negatively impacted sales by slashing the number of electrics eligible for federal tax credits, he asserted. The lack of cheap models also persuaded consumers to stay away.

“EV sales will go up next year, but there are challenges,” he said.

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