Tesla drives jump in EV sales

Source: Anne C. Mulkern, E&E News reporter • Posted: Friday, February 22, 2019

Sales of electric vehicles in California jumped to a new high late last year, largely driven by purchases of Tesla Inc.’s Model 3.

Plug-in EVs grew to 4.7 percent of all new car sales in October through December, up from 2.6 percent in the same period of 2017, the California New Car Dealers Association said in a report.

The increase came as buyers snapped up Tesla’s Model 3 while they could get a $7,500 tax credit, said Dan Sperling, director of the Institute of Transportation Studies at the University of California, Davis. Last year was the deadline to qualify for the credit because Tesla has sold 200,000 cars, the maximum allowed under the government incentive program. The tax credit now starts to decline.

Registrations of new Teslas surged 333 percent in the fourth quarter, the report said. However, Teslas constituted just 3.5 percent of the total new cars bought in California, the report said.

The Model 3 was the top seller in the trade group’s “near luxury” category, with sales representing nearly 36 percent of that category. The Mercedes-Benz C-Class followed at 12 percent.

Sperling predicted that “there will be a drop” in plug-in EV sales the first part of this year “because Tesla is shifting Model 3 sales to Europe and Asia” as the U.S. tax incentive declines.

Also last year, sales of plug-in hybrids grew to 3.1 percent of the market in the fourth quarter, from 2.2 percent a year earlier. Sales of traditional hybrid cars fell to 4.1 percent from 4.4 percent in the fourth quarter of 2017.

Combined, EVs, plug-in hybrids and other hybrids made up 12 percent of car sales in the fourth quarter, compared with 9.4 percent in the last three months of 2017.

At the same time, trucks remain popular. California light truck sales grew 5.1 percent during the first nine months of 2018 compared with a year earlier.

It was the same picture nationwide. For U.S. sales in that period, light truck purchases climbed by 6.9 percent compared with January through September 2017.

Non-luxury SUVs made up 29 percent of the market, while luxury SUVs constituted 11 percent in the first nine months of last year. Sales were up in both categories compared with 2017.

“The trends we are seeing in California regarding an increase in demand for larger vehicles continues to demonstrate the shift in customer attitude around convenience, affordability, and consumer choice to meet transportation needs,” said California New Car Dealers Association Chairman Ted Nicholas, who runs a Chevrolet dealership. “We can expect to see manufacturers increasing their supply and options of larger, more family friendly vehicles.”