While EV Sales Set Records, Critics Imagine a Slowdown

By Eric Gratz, Ph.D., Co-founder and CTO, Ascend Elements

Recent headlines from a few automakers would suggest an all-electric vehicle sales slowdown in the United States. Wired, Reuters, Forbes and Business Insider are just a few of the media outlets projecting a slowdown in electric vehicle demand, based largely on disappointing sales of a few specific models of electric vehicles. Never mind the fact that the U.S. electric vehicle industry is booming.

Look beyond the headlines and you’ll see the market data does not back up claims of “waning interest” in EVs. According to Cox Automotive Inc., year-to-date EV sales through Q3 reached just over 873,000, putting the market firmly on track to surpass 1?million EVs sold in a single year for the first time ever. In Q3 2023, U.S. EV sales increased quarter over quarter for the 13th consecutive quarter. In fact, a new EV sales record was set in Q3 with electric vehicles accounting for 7.9% of all vehicles sold in United States.

Separately, in a recent Yahoo Finance/Ipsos survey, 31% of U.S. consumers said they are likely to buy an electric vehicle. That doesn’t sound like a slowdown. So, what's driving this slowdown narrative??

Surplus Vehicles on Dealer Lots: It’s true that some makes and models of electric vehicles aren’t selling right now. But that shouldn’t be interpreted to mean consumers no longer want to buy electric vehicles. It simply means consumers don’t want to buy those electric vehicles. Automotive history is rife with examples of vehicle models that failed while the overall car market (or vehicle segment) grew. Remember the Pontiac Aztek? Poor sales of the Aztek didn’t foreshadow a downturn in the SUV market.

Affordability: Tesla’s success to date has been supported by early adopters with money to buy relatively expensive electric vehicles. While the pool of buyers willing to pay $80k for an electric vehicle may be drying up, the market for more affordable EVs is growing. It should be no surprise that the Chevrolet Bolt family of vehicles is the lowest priced EV on the market and currently leads the segment at 21% of U.S. market share.

Even Tesla recently cut prices of its Model Y and Model 3 vehicles to reach a larger market.

Brand Loyalty: Brand loyalty also plays a role in EV adoption. In a recent survey of U.S. consumers, 50 percent said they are most interested in buying an electric vehicle from Toyota (30%) or Honda (20%). That’s good news for the Japanese automakers and it may help explain the recent slump in sales of certain electric vehicles.

Brand loyalty is real and has always played a huge role in automobile sales. Why wouldn’t brand loyalty extend to the electric vehicle market? According to J.D. Power, Toyota ranks highest in brand loyalty among mass market car brands and SUVs with a 62-63% loyalty rate. Subaru ranks second in brand loyalty among SUVs with a 62% loyalty rate. It’s worth noting that Toyota currently offers just one all-electric model and Subaru recently launched its first all-electric model in 2023. The all-electric Honda Prologue will launch in 2024. Could brand loyalty be keeping overall EV adoption rates down?

Drivers loyal to Toyota, Subaru and Honda simply haven’t had many all-electric options. As these brands dive into the all-electric market, I expect we will see EV adoption rates skyrocket.

The electric vehicle industry is on a growth trajectory in the United States. As EVs become more affordable and brands like Toyota and Honda get into the game, we will see the pace of EV adoption increase. Not every vehicle will be a hit, but the overall market for electric vehicles is poised to expand. Innovations in battery range and a maturing charging infrastructure will energize demand for all-electric vehicles.

Eric Gratz, Ph.D. is co-founder and chief technical officer of Ascend Elements, Inc., a Westborough, Mass.-based battery recycling and engineered materials company. Dr. Gratz currently serves as the chief technical officer of Ascend Elements. He holds a Ph.D. in Materials Engineering from Boston University and was a post-doctoral fellow at Worcester Polytechnic Institute in the lab of Prof. Yan Wang. Working closely with Prof. Wang, Eric helped develop the innovative cathode precursor synthesis technology that has grown into Ascend Elements.