The electric vehicle transformation in the US hit yet another milestone last quarter, though further growth into the mainstream may still be elusive. This as Tesla’s lead at the top is narrowing.
According to automotive research firm Kelley Blue Book (KBB), US EV sales in the third quarter crossed 313,000, nearly a 50% increase from a year ago, and around 15,000 more than the 298,000 sold in Q2. Cox Cox Automotive (KBB’s parent company) said EV market share hit 7.9%, its highest ever level and up from the 6.1% recorded a year ago.
“Higher inventory levels, more product availability, and downward pricing pressure have helped spur continued linear growth of EV sales in the U.S. market,” said Jonathan Smoke, Cox Automotive’s chief economist.
Three years ago, total EV sales for the year passed 250,000, and KBB says this year EV sales are on pace to top 1 million. KBB also noted 14 new EV models were now in the mix, and automakers like Volvo, Nissan, Mercedes, and Hyundai saw EV sales gains of over 200%, though at limited quantities.
Of course the 800-pound gorilla in the room is Tesla, which sold over 150,000 EVs in the US, exactly half (50%) of the total amount sold. While a huge amount, Tesla’s share of the pie has been shrinking lately, with 50% its lowest level on record, and down from 62% a year ago.
Though Tesla’s market share is slipping, its overall sales volume is increasing — up 19.5% year over year and beating the industry’s overall growth rate of 16.3%, KBB said.
Coinciding with Tesla’s jump in overall sales have been its price cuts, which the company has been implementing aggressively over the past year or so. “In an attempt to increase sales volume, Tesla slashed prices, which are now down roughly 25% year over year. The price cuts have helped,” KBB noted in its report.
Ford has also cut prices on its Mustang Mach-E SUV, and Ford Lighting EV pickup; however, big picture in the US at least, EVs are still relatively expensive, and that’s a major concern for consumers. KBB reports that the ATP (average transaction price) of an EV was $50,683, down a considerable amount from the $65,000 a year ago, but still more gas-powered cars which can still be had for under $30,000.
Yahoo Finance noted this concern in our EV sentiment poll conducted with Ipsos, which found 70% of respondents were worried about overall cost of EVs, among other concerns.
Tesla for its part has been trying to make EVs cheaper, with CEO Elon Musk claiming market share gains were more important than preserving Tesla’s industry best margins, which were once above 20%. That being said, without more sub-$40,000 EVs like Tesla’s Model 3 and the Chevrolet Bolt, the industry might struggle to hit a 10% EV market share, let alone 20% nationally.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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