US electric vehicle (EV) sales saw a slow start in 2024, with first-quarter sales remaining flat and notable industry shifts, such as Ford scaling back expansion plans and Tesla reducing its workforce by 10%.
Despite these initial setbacks, the broader EV market is experiencing significant growth, with six of the top 10 EV makers in the US reporting sales increases between 56% and 86% compared to the previous year, reports Bloomberg.
Stephanie Valdez-Streaty, director of industry insights at Cox Automotive, noted that while some brands struggle, others are seeing record growth. “We’re still seeing growth in demand, just not at the same pace for every brand,” she said. “Right now Tesla doesn’t have new models, Ford doesn’t have a lot in the pipeline. But Hyundai, BMW, Kia, Cadillac — they’re really moving the needle forward.”
General Motors (GM) and Tesla had the most challenging starts to the year. GM discontinued its popular Chevy Bolt before its replacements were ready, and Tesla interrupted Model 3 production for a redesign. Excluding these models, US EV sales in Q1 still grew 23% over the previous year.
Looking ahead, GM is poised to drive significant growth in the US EV market. The company plans to electrify major brands, including the $35,000 Equinox SUV, Blazer, Silverado, and GMC Sierra electric pickups, all featuring the new Ultium batteries developed with LG Chem. GM CEO Mary Barra stated the company aims to produce 200,000 to 300,000 Ultium-based EVs this year, a significant increase from the 5,800 Cadillac Lyrics sold in Q1. Barra commented, “I think it was overhyped and now it’s probably underhyped. The truth is somewhere in the middle.”
Despite concerns of a slowdown, long-term forecasts remain optimistic. The International Energy Agency projects US EV sales will rise to 2.5 million in 2025 from 1.1 million in 2023.
Tesla, responsible for half of the US EV market, faces uncertainty due to its reliance on the Model 3 and Model Y for 95% of its sales. The company has announced few new models, apart from a future Roadster and potential affordable vehicles next year. Tesla’s Cybertruck, currently available only as a $120,000 founders edition, adds to the uncertainty.
Additionally, Tesla’s recent decision to open its Supercharger network to non-Tesla owners and subsequent layoffs of the Supercharger staff has raised questions about the readiness of its charging infrastructure. Elon Musk has since clarified that Tesla will continue to expand the Supercharger network at a slower rate and has rehired some employees.
Corey Cantor, an EV analyst at BloombergNEF, emphasized the importance of mass production for the EV market. “Automakers are probably freaking out too much, as usual, but there is a bit of a Tesla issue,” he said. “If they want to start taking market share, or even just perform at a high level, they need to start producing EVs at mass volume.”
No automaker besides Tesla has sold more than 100,000 EVs annually in the US, and it seems only Musk is able to churn out EVs in high volume in America. This year, Hyundai, GM, and Ford aim to reach that milestone, signaling a turning point for US EV competition. Other automakers, including Stellantis, Hyundai, and Honda, are also expanding their EV offerings in the US market.
US and global EV sales are expected to grow by roughly 20% this year, a slowdown from the 46% growth seen in 2023. However, even this slower growth rate indicates a robust trajectory for the industry, with the potential for all cars to be electric within a decade if maintained.