EV sales are rising in the US and nearing an important turning point

Despite a steady drumbeat of bad news for EVs, it may surprise some to hear EV sales in the US are actually rising and nearing a major milestone.

According to Cox Automotive’s Kelly Blue Book (KBB), EV sales jumped 11% year over year to just over 346,000 new EVs sold. KBB also said that EV sales rose 5% compared to Q2.

More importantly, the EV market share in the US climbed to 8.9%, up from the 7.8% seen last year. While the EV market share growth rate has slowed somewhat, it is nearing the 10% threshold that many see as a major milestone for EV adoption in the US.

“While year-over-year growth has slowed, EV sales in the US continue to march higher,” said Stephanie Valdez Streaty, Cox Automotive’s director of insights, in the report.

But it’s not all good news behind the rising sales of new EVs. Manufacturers and dealers are absorbing rising incentives and price cuts to move cars off the lot. KBB reports that Q3 incentives averaged more than 12%, much higher than the 7% industry average.

On the flip side, EV leases have surged thanks to help from the federal government. As previously reported, customers who lease an EV are entitled to the full federal EV tax credit, regardless of where the EV was built, the cost of the EV, or the income level of the consumer, which are limiting factors for the tax credit for buyers.

KBB found that EV lease penetration climbed to 42.7% (as opposed to buying outright or financing) at the end of the quarter, having risen steadily since December 2022, when the federal government announced details on EV leasing. At that time, EV lease rates were around 10%. For comparison’s sake, the industrywide lease rate was 22.2% at the end of the third quarter.

Broken down by brands, Tesla’s EV market share remained under 50%, where it has been since the end of the second quarter, though it is still the top-selling EV maker.

The polarizing Cybertruck hit 16,000 units sold in Q3, making it the No. 3 EV sold in the quarter, behind only Tesla’s Model Y and Model 3.

Following Tesla are GM, which saw sales jump 60% in the quarter, and Hyundai, with Ford in fourth place.

As for the balance of 2024, Cox and KBB are dubbing it the “year of more” for EVs in the US. “The growth is being fueled in part by incentives and discounts, but as more affordable EVs enter the market and infrastructure improves, we can expect even greater adoption in the coming years,” Valdez Streaty said.

And that 10% milestone? Cox and its forecasters like Valdez Streaty believe that 10% market share is “well within reach,” given the trends mentioned above.