Is the EV Future We Were Promised Over?

Written by Leigh Matthews, BA Hons, H.Dip. NT

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Leigh Matthews, BA Hons, H.Dip. NT

Sustainability Expert

Leigh Matthews is a sustainability expert and long time vegan. Her work on solar policy has been published in Canada's National Observer.

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Every revolution involves pushback. The EV/ICE revolution is no different. With critics claiming EV sales are in decline, we got to wondering if the EV future we were promised is over. My take? Not a chance. Here’s why.

Tesla model Y in SoCal.
The Tesla Model Y is one of America’s best selling cars.

Are EV sales on the decline?

Hardly.

In fact, EV sales have been growing year on year for a while now. 

In 2023, more than 1.4 million plug-in EVs were sold in the US.

That’s the first time EV sales have topped one million, and it’s a big increase from previous years.

So, why all the chatter about a decline in EV sales? 

Because there has been a tiny bit of moderation in the growth of sales in certain markets.

For instance, while overall sales volumes have risen each year, sales slowed towards the end of 2023 and California actually saw a slight decline in EV sales in the last two quarters of the year. That was after a very strong period of sales in the first two quarters of 2023. Into 2024, sales are picking up again, in California and beyond.

Why did EV sales growth slow in 2023?

Here’s my two cents:

  • Folks keen to take advantage of the new EV rebates in the US bought their EVs early in 2023, so it stands to reason that growth slowed a little after that initial rush
  • Rising interest rates helped temper sales of all new vehicles, EV and otherwise
  • The price of most EVs (and hybrids and ICE vehicles) went up due to inflationary pressures
  • Some EV rebates and tax credits were phased out in certain markets, slowing demand
  • Gas prices, which were staggeringly high in 2021 and 2022 (largely due to the Ukraine-Russia conflict), began to decrease dramatically in 2023, curbing some of the cost benefits of EVs versus ICE vehicles.

Have ICE sales peaked?

Yup.

An analysis by Bloomberg found that sales of ICE vehicles peaked in 2017, with 86 million sold. By 2022, sales were just 69 million.

Let’s look at the numbers side by side:

ICE vehicles (million units)Hybrid vehicles (million units)Electric vehicles (million units)
201785.90.4 0.7
201884.70.61.3
201981.50.51.6
202069.71.12.2
202168.624.6
202269.12.9 7.5
2017-2022 figures from Bloomberg’s analysis of global sales

Sales of internal-combustion engine (ICE) vehicles peaked in 2017 and are now undergoing a long-term, structural decline.

Bloomberg NEF REport for COP28, PDF

The same is true in China and Europe. In China, PHEVs and EVs made up 26% of sales in 2022, while ICE models were 28% down from their peak sales in 2017. And in India, EV sales rose from 15,000 in 2021 to nearly 50,000 in 2022.

The future is EV.

What’s next for EV sales?

EV sales may have moderated a little in late 2023, largely due to market forces, but things are firmly back on track for 2024. And overall, EV adoption has grown:

From 1.4% of global sales in 2017 

to

8.6% of global sales in 2021

to

18% of global sales in 2023.

Basically, in 2023, nearly 1 in 5 cars sold was electric.

Unsurprisingly, major automakers have committed billions of dollars to manufacturing EVs. There are dozens of new EV models slated for release in 2025, including new offerings from the likes of:

  • Ford
  • GM
  • Volkswagen
  • BMW.

Tesla remains the undisputed leader in EV sales in the US though. In 2023, Tesla accounted for 55% of EV sales and, perhaps more impressively, Tesla’s share of the total US vehicle sales was 4.2%. That’s more than Volkswagen and Subaru, among others. Around 33% of Tesla sales were the Model Y.

Could it still all go wrong for EVs?

As always, there are detractors who are clinging desperately to their internal combustion engines. That leads to growing anti-EV rhetoric and disinformation campaigns. Often with political motivations and sheer bullheadedness. 

In the past (‘90’s and early 2000’s), such campaigns have led traditional automakers to ax their EV programs, including:

  • GM
  • Toyota
  • Honda.

I don’t think the same thing will happen this time around, given the overwhelming consensus that we actually have to do something about climate change. Even many conservative politicians recognize that it’s good policy to incentivize EVs.

What may slow things down a little are supply chain issues and teething troubles for some automakers testing the waters. The good news is that newer battery technologies and EV designs are helping overcome those barriers.

My takeaway

EVs are the future. A little dip in the growth of sales here and there won’t do much to change that.

In the first quarter of 2024 alone, US sales of PHEVs and BEVs topped 473,000.

After all, the fundamental drivers of EV adoption are still in place:

  1. Better technology with less maintenance
  2. Lower operating costs
  3. Fewer/zero emissions at the tailpipe
  4. Increasing political motivation to incentivize EVs
    • Through the IRA Clean Vehicle Credits (up to $7500 for new EVs or $4000 for used EVs)
    • Thanks to a $7.5 billion investment from the Bipartisan Infrastructure Law to create a network of 500,000 EV chargers across the US to reduce range anxiety
    • Requirements on automakers to sell a rising percentage of EVs each year (led by California’s Advanced Clean Cars rule, now adopted by 15 additional states through Section 177 of the Clean Air Act. )
  5. Declining battery costs and stronger supply chains
  6. Greater investments by automakers.

Together, all of these factors look set to drive EV adoption significantly in the next 5-10 years. EVs will be more affordable, better served by charging networks, and more normalized as the vehicles of now, not just a cleaner, greener future.

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