A sharp rise in electric vehicle sales has made the U.S. the world’s second-biggest EV market behind China.
According to technology-market research firm Counterpoint, first-quarter EV sales in the U.S. showed a 79% year-over-year increase, up from previous reports indicating 63%. In contrast, sales of gas-powered cars only showed negligible differences between 2022 and 2023. Counterpoint attributes this surge to the arrival of tax credits, which played a “crucial role” after becoming active in January following the passing of the Biden Administration’s Inflation Reduction Act.
This number positions the U.S. ahead of former second-place holder Germany in market size but behind the market’s current front-runner China. Tesla continued to be one of the world’s best-selling electric car brands and accounted for 62.7% of quarterly EV sales volume in the U.S., even as its dominance continues to be challenged by other brands. Although legacy automakers such as Ford and General Motors remain far behind in market share, their efforts to introduce new models and increase production have successfully eaten away at the Elon Musk-led company’s headstart, comprising 5.2% and 7.6% of first-quarter EV sales, respectively.
However, while EVs are selling faster than ever, they still remain a niche product in the U.S., capturing only 7% of car buyers during the first quarter. Car manufacturers, excluding top players such as Tesla, still struggle to generate profit from EV sales, an issue likely to continue well into the future. However, the surge in activity seen since last year indicates that automakers are still taking the market seriously and remain convinced that the technology is the future, even if their timelines for abandoning gas-powered vehicles remain unclear.