Lower subsidies and higher interest rates are lifting the accelerator on EV adoption.
According to Kelly Blue Book, 2023 was a record year for U.S. electric vehicle sales, with 1.2 million vehicles delivered, resulting in a 7.6% total U.S. market share, up from 5.9% in 2022. Fourth-quarter EV sales were up year-over-year by 40% — big numbers, but lower than the 49% year-over-year gain in the third quarter.
Cox automotive predicts that 2024 will see EV market share in the U.S. reach 10% of all vehicles. Growth is slowing and dealer inventories of electric vehicles in America are climbing, and some manufacturers such as Ford have begun offering incentives to move EVs. A fundamental reason in the reduction in electric vehicle sales incentives in America and Europe was a persistently high MSRP of electric vehicles, caused by the high cost of batteries.
With high interest rates making the financing of expensive purchases even more expensive, buying with persistent inflation in other consumer goods, but optional electric vehicles worldwide may be slower than predicted.
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