The mainstream media keeps espousing the nonsense that customers do not want electric vehicles.
This is absurd and shows how misleading the media can be, especially when it comes to Tesla.
When it comes to the major auto markets, the United States is trailing in EV adoption. China is going wild with EV adoption followed by Western Europe. That said, the growth of EVs in the United States is happening.
We are seeing Year-over-Year increases.
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United States: EV Sales Up
One of the keys for the United States is affordability. When it comes to EVs, the market is still premium. There are few vehicles available in the economy class.
This is delaying the adoption rates. Most of the buying public does not reside in this segment of the market. Since the Chinese companies are the leaders when it comes to affordable EVs, the US is simply not participating. Due to the tariff situation, affordable EVs from China quickly move to premium.
Speaking of price, the average transaction price for a new EV last month was $56,902, marking a modest 1.2% decrease from the previous month, which suggests that price sensitivity may be easing as the market matures.
When buying a vehicle, $57,000 is out of range for most consumers.
In spite of this, there were moves higher.
According to recent data published by Cox Automotive, October saw 106,155 new EVs sold across the country, representing a 2.3% increase from September and a 6.7% rise year-to-date. This solid performance means that over 1 million new EVs have been sold in the USA through the first ten months of 2024.
At an average selling price over $57K, this is a healthy chunk of money. It is easy to see why the total number of units is mitigated.
The total market share is also growing.
Electric models now make up a significant 7.9% of the total new car market, a figure that highlights the segment’s growing share despite a broader industry slowdown.
EVs Are In Demand
There is desire within the United States for electric vehicles. While the new vehicle numbers are slowed, the used car market is seeing larger jumps.
The used EV market is experiencing a boom of its own. In October, 23,788 used EVs were sold—a 2.7% increase from September and a staggering 39.5% jump year-over-year. Used EVs NOW make up 1.6% of the overall used car market.
With used vehicles, we see supply being a major factor. Pricing elasticity is crucial in this segment. Fortunately, there were enough vehicles available to help with pricing.
Meanwhile, the average listing price for a used EV in October fell to $37,912, marking a 6.4% decrease compared to the previous year. This decline suggests that as new EVs become more affordable, their used counterparts are following suit, providing a more accessible entry point for buyers. However, this also means current owners are facing higher depreciation.
What an interesting concept: prices go down and units sold increases. It is the basics of most transactions.
A massive drop in pricing means that more people are entering the electrified world. There is still a shortage of vehicles overall, especially as legacy manufacturers have not provided the products people want.
The Collapse of ICE
China is causing a major dent in global ICE sales. They account for less than 50% of the new vehicles sold in that country.
The challenge here is the reversal in economies of scale. As the numbers decline for manufacturers, their finances get hit. Suppliers start to encounter difficulties since the units orders are reduced.
This occurs at a time when many of these manufacturers are sitting on huge amounts of debt. They need to transition yet lose a fortune, per unit, on each EV produced.
Hence why we saw the pullback over the last couple years.
Stellantis, Volkswagon, and Nissan already find themselves in dire financial straits. Each of these companies has either the CEO or CFO sound the alarm. They are entering "emergency" situations.
The next 24 months are only going to get worse for these entities due to the fact that, globally, EV sales keep growing. Market share is expanding and this comes at the expense of ICE.
Posted Using InLeo Alpha
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