In the first quarter, automakers sold more than 54,000 EVs, a 32 percent increase year-on-year.
Electric vehicle (EV) sales have gotten off to an exceptionally strong start in 2018. In the first quarter, automakers sold more than 54,000 EVs, a 32 percent increase year-on-year (y/y). Sales were particularly impressive due to the performance of the Tesla Model 3, the best-selling EV on the market. Production of the Model 3 has been slower than originally expected and continues to face bottlenecks, but total sales hit more than 5,100 in the first quarter.
The high overall sales in January were particularly remarkable, given that the month is typically slow for auto purchases in general. Even more impressive numbers came in March, with sales over 25,500, the strongest month ever. The fact that record sales occurred in the first quarter, when they typically lag, is even more extraordinary and bodes well for the entire year. In the past six years, EV sales have fallen by a median 20 percent between Q4 and Q1. This year, sales fell by a mere two percent on a quarterly basis. The United States is now among 14 other nations with EV purchases greater than 1 percent of light-duty vehicle (LDV) sales. Total annualized sales in Q1 2018 were 1.3 percent of the LDV market.
The number of EV models continues to increase, providing consumers with more choices and paving the way for widespread adoption.
The number of EV models continues to increase, providing consumers with more choices and paving the way for widespread adoption. There were 49 advanced fuel vehicle models available to consumers in the first quarter, including 31 plug-in electric hybrids, 15 fully electric vehicles, and three fuel cell vehicles. The number is expected to continue to rise as automakers boost their electrification targets. For instance, Volkswagen is seeking to make EVs 25 percent of its sales by 2025, and Daimler 20 percent by then. GM, meanwhile, plans to sell 20 fully electric models by 2023. Others have also announced ambitious EV goals.
Sales of PHEVs grew particularly sharply during the quarter, rising by 29 percent, with the introduction of the Mitsubishi Outlander, the Kia Niro, and the Hyundai into the market and the Toyota’s Prius Prime recording its best month ever. But sales of fully electric vehicles still make up a majority (53 percent in the first quarter) in the U.S. market. Along the Model 3, the fully electric Chevrolet Bolt performed well, with GM selling almost 4,400 units in the quarter.
The Model 3 should continue to thrive even if Tesla’s production volumes remain in flux.
The Model 3 should continue to thrive even if Tesla’s production volumes remain in flux. Sales of the popular sedan reached 2,300 at the end of the quarter, below the company’s goal of 2,500 Model 3s. Tesla has set a target of 5,000 per week by the end of the current quarter, but analysts are skeptical it will reach that objective. This week, an internal e-mail from founder Elon Musk suggested the company will boost sales to 6,000 vehicles per week by June. Investors reacted positively with Tesla shares rising four percent on the news of Musk’s aggressive Model 3 target.
With a strong first quarter and more models available, the more aggressive sales forecasts may be realized. In a forecast bet conducted on Twitter by SAFE’s VP of Content and Communications Strategy Leslie Hayward, the participants’ estimates for 2018 sales were in a wide range, from 250,000 to 413,350 units. Although there is a large discrepancy from lowest to highest, all contributors—who represent academia, journalism, industry analysis, and advocacy groups—see substantial increases compared to 2017 sales of approximately 200,000 units.
Globally, the outlook is similarly positive for EVs as governments continue to provide incentives through tax credits for purchases and more models are available. Bloomberg New Energy Finance (BNEF) sees 1.6 million EV sales around the world, with fully electric models making up 62 percent of the total. China will continue to be the main driver, where sales should make up three percent of total auto purchases this year. The BNEF projection for 2018 would put sales up by more than 500,000 versus 2017 and more than triple 2015 levels. It’s important to remember that the rapid growth in electrification over the past four years has occurred despite oil prices averaging significantly lower than during 2011-14.
Bloomberg New Energy Finance (BNEF) sees 1.6 million EV sales around the world, with fully electric models making up 62 percent of the total.
As sales pick up and automakers lay out their plans, forecasters are becoming more bullish on EV adoption for the longer term. The consensus is that EV market share will continue to rise at a robust pace in the coming decades. BNEF now sees the number of EVs globally surpassing 500 million by 2040, a 25 percent increase from its forecast a year ago, reinforcing the conviction that EVs will soon reach a tipping point.