The U.S. electric vehicle (EV) market will reach a major milestone this month as automakers reach 1,000,000 EV sales. Cumulatively, over 992,000 EVs have been sold since January 2011, according to a SAFE analysis of data from Hybridcars, InsideEVs, and automotive industry press releases, with 110,000 EVs sold in Q3 2018 alone.
The imminent sale of the one-millionth EV is a significant milestone that brings the U.S. one step closer to reducing our transportation systems outsized dependence on oil. This achievement is a direct result of the tireless efforts by communities and advocates throughout the EV ecosystem. Automotive manufacturers are starting to deliver EVs consumers want, and buyers are realizing the value and benefits of driving electric. While this momentum is a great moment in the push for the accelerated adoption of EVs, the U.S. needs to continue to push for policies and support ongoing efforts to make the future of transportation electric.
The march to one million
Targeted research and development, technological breakthroughs, and the ongoing expansion of a nationwide charging infrastructure culminated in the decades-long movement to one million EVs. Industry leaders, including BMW, Nissan, Chevy, Honda, and Toyota, expanded their product offerings and increased the range, affordability, and efficiency of their lineups. Since 2012, these investments have helped bring the average cost per mile of range down from more than $500 per mile to less than $300 per mile. That may not seem like a lot, but in terms of total cost and battery size, an additional $200 per mile of savings off MSRP indicates EVs are going further and for a lot less.
Along with the Model 3, Tesla saw successes across its entire product line with the high-end Models S and X also ranking among Q3 2018’s top five best-selling plug-in vehicles in the U.S.
Tesla, Inc., is owed at least some credit for helping move the market. In addition to expanding its nationwide network of fast chargers along highly-trafficked corridors, the company cut costs by scaling up production at its Nevada Gigafactory starting in 2016. The mid-size Model 3 sedan offers 220 miles of all-electric range at a minimum $35,000 before incentives. Despite early skepticism that it could keep pace with its ambitious production schedule, Tesla met its Q3 2018 goals and sold over 54,000 cars. Along with the Model 3, Tesla saw successes across its entire product line with the high-end Models S and X also ranking among Q3 2018’s top five best-selling plug-in vehicles in the U.S.
Nissan, Chevy, and Toyota have also been innovators in the space by adopting different strategies to broaden their appeal and win over early-adopting enthusiasts. Nissan Motor Company became one of the first major automakers to mass-produce a pure EV, introducing the Leaf in 2011. Nissan has since rolled out a 2018 model year version that receives over 150 miles of range at $29,900 before incentives. Chevy, meanwhile, introduced the Volt PHEV in 2011, appealing to consumers who felt more comfortable with a hybrid-battery electric and gasoline engine powertrain. The Volt dominated the market early on, but in 2012 the plug-in Toyota Prius created strong competition among PHEVs.
In 2018, automakers have introduced more than 46 advanced fuel vehicle models, including 28 PHEVs, 15 EVs, and three fuel cell vehicles.
OPEC strikes back
The sales picture was not always so rosy. Oil prices collapsed in 2014-15, temporarily denting the market for new EVs. Saudi Arabia, alongside its coalition of OPEC producers, flooded the market with low-cost crude, causing gasoline prices in the United States to fall to multi-year lows. The average monthly price of the global benchmark Brent fell from a June 2014 high of $112 per barrel to a January 2016 low of $31 per barrel. In 2015, EV sales uncharacteristically tracked at or below 2014 levels with the weakest month being July when sales were 21 percent below the previous year. The effects of the 2014-15 oil price rout were quickly overcome the following year when OPEC agreed to cut production and increase prices. Memories of the troubles caused by high gasoline prices were short-lived, however, as sales of less fuel-efficient light trucks reached record highs.
The next million
Bloomberg estimates that by 2020 there will be 120 electric car models available with every major auto manufacturer in the market.
As the U.S. passes the one-million EV sales mark this month, consumers are again looking to electricity as a reliably-priced alternative to gasoline. Oil prices passed a $86 per barrel high this month and may rise to over $100 per barrel this year as turmoil in several oil-producing nations further restricts output. For Russia and Saudi Arabia, the accelerating global EV industry is a major threat to oil demand. Although EVs account for less than 1 percent of the market, that proportion is growing quickly. Bloomberg estimates that by 2020 there will be 120 electric car models available with every major auto manufacturer in the market.
“About a third of global oil demand is from cars, and 40 percent of the growth since the year 2000 has come from cars. So, what happens with cars is going to have a big impact on oil demand,” IHS Markit’s Jim Burkhard told CNBC earlier this year. “We have EVs going up to be 30 percent of new car sales by 2040, [up] from 1 percent now.”
As automakers near the 200,000-vehicle cap for the federal $7,500 tax credit, it is crucial that Congress continues to recognize the value of consumer choice in transportation fuels. Incentives for adoption, like the $7,500 tax credit, will maintain this accelerated effort toward the next one million EVs.