The good news for automakers and environmentalists hoping for a zero-emission vehicle in the long term is that electric cars accounted for 7. 6% of the new car market in 2023, according to Kelley Blue Book, which accounts for approximately 1,200,000 units. compared to 5. 8% in 2022 and 3. 2% in 2021. In addition, at the end of the year, the average transaction value of a new electric vehicle fell to $50,789, down 17% from the last 12 months and putting them at a surprising level. distance from internal combustion models.
Not only did Tesla lead the pack in sales of new electric vehicles last year, but it also made price cuts, reducing the MSRP of some models from $6,000 to $20,000. It’s not like Tesla’s sales were up about 20% in the fourth quarter of 2023, accounting for just over 1. 8 million cars delivered to consumers during the year, a 37. 7% increase compared to 2022. As a result, the company accounted for around 55,000 cars. Percentage of all new electric cars sold in the U. S. U. S.
The bad news is that a combination of forces, current issues with public charging and real-world operational reach, as well as the loss of eligibility of various models for the one-time federal tax credits for eligible EV buyers, are expected to flatten the situation. upward curve of the segment. We’re making a little bit of progress.
With only a relative handful of styles sold last year under the one-time $7,500 tax credits allowed through the Inflation Reduction Act of 2022, fewer buyers were eligible due to the value of the transaction and the earnings limitations included in the bill. As far as the supply of vehicles and batteries is concerned, only a dozen electric cars from the 2022 through 2024 style years are still eligible for the credits. On the plus side, shoppers can now claim the credits at the point of purchase as cashback than having to wait until the following year to claim it on their tax return.
According to the EPA, models that are still valid for the full $7,500 come with the Chevrolet Bolt EV and EUV (discontinued for 2024), Ford F-150 Lightning Extended and Standard Range pickup trucks, and some versions of the Tesla Model 3, Model X and Model Y. ; Credits for the Rivian R1S SUV and R1T pickup truck have been reduced to $3,750. Models removed from the list this year include the Cadillac Lyriq, Nissan Leaf, Volkswagen ID. 4, Tesla Model 3 with rear-wheel drive, BMW X5 xDrive50e and Audi. Q5 PHEV 55.
Incentives for automakers, specifically for electric vehicles that weren’t eligible for federal tax credits starting last year, have been stepped up to help move the metal, with cash rebates ranging from $10 to $30,000 on versions of the expensive Audi e-tron GT. . The Ford Mustang Mach-E and Subaru Solterra electric vehicles are presented with 0. 0% financing. In addition, several automakers have taken advantage of a loophole that allows them to transfer the full $7,500 credits (even to models that would not otherwise qualify to receive them) through their leasing programs.
As a result, Cox Automotive predicts vehicle leasing will grow 20% to 25% over the next year.
In the meantime, here are the 10 best-selling new cars in 2023 according to KBB:
As it stands, Tesla is as strong a logo in the used EV market as it is among the new styles. According to the iSeeCars. com vehicle market, the Tesla Model 3 leads the used car market with 34. 9% of all recorded sales. Unfortunately, electric cars are notorious for rashly squandering their resale cost as successive generations of new and advanced models hit showrooms, and the recent spate of new model price drops only exacerbates the problem.
Used EV prices fell 33. 7% in the fourth quarter of 2023, according to iSeeCars. com data, averaging $34,994, up from $52,821 in 2022. The used EVs with the steepest price drops tend to be older models, with what many imply. technology replaced, adding the Nissan Leaf, the Chevrolet Bolt EV, and the Tesla Model 3, Model X, and Model S.
Expect used EV rates to take a hit even this year, and Hertz announced that it will sell one-third of its all-electric fleet (around 20,000 units), of which about 80% will be Teslas. Cars and SUVs that run on conventional fuel are more popular with consumers, charge less for repairs, and hold their residual price more firmly.
On the bright side, last year debuted a new incentive for buyers of used electric cars in the form of tax credits of up to $4,000 or 30% of the vehicle’s promotional price, whichever is less. To be eligible, the vehicle must have had a single owner and must have been purchased from a dealership; Assembling or sourcing portions does not apply here. However, there are also source of income limits for used electric vehicle credits, namely $150,000 for co-filers, $112,500 for a head of household, and $75,000 for an individual.
According to iSeeCars. com, used electric cars were the best sellers in the U. S. In the U. S. last year, the market for one- to five-year-old models highlighted:
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