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Electric Vehicles

5 Takeaways From an Actually Pretty Solid Quarter for EV Sales

The vibes are shifting yet again.

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Teslas.
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Stop me if you’ve heard this one already, but the supposed EV sales slump isn’t real. The overall growth rate has slowed somewhat, crushing any fantasy that America would accelerate to mostly electric driving in just a few years. But electric vehicles sales have been steadily rising amid a negative narrative, and they rose yet again in the third quarter of 2024.

Carmakers sold 346,309 of them from July to September, a 5% increase over the second quarter of this year and an 11% jump year-over-year. EVs reached 8.9% of all vehicles sold in America in the third quarter, prompting Cox Automotive (which owns Kelley Blue Book) to opine that 10% looks well within reach.

A look inside the numbers behind the news tells us a few important things about the state of EVs.

1. Somebody out there loves the Cybertruck

A lightning rod on wheels, the Cybertruck became a focal point for the anger and contempt lots of very online people feel toward Elon Musk and his support for Donald Trump. But as I noted a year ago for Heatmap, plenty of people want this car — either out of genuine affection for what it is and what it can do, or for the political statement they can make by owning one.

The numbers don’t lie. Despite a slow start, Tesla sold 16,692 Cybertrucks during the third quarter. That made it the number three EV in America behind Tesla’s Model Y and Model 3. The Cybertruck’s emergence, combined with better sales by a refreshed Model 3, helped to stop a slide at Tesla earlier this year caused by falling sales of the aging Models S, X, and Y.

As Tesla goes, so goes today’s EV market. Its slump in 2024 had hampered the growth of the industry at large; a rumored update to the industry-leading Model Y would be a shot in the arm for everybody. Yet even with Tesla stabilizing, Elon Musk’s dominance isn’t what it once was. The company’s market share, which hovered in the 70% range in 2019 and 2020, has fallen below 50%. With a growing slate of competitors, it may never cross above that threshold again.

2. Trending up: GM

Korean brands Hyundai and Kia had been the non-Tesla success story of the past year-plus, with American EV shoppers falling in love with the quirky Hyundai Ioniq 5 in particular. But General Motors seized second place in Q3 as some of its plans finally came to fruition. Chevy sold nearly 8,000 Blazer EVs and almost 10,000 Equinox EVs last quarter. That latter figure is particularly impressive given that the $35,000 base-level Equinox, which could fall below $30,000 after incentives, didn’t hit the market until October. The Cadillac Lyric found a niche. Even the preposterous GMC Hummer EV saw a big sales bump.

GM’s solid numbers don’t include the remarkable success of its partnership with Honda, who borrowed GM’s Ultium platform to build its first American EV, the Prologue. That vehicle sold 12,644 in the third quarter, outpacing GM’s own EV crossovers. (Perhaps the legion of loyal Honda buyers in America were just waiting for the brand to sell them an electric car.)

Chevy and Honda’s success came at the expense of some brands whose electric crossovers aren’t quite so new and exciting anymore. The Ioniq 5 dropped a tiny bit compared to the third quarter of 2023, just 0.5%. However, Ford’s Mustang Mach-E dropped by nearly 10% year over year, while the Volkswagen ID.4 tumbled by 57.8%.

3. Treading water: Ford

Speaking of Ford, it wasn’t all bad news for GM’s rival. Ford’s EV division did better than Wall Street expected. Overall sales actually rose, with gains from the E-transit van and F-150 Lightning pickup truck balancing out falling numbers from the Mustang Mach-E. Even so, Ford is losing billions of dollars on its electric vehicles. The blue oval brand faces a double challenge: It needs to get a new EV on sale to juice sales while figuring out how to dramatically cut manufacturing costs.

4. Incentives matter

Watch any car commercial and you’ll be reminded that incentives aren’t the sole domain of EVs. Brands and dealerships offer all kinds of rebates and discounts to move gasoline cars off the lot. Yet because of the size of the federal and state tax credits and rebates for buying electric, those incentives retain an outsized impact on sales. Cox points out that incentives made up 12% of the average price of an EV sold in the third quarter of this year, compared to just above 7% for other kinds of cars.

What’s especially dramatic, though, is the incentive-driven rise of the leased EV. Overall, Americans lease just over 20% of their new cars, not far from where the figure stood two years ago. At the end of 2022, less than 10% of Americans who got a new EV leased it. But in December of that year, the federal government announced many EVs that weren’t ineligible for tax credits when purchased outright would be eligible for those incentives if people leased them. Cox’s chart paints a stark picture, showing leases rocketing from about 9% to 43% of EV sales.

5. Luxury brands are leading the way

In their own EV makeup, that is. There are six car brands that have 10% of their U.S. sales or more from EVs: Mercedes-Benz, BMW, Jaguar, Audi, and Cadillac — luxury brands all — are five of them. (The other is Mini.)

This makes perfect sense, of course. Luxury brands sell fewer vehicles overall, so it’s easier for EVs to make a big dent in sales. They sell expensive cars, which makes it easier for buyers to swallow the higher cost of EVs. Their drivers have always been more likely to lease cars, even before leasing EVs in particular became so appealing.

In sum, it means that the luxury car brands — while selling fewer overall EVs than Chevy and Honda will eventually sell — will be the first to experience what it’s like for a legacy car brand when the scales tip to more EVs than not.

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