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“I was a little bit bearish on Tesla for this quarter — and I should’ve been darker.”
The electric vehicle market is anyone’s game.
That’s the takeaway from this year’s first tranche of EV sales data, which saw the two global market leaders — Tesla and BYD — turn in dismal sales for the first three months of the year. Those were in contrast to other automakers including Rivian, Hyundai, and Toyota, all of which reported healthier numbers.
Tesla’s deliveries, which Wall Street uses as a decent proxy for sales, came up well short of analysts’ expectations at 386,810 vehicles for the quarter — down about 9% from the first quarter of 2023. Analysts have consistently cut their estimates for this quarter’s deliveries over the past few weeks, but even so, the real numbers came in well below even the lowest expectations.
“I was a little bit bearish on Tesla for this quarter — and I should’ve been darker,” Corey Cantor, an EV analyst for BloombergNEF, a new-energy research firm, told me.
But despite those meager results, Tesla edged out BYD on sales for the quarter. The Chinese EV giant — whose new $9,000 Seagull hatchback has stunned Western automakers and triggered protectionist impulses around the world — reported far less stunning sales data. BYD sold 300,114 vehicles in the first three months of 2024, down 42% compared to a year before.
That means Tesla is once again the world’s No. 1 seller of electric vehicles, after ceding that title to BYD last year. But little else is going right for Elon Musk’s car company.
Tesla has an aging vehicle line-up, and its newest North American offering, the Cybertruck, has not impressed reviewers. By its own admission, the company is struggling to scale up the Cybertruck’s production as well.
Perhaps most worrying for Musk is that Tesla produced almost 47,000 more vehicles during the first quarter than it sold, suggesting that it is beginning to hit real limits on customer demand for its cars.
“There must be some kind of supply-demand imbalance here,” Cantor said. Tesla has slashed its vehicle prices by thousands of dollars over the past year in order to stimulate demand. Tesla doesn’t break out its sales data by region, which is a shame because that could help clarify what is going on. If Tesla’s sales are flagging in China and Europe, that could be because consumers are flocking to a new set of EV options. A sales decline in the U.S. would indicate that one of the company’s cash cows, the Model Y crossover, is beginning to falter.
“If you look at this, you can see where there are yellow flags here,” Cantor said. “Tesla can explain it however you want but the numbers speak for themselves. Anytime you’re down 9% year on year is a challenge.”
It’s harder to know how to read BYD’s fillip. Other Chinese automakers reported surging March sales. Xiaomi, a Chinese phone maker, has reported almost 90,000 preorders for its first-ever electric car, the SU7. Cantor speculated that the hiccup may be due to Lunar New Year, which tends to depress sales in January and February.
Elsewhere in the car market, other EV makers did better — although few reported surging sales. One exception was Hyundai, which reported EV sales up more than 60% from the first quarter of 2023.
General Motors’ electric vehicle sales fell 20.5% compared to the first quarter of 2023, even as the company’s overall sales of personal-use vehicles rose slightly. It reported higher sales for the Lyriq, its EV SUV, Cantor said.
Toyota says that it sold 206,850 “electrified” cars across North America in the first quarter, a gain of 74% over the year before. “Electrified,” however, is a Toyota term of art — it includes conventional hybrids, plug-in hybrids, and hydrogen fuel cell vehicles. About a third of Toyota’s North American sales now fall in this category.
The electric truck maker Rivian modestly surpassed expectations, beating both analysts’ and its own estimates with 13,588 deliveries in the first few months of 2024. While its total production of 13,980 vehicles for the quarter came in marginally below predictions, Rivian reaffirmed its earlier estimates for full-year production.
Even so, by late afternoon, Rivian’s stock was down 5% for the day. That might be partially explained by the planned weeks-long shutdown of its factory in Normal, Illinois, scheduled to begin at the end of this week. While the pause will allow for renovations designed to reduce costs and increase efficiency, it will also mean that next quarter is guaranteed to be a “wash” for Rivian, Cantor said.
As of last quarter, Rivian was losing about $43,000 on every vehicle it produced. Whether it can stem those losses and get on the “bridge to profitability” executives say is within sight remains, apparently, an open question for shareholders. Rivian is now focused on surviving long enough to sell the R2 SUV. “Every single thing we do within the business is focused on driving costs on this,” RJ Scaringe, Rivian’s CEO, told CNBC last month.
Tesla's and BYD’s flagging sales may also be signaling to investors that a general EV slowdown is coming. And then, of course, there's the general malaise that descended over the EV industry in 2023 as the big legacy American automakers reported sluggish sales for their splashy new electric models and planned to scale back production in the coming year. Though the data don’t present as clear a picture as the doomers might suggest, it is undeniable that, as Princeton energy systems professor and Shift Key podcast co-host Jesse Jenkins wrote for Heatmap, “the vibes are bad.”
“The narrative now will be harsh on Tesla and BYD,” Cantor said. “But if you’re another automaker, you should see this as an opportunity. We’re in the early stages here. None of this is written.”
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Dozens of people are reporting problems claiming the subsidy — and it’s not even Trump’s fault.
Eric Walker, of Zanesville, Ohio, bought a Ford F-150 Lightning in March of last year. Ironically, Walker designs and manufactures bearings for internal combustion engines for a living. But he drives 70 miles to and from his job, and he was thrilled not to have to pay for gas anymore. “I love it so much. I honestly don’t think I could ever go back to a non-EV,” he told me. “It’s just more fun, more punchy.”
But although he’s saving on gas, Walker recently learned he’d made a major, expensive mistake at the dealership when he bought the truck. The F-150 Lightning qualified for a federal tax credit of $7,500 in 2024. Walker was income-eligible and planned to claim it when he filed his taxes. But his dealership never reported the sale to the Internal Revenue Service, and at the time, Walker had no idea this was required. When he went to submit his tax return recently, it was rejected. Now, it may be too late.
Walker is not alone. Dozens of users on Reddit have been sharing near-identical stories as tax season has gotten underway — and it’s only early February. It is unclear exactly how many EV buyers are affected. What we do know is that it will be up to the Trump administration’s Treasury Department to decide whether any of them will get the refund they were counting on — the same administration that wants to kill the tax credit altogether.
The problem dates back to a change in the process for claiming the tax credit. For the 2023 tax year, dealers had until January 15, 2024 to report eligible EV sales to the IRS. For 2024, however, the IRS introduced a new, digital reporting system and new deadlines. Starting in January 2024, if a customer bought an eligible vehicle and wanted to claim the tax credit, dealerships were required to file a report within three days of the time of sale to the IRS through a web portal called Energy Credits Online.
This change coincided with another: Buyers now had the option to transfer the credit to their dealership instead of claiming it themselves. The dealer could then take the value of the credit off the price of the car and get reimbursed by the IRS. This was voluntary on the dealerships’ part, and many opted in. By October, more than 300,000 EV sales had used this transfer option, according to the Treasury Department. But apparently there were also many dealers who didn’t want to bother with it. And at least some of them never bothered to learn about the online portal at all.
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Charlie Gerk, an engineer living in the suburbs of Minneapolis, bought a Chrysler Pacifica plug-in electric hybrid in February after his wife had twins. Unlike Walker, Gerk knew all about the workings of the tax credit, and he wanted to get his discount up front. But the dealership he was working with — a smaller, family-run business — had not gotten set up to do it. “He’s like, ‘We sell six EVs a year, we’re not going to take the time to sign up for that program,’” Gerk recalled the salesman saying. Gerk decided to claim the tax credit himself, and the dealership even gave him a few hundred bucks off the car since he’d have to wait a year to see the refund. He then emailed the dealership instructions from the IRS for reporting the sale through the online portal, and the dealership assured him it would submit the information. It sent Gerk a copy of form 15400, an IRS “Clean Vehicle Seller Report,” for him to keep for his records — except that the form was dated 2023. When Gerk inquired about it, the finance manager told him it was just because it was still so early in the year, and that they would make sure it got filed appropriately online.
Fast forward to one year later, and Gerk came across a post in the Pacifica Reddit forum from someone whose claim was rejected by the IRS because their dealer failed to report the sale. “I logged into my online dashboard for the IRS, and sure enough, the vehicle’s not there,” Gerk told me. “If it was filed appropriately, it would have shown on my online dashboard that I had an EV clean vehicle credit for 2024, and it’s not there.”
Gerk spoke to his dealership, which said it would look into the situation. He forwarded me an email exchange between the IRS and his dealership in which a representative from the IRS’ Clean Vehicle Team said it was probably too late to fix. “The open period for any unsubmitted time of sale reports is closed,” the staffer wrote. “We are expecting some Energy Credit Online (ECO) updates so contact us via secure messaging in the Spring for additional information.”
Some users on Reddit who, like Gerk, were aware of the reporting requirements when they bought their EVs, have shared stories about visiting more than a dozen dealerships before finding one that was registered with ECO and willing to file the paperwork. Others who didn't know about the rules have recalled inquiring about the tax credit at their dealership and being told they could simply claim it on their taxes. They only found out when they tried to submit their tax paperwork on TurboTax or another e-filing system and received an error message informing them that their vehicle is not registered in the IRS database.
Some blame the dealerships for misleading them and are wondering if they have grounds to sue. Others blame the IRS for not adequately informing customers or dealers about the rules.
“My frustration lies with the fact the IRS would even allow this to be an option,” Gerk told me. “If you’re going to allow the credit to be taken by me, I have to be dependent on my dealer doing the right thing?” (Gerk asked that we not share the name of his dealership.)
I spoke with a former Treasury staffer who worked on the program, who told me that the agency went to great lengths to educate dealerships about the new online portal and filing requirements, including hosting webinars that reached more than 10,000 dealerships and a presentation at the National Automobile Dealership Association’s annual convention in Las Vegas. The agency put up pages of fact sheets, checklists, and other materials for dealers and consumers on the IRS website, they said. But the IRS doesn’t have a marketing budget, and also relied heavily on NADA, the Dealership Association, for help getting the word out.
NADA did not respond to multiple emails and phone calls asking for comment. I also contacted several of the dealerships who sold EVs to buyers who are now having their tax credit claims rejected, none of which got back to me.
Many of the affected buyers are trying to get their dealerships to contact the IRS and see if they can retroactively report the sales, as Gerk did. Some are having more luck than others. When Walker contacted his dealership in Cleveland, Ohio, to see if there was anything it could do to help him, it still seemed to have no idea what he was talking about. Walker forwarded me a response from his dealership asking him if he had spoken to his accountant. “My sales desk is pretty insistent on that this is something your accountant would handle,” it said. (Walker did not want to disclose the name of his dealership as he is still trying to work with them on a solution.)
I reached out to the Treasury Department with a list of questions, including whether this issue was on its radar and what consumers who find themselves in this situation should do. The agency confirmed receipt of the request, but had not gotten back to me by press time. We will update this story if they do. There are reports on Reddit of EV buyers having a similar issue claiming the tax credit in 2024 for purchases made in 2023. Some filed their taxes without the EV credit and then submitted appeals to the IRS after the fact, with seemingly some success.
Buyers stuck in this situation have few other places to turn. Some Reddit users have posted about reaching out to their representatives, who offered to contact the IRS on their behalf. One challenge, as noted by the former Treasury staffer I spoke with, is that unlike the dealers, who have NADA, there is no consumer advocacy group for electric vehicle buyers who can engage with lawmakers and the Treasury and request a solution.
“I don’t necessarily need the money,” Walker told me. “It was just gonna go towards some more student loans — I’m just trying to pay down all of my debt as soon as possible. So I didn’t need it. But it would have been certainly something nice to have.”
For now, at least, the math simply doesn’t work. Enter the EREV.
American EVs are caught in a size conundrum.
Over the past three decades, U.S. drivers decided they want tall, roomy crossovers and pickup trucks rather than coupes and sedans. These popular big vehicles looked like the obvious place to electrify as the car companies made their uneasy first moves away from combustion. But hefty vehicles and batteries don’t mix: It takes much, much larger batteries to push long, heavy, aerodynamically unfriendly SUVs and trucks down the road, which can make the prices of the EV versions spiral out of control.
Now, as the car industry confronts a confusing new era under Trump, signals of change are afoot. Although a typical EV that uses only a rechargeable battery for its power makes sense for smaller, more efficient cars with lower energy demands, that might not be the way the industry tries to electrify its biggest models anymore.
The predicament at Ford is particularly telling. The Detroit giant was an early EV adopter compared to its rivals, rolling out the Mustang Mach-E at the end of 2020 and the Ford F-150 Lightning, an electrified version of the best-selling vehicle in America, in 2022. These vehicles sell: Mustang Mach-E was the No. 3 EV in the United States in 2024, trailing only Tesla’s big two. The Lightning pickup came in No. 6.
Yet Ford is in an EV crisis. The 33,510 Lightning trucks it sold last year amount to less than 5% of the 730,000-plus tally for the ordinary F-150. With those sales stacked up against enormous costs needed to invest in EV and battery manufacturing, the brand’s EV division has been losing billions of dollars per year. Amid this struggle, Ford continues to shift its EV plans and hasn’t introduced a new EV to the market in three years. During this time, rival GM has begun to crank out Blazer and Equinox EVs, and now says its EV group is profitable, at least on a heavily qualified basis.
As CEO Jim Farley admitted during an earnings call on Wednesday, Ford simply can’t make the math work out when it comes to big EVs. The F-150 Lightning starts at $63,000 thanks in large part to the enormous battery it requires. Even then, the base version gets just 230 miles of range — a figure that, like with all EVs, drops quickly in extreme weather, when going uphill, or when towing. Combine those technical problems and high prices with the cultural resistance to EVs among many pickup drivers and the result is the continually rough state of the EV truck market.
It sounds like Ford no longer believes pure electric is the answer for its biggest vehicles. Instead, Farley announced a plan to pivot to extended-range electric vehicle (or EREV) versions of its pickup trucks and large SUVs later in the decade.
EREVs are having a moment. These vehicles use a large battery to power the electric motors that push the wheels, just like an EV does. They also carry an onboard gas engine that acts as a generator, recharging the battery when it gets low and greatly increasing the vehicle’s range between refueling stops. EREVs are big in China. They got a burst of hype in America when Ram promised its upcoming Ramcharger EREV pickup truck would achieve nearly 700 miles of combined range. Scout Motors, the brand behind the boxy International Scout icon of the 1960s and 70s, is returning to the U.S. under Volkswagen ownership and finding a groundswell of enthusiasm for its promised EREV SUV.
The EREV setup makes a lot of sense for heavy-duty rides. Ramcharger, for example, will come with a 92 kilowatt-hour battery that can charge via plug and should deliver around 145 miles of electric range. The size of the pickup truck means it can also accommodate a V6 engine and a gas tank large enough to stretch the Ramcharger’s overall range to 690 miles. It is, effectively, a plug-in hybrid on steroids, with a battery big enough to accomplish nearly any daily driving on electricity and enough backup gasoline to tow anything and go anywhere.
Using that trusty V6 to generate electricity isn’t nearly as energy-efficient as charging and discharging a battery. But as a backup that kicks in only after 100-plus miles of electric driving, it’s certainly a better climate option than a gas-only pickup or a traditional hybrid. The setup is also ideally suited for what drivers of heavy duty vehicles need (or, at least, what they think they need): efficient local driving with no range anxiety. And it’s similar enough to the comfortable plug-and-go paradigm that an extended-range EV should seem less alien to the pickup owner.
Ford’s big pivot looks like a sign of the times. The brand still plans to build EVs at the smaller end of its range; its skunkwords experimental team is hard at work on Ford’s long-running attempt to build an electric vehicle in the $30,000 range. If Ford could make EVs at a price at least reasonably competitive with entry-level combustion cars, then many buyers might go electric for pure pragmatic terms, seeing the EV as a better economic bet in the long run. Electric-only makes sense here.
But at the big end, that’s not the case. As Bloombergreports on Ford’s EV trouble, most buyers in the U.S. show “no willingness to pay a premium” for an electric vehicle over a gas one or a hybrid. Facing the prospect of the $7,500 EV tax credit disappearing under Trump, plus the specter of tariffs driving up auto production costs, and the task of selling Americans an expensive electric-only pickup truck or giant SUV goes from fraught to extremely difficult.
As much as the industry has coalesced around the pure EV as the best way to green the car industry, this sort of bifurcation — EV for smaller vehicles, EREV for big ones — could be the best way forward. Especially if the Ramcharger or EREV Ford F-150 is what it takes to convince a quorum of pickup truck drivers to ditch their gas-only trucks.
Current conditions: People in Sydney, Australia, were told to stay inside after an intense rainstorm caused major flooding • Temperatures today will be between 25 and 40 degrees Fahrenheit below average across the northern Rockies and High Plains • It’s drizzly in Paris, where world leaders are gathering to discuss artificial intelligence policy.
Well, today was supposed to be the deadline for new and improved climate plans to be submitted by countries committed to the Paris Agreement. These plans – known as nationally determined contributions – outline emissions targets through 2030 and explain how countries plan to reach those targets. Everyone has known about the looming deadline for two years, yet Carbon Briefreports that just 10 of the 195 members of the Paris Agreement have submitted their NDCs. “Countries missing the deadline represent 83% of global emissions and nearly 80% of the world’s economy,” according to Carbon Brief. Last week UN climate chief Simon Stiell struck a lenient tone, saying the plans need to be in by September “at the latest,” which would be ahead of COP30 in November. The U.S. submitted its new NDC well ahead of the deadline, but this was before President Trump took office, and has more or less been disregarded.
Many of the country’s largest pension funds are falling short of their obligations to protect members’ investments by failing to address climate change risks in their proxy voting. That’s according to new analysis from the Sierra Club, which analyzed 32 of the largest and most influential state and local pension systems in the U.S. Collectively, these funds have more than $3.8 trillion in assets under management. Proxy voting is when pensions vote on behalf of shareholders at companies’ annual meetings, weighing in on various corporate policies and initiatives. In the case of climate change, this might be things like nudging a company to disclose greenhouse gas emissions, or better yet, reduce emissions by creating transition plans.
This report looked at funds’ recent proxy voting records and voting guidelines, which pension staff use to guide their voting decisions. The funds were then graded from A (“industry leaders”) to F (“industry laggards”). Just one fund, the Massachusetts Pension Reserves Investment Management (MassPRIM), received an “A” grade; the majority received either “D” or “F” grades. Others didn’t disclose their voting records at all. “To ensure they can meet their obligations to protect retirees’ hard-earned money for decades to come, pensions must strengthen their proxy voting strategies to hold corporate polluters accountable and support climate progress,” said Allie Lindstrom, a senior strategist with the Sierra Club.
Football fans in Los Angeles watching last night’s Super Bowl may have seen an ad warning about the growing climate crisis. The regional spot was made by Science Moms, a nonpartisan group of climate scientists who are also mothers. The “By the Time” ad shows a montage of young girls growing into adults, and warns that climate change is rapidly altering the world today’s children will inherit. “Our window to act on climate change is like watching them grow up,” the voiceover says. “We blink, and we miss it.” It also encourages viewers to donate to LA wildfire victims. A Science Moms spokesperson toldADWEEK they expected some 11 million people to see the ad, and that focus group testing showed a 25% increase in support for climate action among viewers. The New York Timesincluded the ad in its lineup of best Super Bowl commercials, saying it was “a little clunky and sanctimonious in its execution but unimpeachable in its sentiments.”
General Motors will reportedly stop selling the gas-powered Chevy Blazer in North America after this year because the company wants its plant in Ramos Arizpe, Mexico, to produce only electric vehicles. The move, first reported by GM Authority, means “GM will no longer offer an internal combustion two-row midsize crossover in North America.” If you have your heart set on a Blazer, you can always get the electric version.
In case you missed it: Airbus has delayed its big plan to unveil a hydrogen-powered aircraft by 2035, citing the challenges of “developing a hydrogen ecosystem — including infrastructure, production, distribution and regulatory frameworks.” The company has been trying to develop a short-range hydrogen plane since 2020, and has touted hydrogen as key to helping curb the aviation industry’s emissions. It didn’t give an updated timeline for the project.
“If Michael Pollan’s basic dietary guidance is ‘eat food, not too much, mostly plants,’ then the Burgum-Wright energy policy might be, ‘produce energy, as much as you can, mostly fossil fuels.’”
–Heatmap’s Matthew Zeitlin on the new era of Trump’s energy czars