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EV Sales Up Up and Away, Or Are They The Nehru Suit Of Automotive?

PHOTO (select to view enlarged photo)

PHOTO (select to view enlarged photo)

It's Wednesday. It's 4/20. And the question all of us industry watchers are asking: Will he or won't he?

The "he" of course is Elon Musk, and the mystery is if the one-man-news-making-machine will be on the Tesla earnings call later today. With his Twitter storm still raging and a SpaceX launch scheduled for tomorrow, he may have more pressing matters. But if he does join the call, he'll certainly have good news to share, at least when it comes to EV demand in the U.S. Our Kelley Blue Book team finished its quarterly deep dive into sales of electrified vehicles, which we published this morning along with the full, industry-wide sales report.  

As we've noted in earlier missives, auto sales in Q1 dropped more than 15% year over year, but sales of electrified vehicles increased again. Specifically, EV sales have never been better in the U.S., with a new record last quarter at 173,561, up nearly 76% from Q1 2021. New product and strong consumer interest, partly due to high gas prices, are driving the growth; tight inventory is holding it back.

Importantly, the EV story in the U.S. continues to be a Tesla story. In Q1, buoyed by strong estimated sales of the Model Y and Model 3—the best-selling pair of EVs in the U.S., by far—Tesla's share of the EV market increased to 75% according to the Kelley Blue Book count, up from 70% a year ago. (That would make a good Tweet for Mr. Musk.) The EV story in the U.S. is also a luxury-vehicle story, as transaction prices for EVs continue to hold well above the national average. Our team forecast strong EV growth in the year ahead. Honestly, that prediction was an easy one. 

Mid-Month Update for the MUVVI
While EV sales are headline worthy, the used-vehicle market is still the industry's bread-and-butter. And it's heating up as well, as forecast by the Cox Automotive Industry Insights team. Yesterday, we published the Manheim Used Vehicle Value Index (MUVVI), a mid-month look at Manheim auction values which are showing unadjusted increases and higher conversion rates compared to March, an indication interest in used vehicles is increasing—the later-than-normal spring bounce. But with tight new-vehicle inventory and raging inflation, there is nothing typical about the vehicle market today. Our Industry Insights team is doing its best to read the data and signals, but there's plenty of mystery out there still, mystery well beyond Elon's 4/20 plans.

As always, we appreciate your interest in Cox Automotive. Be sure to check out the Auto Market Snapshot for a quick look at all the data we are tracking, powered by DRiVEQ, of course. And if you have any questions or want to connect with any of the analysts or experts at Cox Automotive, feel free to reach out. We'd be happy to help!