According to a recent report from The Wall Street Journal, electric vehicle sales in the US have surged by 50% YoY in the first half of 2023, outpacing traditional fuel-powered cars. However, growth has been slowed due to inventory buildup at dealerships.
In the first half of this year, major automakers in the US sold a total of 557,330 EVs, while sales of traditional fuel-powered cars increased by only 10% YoY. EV sales accounted for 7.2% of total car sales in the US from January to June this year, up from 5.4% a year ago.
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Despite the overall increase in sales, some automakers have faced challenges in the EV market. Ford, for example, sold 14,843 EVs in the US in Q2, but experienced a decline of 2.8% due to shortages of the Mach-E caused by a factory overhaul. GM also revealed that they sold 15,652 EVs in the US in Q2, bringing their total US EV sales for the first half of 2023 to 32,322.
While many car companies have offered promotions to stimulate demand for EVs, growth in EV sales this year has lagged behind the 65% growth seen in 2022, according to Motor Intelligence data. Additionally, inventory of EVs at major dealerships has grown to “record levels,” with around 90,000 EVs either backlogged at dealerships or on their way to vehicle stores, which is four times higher than a year ago, according to research firm Cox Automotive.
To address these challenges, the US government recently announced a $2 billion investment from last year’s Inflation Reduction Act to accelerate the domestic production of EVs. The program will provide cost-sharing subsidies for hybrid, plug-in hybrid, pure electric, and fuel cell vehicles, and will help revive struggling manufacturers through policies.
As the demand for EVs continues to rise, it remains to be seen how automakers will navigate the challenges of inventory buildup and supply chain disruptions. Nonetheless, the future of the EV market in the US looks promising, with the government investing in the industry and consumers increasingly turning to electric vehicles.
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