Latest electric vehicle sales statistics continue to surprise
Insights — July 2023
Cox Automotive conducted a survey of more than 1,100 consumers and found that 51% are considering either a new or used EV, up from 38% in 2021
According to data from Cox Automotive Inc. (the world’s largest automotive services organisation and a leading industry participant in the United States), electric vehicles made up 6.5% of all new car purchases in the United States in the first half of 2023 and it expects sales to surpass one million annual units for the first time this year. While this share may seem relatively low, the growth has been rapid, considering electric vehicles were only 2.5% of total auto sales in 2021 and less than 1% in 2018.
Reflecting this evolution, electric vehicles made up almost 1% of used car sales, as increasing second-hand availability begins enabling greater penetration in this segment of the market. This validates that fact that electric vehicles will not just be just a new car phenomenon.
Looking ahead, AutoForecast Solutions (a leading automotive forecasting company) assumes more than 90 new electric vehicle models will become available in the United States by 2026, setting the stage for penetration to continue to increase rapidly across both market segments. From a global perspective, the IEA forecasts electric vehicle sales growth of 35% year-over-year in 2023 to 14 million units or just under 20% of total vehicle sales.
What does the consumer think?
Cox conducted a survey of more than 1,100 consumers and found that 51% are considering either a new or used EV, up from 38% in 2021. 53% said that they felt that “electric vehicles are the future and will largely replace gasoline engines over time”. We believe this indicates that we’re some way off charting the full magnitude of consumer demand for electric vehicles.
Cox also surveyed more than 150 auto dealers and we found it particularly interesting that only 31% of dealers were as positive about electric vehicles, with nearly half of the view that “electric vehicles need to prove themselves to the marketplace”.
We find this divergence of opinion between consumers and the incumbent distributors of product to be fascinating. We believe it is partly related to the different business models being favoured by electric vehicle manufacturers (such as Tesla) which bypass dealers and sell direct to consumers. However, we also believe that it underscores the magnitude of disruption underway – key industry participants just have not appreciated the magnitude of what is happening yet.
We believe this characteristic extends to asset markets, where it represents an extraordinary opportunity. The longer-term earnings and cashflow implications under a scenario whereby electric vehicles achieve a majority of global vehicle sales (which we consider the base case) is simply not reflected in stock prices and represents extraordinary investment opportunity.
We also perceive considerable risk remaining positioned in companies at risk of falling victim to this extraordinary disruption which will extend well beyond the automotive industry and its immediate supply chains, as underscored by the IEA’s sobering forecast that electric vehicles will reduce global oil demand by 5 million barrels per day (or roughly 5%) by 2030.