Inside Clean Energy: US Electric Vehicle Sales Soared in First Quarter, while Overall Auto Sales Slid

2024-12-25 03:24:33 source: category:Scams

In a challenging few months for the auto industry, sales of electric vehicles are rising while just about every other category is falling.

U.S. electric vehicle sales rose 76 percent in the first quarter, which was enough to double EVs’ share of the market to 5.2 percent, up from 2.5 percent in the first quarter of 2021, according to Kelley Blue Book.

Overall sales of new cars and trucks were down 15.7 percent for the quarter as automakers dealt with shortages of computer chips and other vital supplies, leading to slowdowns in production.

Clean energy advocates have reason to be excited that EVs are getting closer to the mainstream of the U.S. market, which is essential if the country is going to reduce emissions from transportation. Notably, the strong first-quarter results came before the most anticipated EV debut of the year, the Ford F-150 Lightning pickup, which began mass production on Tuesday.

Reaching 5 percent market share is an important milestone, said Matthew Degan, an editor for Kelley Blue Book and Autotrader. “This is just the beginning” of the ramp-up in EV sales, he told me.

But I don’t want to overstate the significance for the entire EV category, since the strong results were largely because one company—Tesla—had an incredible quarter. Tesla continues to expand and has been creative in finding ways to avoid delays due to parts shortages.

Even with strong financial results, Tesla’s share price took a beating on Tuesday because of investor concerns about how CEO Elon Musk’s plan to buy Twitter Inc. may affect the automaker. Tesla lost about $120 billion in market value in two days.

In the first quarter, Tesla sold 71,358 units of its top-seller, the Model Y, an increase of 89 percent from the prior-year quarter. Of all the EVs sold in the United States during the quarter, 41 percent were the Model Y—more than all of the non-Tesla EVs combined. The runner-up was the Tesla Model 3, with 46,707 vehicles sold, an increase of 126 percent.

Tesla has been more nimble than its peers in devising workarounds to parts shortages, especially of computer chips. The company rewrote software to accommodate new suppliers of computer chips that were filling the gap left by suppliers that are unable to fill orders, as Automotive News has reported. Also, the company has tweaked some of its designs to eliminate the need for some chips, according to CNBC.

Tesla’s success is pulling up the entire EV category, while progress by other automakers is more modest.

But competition is about to intensify.

Ford held a launch event Tuesday to mark the beginning of mass production of the F-150 Lightning at the company’s flagship Rouge assembly complex in Dearborn, Michigan.

“Whenever the world needed us, we met the moment with American ingenuity and American muscle,” Ford President and CEO Jim Farley said at the event. “And right now, the world needs zero-emissions vehicles, and more importantly it needs us to bring them to the many, not just the few.”

Ford said customers have made 200,000 reservations. The company is already playing catch-up to meet demand, with some customers unlikely to see their orders filled until late this year or into 2023.

Other automakers have also stepped up their games on EVs.

The Hyundai Ioniq5 ranked fifth on the EV best-seller chart in the first quarter, with 6,244 vehicles sold, and the Kia EV6 ranked sixth, with 5,281 vehicles sold. The models were released last year and have gotten good reviews.

Hyundai and Kia are the two largest automakers in South Korea, with some overlap in ownership. The companies are working together on electric vehicles, with Hyundai developing a battery and motor system that is being used in both of the new models.

Degan said the Ioniq5 and EV6, with prices that start at about $40,000 before tax credits, are EVs that a typical new-car buyer can afford. Each model is eligible for a $7,500 federal tax credit.

“Not everybody can afford to pay the price for a Tesla,” he said. For example, the Model Y has a starting price of about $62,000.

There have also been some disappointing performers. Among them is the Volkswagen ID.4, the first model from the company’s ID line of electric vehicles to be sold in the United States. The ID.4 was 11th on the best-seller list, with 2,755 vehicles sold.

Despite lots of talk about the potential of the ID line and some good reviews, sales of the ID.4 have suffered because of Volkswagen’s difficulties obtaining parts. Among the challenges, the production of the vehicle slowed down because the company couldn’t get parts from a supplier in Ukraine, a spokesman said.

Looking ahead to the rest of the year, the F-150 Lightning should start going on sale in larger numbers, and Tesla should continue to increase its output at new plants, including the one opened this month in Texas. And many new models are scheduled to go on sale, including crossover SUVs from major brands: the Nissan Ariya and the “near-twin” models jointly developed by Subaru and Toyota, the Subaru Soltera and the Toyota bZ4X.

But since most of the growth is coming from Tesla, I’m going to give Musk the last word on the topic of his company’s ambitions.

“We only crossed 1 million units in the past 12 months recently,” said CEO Elon Musk about global production, in an April 20 presentation about Tesla’s first quarter financial performance. “We aspire to head to 20 million units a year. So, we’re basically 5 percent along the way towards our goal. And we are growing very, very rapidly year-over-year.”


Other stories about the energy transition to take note of this week:

Washington State to Require Electric Heating in Building Code Update: Washington has adopted rules to require all-electric heating and water heating in new commercial and multifamily buildings, the first state to take this step to cut emissions from buildings. The Washington State Building Code Council voted 11-3 to add the requirements to the state building code that will go into effect in 2023, as Tom DiChristopher reports for S&P Global Market Intelligence. “A strong energy code is a critical tool to ensure buildings are part of the climate solution, and Washington’s new energy code can be a model for other states,” Rachel Koller, a coordinator for Shift Zero, a building decarbonization advocacy group, told S&P.

Wind Energy Industry Is Reeling as Major Manufacturers Stumble: Demand for wind turbines is growing, but turbine manufacturers are struggling to turn soaring demand into profit. Companies like Vestas Wind Systems A/S, General Electric Co. and Siemens Gamesa Renewable Energy SA are facing financial pressure on several fronts, as Will Mathis, Ryan Beene, and Josh Saul report for Bloomberg Green. The companies are dealing with rising costs of raw materials and pressure from buyers to cut prices. “What I’m seeing is a colossal market failure,” said Ben Backwell, CEO of the trade group Global Wind Energy Council, about the mismatch between government targets for new wind power and what’s happening in the market.

Despite Assurances that Captured Carbon Is Safe, States Are Transferring Long-Term Liability to the Public: As companies explore a variety of carbon storage projects, at least four states have passed laws over the last year that allow the businesses to transfer responsibility for the projects to state governments after the operations are shut down. At least three other states have similar statutes on the books, enacted years earlier. Some environmental advocates warn these states are setting a dangerous precedent, as my colleague Nick Kusnetz reports for ICN. “Statutes that relieve operators of liability without due regard to existing legal principles create an incentive for sloppy management, leaks and public opposition,” said Scott Anderson, senior director of energy transition at the Environmental Defense Fund.

A New Federal Proposal Would Task Grid Operators, States and Utilities with Planning a Grid that Can Support Clean Energy: The Federal Energy Regulatory Commission has begun the process of approving a plan to require owners of interstate power lines to develop new ways of planning for large projects and sharing costs. The idea is to build a grid capable of handling the transition to increased use of renewable energy, as Jeff St. John reports for Canary Media. The commission has issued a Notice of Proposed Rulemaking, which begins a process in which interested parties can make comments and suggest revisions ahead of a final vote on the rule, which could happen before the end of the year.

Florida’s DeSantis Vetoes a Closely Watched Anti-Solar Bill: In a surprise move on Wednesday, Florida Gov. Ron DeSantis vetoed a bill that would have reduced the financial benefits of rooftop solar. DeSantis, a Republican, vetoed a measure that had passed the Republican-controlled Florida Legislature and was a top priority for the state’s largest utility, Florida Power & Light, as Christie Zizo reports for WKMG News 6. He said he could not support a bill that would impose additional charges on customers at a time when many families are dealing with high prices for gasoline and groceries. The veto is a blow to utility companies that have sought to rein in the growth of rooftop solar, and a victory for the solar industry, which views Florida as one of its most important growth markets.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].

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