- Despite the headwinds, US electric vehicle sales are up in the third quarter of 2024.
- Automakers sold 346,309 electric vehicles in the US.
- Cheap lease deals are likely one of the reasons electric car sales are increasing.
If you want to understand the current state of electric vehicles, take a look at General Motors and Mercedes-Benz. EV sales rose for the American automakerwith the new Equinox EV accounting for nearly a third of GM’s EV sales in the third quarter. Sales of Blazer EVs also increased, and a cheaper Silverado EV and a new Bolt are still on the way.
Mercedes wasn’t so lucky: the automaker witnessed a 42 percent drop in sales of its three electric vehicles – the EQB, the EQE and the EQS – between the third quarter of 2023 and the third quarter of 2024. The Porsche Taycan suffered a similar blow in its first nine months. months of the year, with sales of the model falling by 50 percent worldwide. This year in the US they have fallen from 5,212 to 3,394.
Despite all that, electric vehicle sales in America grew 11 percent last quarter compared to the previous year, with an estimated 346,309 electric vehicles sold, according to Cox Automobile. They rose 5 percent between the second and third quarters and accounted for a record high of 8.9 percent of new car sales last quarter.
Automakers offering cheaper models have helped boost sales, but so have cheap leases and higher-than-average incentives: 12.29 percent of the average EV transaction price, versus 7.1 percent for the rest of the industry.
Cox Automobile also pointed out the ‘leasing loophole’ that gives customers more government incentives to lease rather than buy outright, causing EV leasing rates to respond as you’d expect. According to the publication’s data, leases made up 42.7 percent of EV sales as of July 2024, after a steady increase in early 2023. That’s almost double the industry average of 22 percent.
Buyers can still find plenty of good leasing deals right now. Some are as low as $99 per month with a few thousand dollars lower. The down payments aren’t cheap, but the calculations still come in at well below the average monthly payment for a new car, averaging over $700. Price is a huge motivator for people, especially those who are less confident about the EV technology and want to test it without any obligation.
Porsche
The growing electric vehicle market, including more affordable models, has led to two of the poorest states leading the country in electric vehicle adoption. According to a recent iSeeCars According to one study, Arkansas is number two in growth over the past five years, with electric cars accounting for 5.6 percent of the state’s market share. Louisiana was number three, although electric cars make up only 0.8 percent of the market there. But it’s growing.
Those who buy an EV outright will likely experience lower resale values when these leases return to dealers, but perhaps that’s what the technology needs. Range and charging infrastructure are no longer the biggest concerns of potential buyers; the cost of replacing the battery is greater, but not by much.
Putting more electric vehicles on the road, whether leased or purchased, should only increase the demand for a more extensive and reliable charging network. Automakers may need to enter into leasing contracts to push EV sales above the magic 10 percent threshold. That should lead to mass adoption and help drive prices down even further.
Of course, that only works if EV buyers do not switch back to gas.