The popularity of electric vehicles in America has been on a remarkable rise in recent years, but the final two quarters of 2023 were sobering for automakers. Even in California, the strongest market for EVs in America, sales of fully electric vehicles shrank in the second half of the year.
Although the market share of new EVs grew by five percent in 2023 as compared to 2022, its final quarter of the year was less positive. In Q4, 10 percent fewer new EVs were registered than in the third quarter of the year. Worse still, registrations in Q3 were down (very slightly) as compared to Q2.
“When I think about California’s overall adoption, this is just part of this transition,” Stephanie Valdez Streaty, the director of industry insights at Cox Automotive, told Autonews. “But if we see more quarters like this, it will be indicative of a slowdown.”
Read: After Going All In On EVs, GM Is Bringing Back Hybrids To North America
Fully electric vehicles ended the year controlling 21.4 percent of California’s new vehicle market. Meanwhile, the portion of internal-combustion-only vehicles fell by 7.7 percentage points as compared to 2022, accounting for 63.9 percent of overall sales in 2023.
That points to the rise of plug-in hybrid and simple hybrid vehicles, the latter category saw a significant bump in sales in 2023, accounting for 11.1 percent of vehicles sold in the state. Taken together, electrified vehicles controlled 35.9 percent of the automotive market last year.
While two quarters-worth of sales figures in one state is little to go on, California’s role as an EV adoption leader in America means that its charts are closely studied by the automotive industry. And the industry is spooked.
Responding to the growing interest in hybrid vehicles, GM announced that it would dial back its electrification plans slightly, aiming to introduce plug-in hybrid vehicles to American dealerships in the coming years. That’s a move that was viewed positively by investors.
Meanwhile, shareholders are becoming less bullish about companies that are focusing on EVs, per Reuters. After Tesla conceded that it might experience a slowdown in sales growth in 2024, $80 billion was cut from its market valuation.
Meanwhile, legacy automakers like Ford and Renault are adjusting their EV plans worldwide. Ford is slowing down production of its vehicles, while Renault dropped plans for an IPO of Ampere, its EV business, due to the underperforming stock market.
In China, EV makers are facing testing market conditions. CATL, a battery maker, forecast slower growth than in 2022, while BYD forecast the same. In Korea, LG Chemical predicted slower growth in 2024 than in 2023.
While no one expected the EV market’s growth to be perfectly smooth, it seems that automakers were hoping that the ups would last a little longer, and be a little stronger than it looks like they will be.
