The EV (electrical vehicle) wave is building here in the U.S. New data from Experian Automotive, the data collection company’s automotive arm, shows new registrations for EVs have jumped 60% from a year ago in the first quarter and have hit an all-time high of 4.6% of the overall market.
This comes as overall registrations are down 18% from a year ago, as the chip and component crunch, among other things, are keeping dealer supply at a minimum.
Nevertheless, this big jump in EV ownership raises the question of whether the U.S. has finally turned the corner on mass adoption of electric vehicles.
One reason for more registrations is that there are simply more EVs for sale in the U.S. than in the past. Cars like the Kia EV6 and Niro EV, sister brand Hyundai’s Ioniq 5, and Ford’s (F) Mustang Mach-E, all posted registrations in the thousands in Q1, big jumps from a year ago.
Of course the big dog, if you will, in the EV space is Tesla (TSLA), the number one brand by a long shot. All four of Tesla’s models were in the top ten of EVs registered in the U.S, with the Model Y (52,051), Model 3 (47,682), and Model S (9,250) the top 3 most registered models.
Tesla’s share of the EV market in Q1 stood at a whopping 70% of the total market, with the brand seeing its registrations climb 60% from a year ago.
How EV ownership in the U.S. can keep expanding
In order to see EV ownership climb further in the U.S., experts say at least three things need to happen. First, supply needs to keep growing, which is problematic given the chip and component shortages afflicting the industry so far.
Tesla has seen its waiting list for vehicle orders push out into late 2022, if not into 2023 depending on model and trim. For its part, Tesla is ramping up with new factories in Austin, Texas, and Berlin, Germany, to meet demand. GM and Ford claim they have enough battery materials to meet their EV production needs through 2023.
Second, there needs to be more investment in the charging infrastructure here in the U.S. to limit concerns like range anxiety that plague many potential EV buyers. The Biden Administration has offered $7.5 billion for charging infrastructure funding, and other private sector companies like Charge (CRGE) are looking to capitalize on this build out across the country.
Perhaps the biggest impediment to EV adoption are vehicles that most Americans can afford. Kia’s EV6 ($40,900) and Hyundai’s Ioniq 5 ($39,950) are reasonably priced EVs, as is Volkswagen’s (VOW.DE) ID.4 ($41,955), but there aren’t that many EVs around in that price range.
The Nissan Leaf is also a cheap option, but its range (149 miles) is limited compared to the Kia EV6 (232 miles), Ioniq 5 (303 miles), and ID.4 (260 miles).
The starting price of the base Ford Mustang Mach-E is around $46,596, and the cheapest Tesla, the Model 3 Rear-Wheel Drive, goes for $46,990.
Without providing resources like government rebates or incentives for cheaper EVs, “we aren’t going to see this get to our low-income compatriots,” Los Angeles Mayor Eric Garcetti said in a recent interview.
Eventually Chevrolet’s (GM) Bolt EV ($31,500 starting price, 259 mile range) will be back in production and on dealer lots soon, which will alleviate some of the supply issues and give everyday Americans another more affordable EV option.
But without cheaper cars and available infrastructure, it may be difficult to move the needle beyond 5% adoption in the U.S.