Here’s What it Took For Automakers to Gain a Fraction of a Point of EV Market Share

EV adoption rose slightly in Q2 of 2024, but at an extremely high cost to automakers. In order to break the stagnant adoption rate of vehicles with electric powertrains, automakers turned to the classic methods by which unpopular vehicles are moved off lots and into the hands of owners. EV-advocacy publication Electrek summed up the situation by calling it a "fire sale."  These methods include:

1. Reduced MSRPs (Reduced sticker prices)
2. Deep discounts off of already reduced sticker prices. In many cases, five-figure discounts.
3. Low percentage rate finance offers, including by Tesla
4. Special lease deals to provide short-term periods of very low monthly payments
5. Increased advertising, including by Tesla
6. Fleet sales

The means employed did result in some ends. Slightly more vehicles with electric powertrains were sold than in Q1. However, the profitability of these sold vehicles remains questionable at best. Without massive taxpayer-funded incentives on the front and back end of these sales, many would not happen at all, and if there is solid evidence that any brand is making a profit on the lowered costs, it is hard to find. 

Why did automakers react with such deep discounting now? It could be that surveys indicating declining consume interest in EVs, like those from AAA and McKinsey & Company, are backing up the sales trends that dealers and EV retail locations are reporting. 

The adoption of vehicles with electric powertrains in America is measured in a few meaningful ways. One way it is measured is as a percentage of the overall new car market. After growing with steady progress, this metric showed that adoption of vehicles with electric powertrains stalled out in 2023 and into early 2024. According to sources such as Cox Automotive / KBB, who carefully track this metric, the percent market share had been in the low 7% range and dipped below 7% briefly. The latest news as of the end of last quarter (End of June 2024) is that the percent market share of vehicles rose to approximately 8%. That compares favorably to the same quarter of 2023, which had a value of 7.1. Thus, the adoption of vehicles with electric powertrains increased by a fraction of one percentage point in market share compared to the entire total market of automobiles in America. How many more vehicles with electric powertrains were sold in America in Q2 versus Q1? Roughly 30,000. 

Every publication that tracks vehicles with electric powertrains has been reporting on the price cuts, discounting, and special deals offered on such vehicles since the end of 2023, when the incentives began in earnest. In our reporting, we have shown specific examples where leftover new battery-electric vehicles that were two model years old were still on the lot. Such vehicles were being heavily discounted by up to and beyond 20% of their sell price. 

The video link above does a fantastic job of listing all of the incentives automakers have turned to in order help revive (jumpstart) the stalled adoption of vehicles with electric powertrains. Give it a few minutes of your time if you’d like to be better informed about the actual state of the market for battery-electric vehicles. 

Heading into Q3, about 92% of Americans opt not to buy a vehicle with an all-electric powertrain. Can automakers maintain their profit-slashing incentives and hold the line with this low adoption rate of around 8%, or will they eventually need to stem the bleeding? Watch for our monthly updates to find out. 

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John Goreham is an experienced New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can connect with John on Linkedin and follow his work at our X channel. Please note that stories carrying John's by-line are never AI-generated, but he does employ Grammarly grammar and punctuation software when proofreading. 

Screenshot of Tesla low APR advertisement emailed to the author courtesy of Tesla, Inc. Image of Toyota EV discounting by John Goreham.