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Tax credits led to a surge in U.S. electric vehicle sales in the first quarter of 2023, making the United States the world’s second-largest EV market after China, Counterpoint Technology Market Research said in new research.
U.S. passenger electric vehicle (EV) sales jumped by over 79% year-on-year in Q1 2023, helping the U.S. surpass Germany to become the world’s second-largest EV market.
Battery EVs (BEV) accounted for 81% of all passenger EV sales in the U.S. between January and March, while plug-in hybrid EVs (PHEVs) made up the rest.
The undisputed leader in the BEV market was Tesla, which sold more EVs than the next 18 automotive groups combined, the research showed.
Tesla held a 63% market share in BEV sales, followed by GM with a 7.6% share at a distant second. Tesla Model Y was the best-selling BEV model, followed by Tesla Model 3, Chevrolet Bolt EUV, Volkswagen ID.4, and Chevrolet Bolt, Counterpoint’s research found.
The EV tax credits have played a critical role in lifting EV sales this year, while sales of conventional passenger vehicles remain flat, Research Analyst Abhik Mukherjee said. Currently, around 20 models in total offered by Tesla, GM, Ford, Stellantis, Rivian, and Volkswagen are eligible for the tax credit, Mukherjee added.
Going forward, the U.S. EV market is set to rise if economic conditions improve, Counterpoint’s analysts say.
“Tax credits for new and even used EVs are helping consumers, while investments in streamlining the EV battery supply chain, the establishment of a robust network of EV charging stations and the setting up of battery recycling plants nationwide will all support EV sales growth,” Research Director Jeff Fieldhack said.
“Therefore, we expect US EV sales to reach around 1.5 million units in 2023 if economic conditions continue improving.”
EVs are expected to account for nearly one-fifth of global car sales in 2023, the International Energy Agency (IEA) said in its annual report in April.
China, Europe, and the United States continue to dominate EV sales, with China the frontrunner once again, accounting for around 60% of global electric car sales, the IEA noted.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.