Electric vehicles made up 7.1% of car sales in January 2023, a jump from 4.3% during the same time period last year, InsideEVs reports. Total car sales, gas and electric, remained on-par with the past two years, meaning EVs are a standout growth area in the automotive industry.
Out of the 87,708 battery-powered registrations, 57% were Teslas and 43% were from non-Tesla brands, such as Chevrolet, Ford, and Volkswagen. While Tesla remains dominant, its market share has taken a noticeable dive from 74% just one year ago.
Another big trend is the impact of federal tax credits. To qualify for the $7,500 credit, vehicles must be made in America and have a portion of their battery materials domestically sourced. There are also price caps on qualifying vehicles, and income caps on customers, to prevent federal funds from going to wealthy customers buying luxury vehicles.
The top two most popular vehicles in January were the Tesla Model Y, with 28,833 new registrations, and the Tesla Model 3, at 17,526. Both sold more units than in January 2022, thanks to some steep price cuts in mid-January 2023.
The price of a Model Y dropped $13,000, from $65,990 to $52,990, while the Model 3 got a $3,000 reduction. This particularly affected sales on the Model Y, which jumped 56% year over year, as the vehicle now falls below the $55,000 federal limit for sedans to qualify for the federal tax credit. (Tesla has since raised the price back up slightly to $54,990 as of this writing.)
Tesla also gained ground in January in the luxury segment, growing 34% and surpassing competitors like BMW, Experian reports.
The Chevrolet Bolt EUV was the third most popular vehicle, with 4,928 registrations. That's no surprise, as the Bolt EUV is among the most affordable EVs available, at $28,000 compared to $43,000 for a Tesla Model 3, with comparable range.
Next up: the Volkswagen ID.4, with 4,049 total units sold. For the 2023 model year, Volkswagen moved production of the ID.4 to its Chattanooga, Tennessee, plant in order to qualify for the federal tax credit.
After Volkswagen, Ford claimed the fifth and sixth spots with the Mustang Mach-E (3,286 units sold) and the F-150 Lightning pickup truck (2,918). Both qualify for the federal tax credit, though not the priciest trims of the F-150, which are above the $80,000 limit for trucks.
Kia and Hyundai, makers of the popular EV6 and Ioniq 5, respectively, notably did not make the list of top sellers. Both automakers manufacture their vehicles exclusively abroad, automatically disqualifying them for the federal tax credit.
For all of 2022, electric cars made up 5.8% of all new car sales in the US and 10% globally, according to the Wall Street Journal, up significantly from 2021.
We've yet to find the ceiling on adoption, though several states have targeted completely phasing out gas-powered car sales by 2035. Achieving this will likely require more charging infrastructure and improved range (especially in cold weather), which state and local governments, automakers, and charging companies are working to solve.