Chart: EV sales on pace to break 1 million in US this year

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.

The electric vehicle revolution is well underway in the U.S., but the country still has a long way to go in order to meet state and federal targets for decarbonizing transportation.

Electric vehicles and plug-in hybrids have skyrocketed in popularity in the U.S. in recent years (despite a Covid-induced dip in 2020). In 2022, 928,884 of them were sold in the U.S. — an annual record. That trend only accelerated in the first quarter of 2023, when almost 300,000 EVs and plug-in hybrids were sold, accounting for a record 8.4 percent of all U.S. new car sales. That’s nearly as many as were sold in all of 2020. 

If sales continue at the same pace throughout 2023, the U.S. will surpass 1 million new EV units sold for the first time this year — a milestone Cox Automotive predicted in late 2022.

But despite the recent spike in uptake, EV adoption will need to grow even faster to keep up with climate goals.

The Biden administration has set a target for half of all new vehicles sold in 2030 to be electric, and even more ambitious mandates have been set by California, Massachusetts and New York for all new cars sold to be electric by 2035. Additionally, the U.S. Environmental Protection Agency’s newly proposed auto emissions rules could, if adopted, impose strict emissions limits on automakers that would further incentivize EV sales.

The Inflation Reduction Act aims to speed up EV adoption to achieve climate goals. Specifically, the law extended the $7,500 federal EV tax credit through 2032 and removed the previous cap that limited the tax credit to 200,000 units per manufacturer. But it also made the incentives a lot harder to qualify for: To get the full credit, EVs must be partially assembled in North America and made with a certain percentage of materials from the U.S. or its free-trade partners. As a result, only around 10 models are currently eligible for the full tax credit, and about seven others qualify for half, per guidance released by the Treasury Department this week.

Among the models that qualify for the full $7,500 credit are several of the bestselling EVs in the U.S., including Tesla’s Model Y and Model 3, the Chevrolet Bolt and the Ford F-150 Lightning. Tesla still dominates the EV market with a 62 percent share, and trailing far behind is General Motors, which pushed ahead of Ford to become the No. 2 seller of EVs this year. While the list of models that qualify for tax credits is relatively slim at the moment, it is expected to expand as the U.S. and free-trade partners ramp up domestic EV-manufacturing capacity.

Meanwhile, those whose buying choices are unconstrained by potential discounts now have a record 42 EV models on the market to choose from. For most buyers, however, the tax credits are likely to be influential — a recent Associated Press poll found that cost is the No. 1 barrier for people when considering an EV. Other perceived barriers include charger availability and skepticism around battery tech. All of these challenges contribute to the fact that less than half of Americans expect to make the switch to electric with their next car purchase, per the poll.