The third quarter of 2024 saw an increase in the sale of new electric vehicles in the United States compared to the previous quarter. However, the market share of EVs in the light-duty vehicle market decreased from 7.4% in Q2 to 7% in Q3. Despite this dip, both sales and market share are higher than in Q3 of 2023.
The overall share of electrified vehicles, including hybrids, plug-in hybrids, and EVs, saw an increase last quarter. This growth was primarily driven by the rising popularity of non-plug-in hybrids, which accounted for 10.8% of the entire U.S. LDV market – a new record according to the Energy Information Administration (EIA).
Tesla continues to dominate the market with a 48.8% share, followed by General Motors, Hyundai, and Ford. The majority of EVs purchased in the U.S. in Q3 were made in North America (78.9%), with a smaller percentage coming from South Korea (7.3%) and Germany (5.3%).
The surge in American-made EVs can be attributed to the Inflation Reduction Act, which revised the requirements for EVs to qualify for the $7,500 federal tax credit. The new regulations mandate that eligible EVs must be manufactured in the U.S. with specific sourcing criteria for battery components and minerals. However, these restrictions do not apply to leased vehicles, creating a potential loophole.
Luxury EVs accounted for 70.7% of purchases in Q3, although this is the lowest level recorded since Q2 of 2017. The lack of affordable EV options in the U.S. has resulted in an average price of $56,351 for new EVs before incentives, which is 16% higher than the national average.
Despite the decrease in market share in Q3, overall EV sales in 2024 have surpassed those of 2023. Ford, in fourth place for EV sales this year, experienced a record-breaking November with a 21% year-over-year increase in sales.
Honda also saw strong sales towards the end of the year, selling over 6,800 Prologues in November – a 66% increase from October. The GM-built Prologue has sold over 25,000 units from January to November, ranking among the top five best-selling EVs in the country.
As the year comes to a close, some automakers are experiencing a boost in sales. The impact of high prices and stricter federal tax credit rules on EV sales will be closely monitored. With a new administration less favorable towards EVs and foreign imports, the EV market in 2025 is poised for further evolution.