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The great EV sales collapse of (January) 2024

As time has passed, it's become clearer what really happened to sales of electric vehicles over the past year:

There was no general slowdown. Rather, sales grew steadily until January 2024, when they suddenly fell off a cliff. Then they continued their usual growth rate.

I have no idea what happened here. There were no big changes in the federal tax credit program. Nor does there seem to have been any other outside event. But there must have been something. Sales don't drop by a third for no reason, and this has never happened in previous years.

Anybody have any ideas?

37 thoughts on “The great EV sales collapse of (January) 2024

  1. Anonymous At Work

    Cybertruck reviews became unembargoed? Chinese EVs came to American markets? It felt like a Tesla saturation point, that everyone buying a Telsa because Musk had already bought one and everyone who was thinking about it changed their mind.

  2. rick_jones

    Sales don't drop by a third for no reason, and this has never happened in previous years.

    Looks like it came close (perhaps 25%) early in 2021.

    1. James B. Shearer

      Do you mean 2020? Going back to the source sales went from 26,391 in January to 11,151 in February and 8,058 in April. This would be more apparent on the graph if Drum had plotted log sales which is more appropriate for exponential growth.

  3. deathawaits

    It was basically all Tesla, Apparently Tesla cut production at some point in 2023. Maybe that caught up to them in Q1 because inventory was low.

  4. Motinda

    From the Tesla perspective folks were waiting for the new Highland Model 3 (already available outside the US) to still be available, and deliveries for the long range version were delayed to Q2 2024.

  5. Austin

    Maybe Crissa took a month off to travel or whatnot, and without her around to positively spin every negative comment about Teslas on the Internet, Tesla sales fell?

    1. LactatingAlgore

      that may be her one hobbyhorse, & quite bad, but i still prefer crissa to unrepentant maga-curious to full-on maga dipshits ruralhobo & jasperinbeijing.

    2. Crissa

      Tesla has been reducing output because Musk is less interested in the task they were completing.

      That and there were changes to the EV tax incentive which cut some models out of the list, just as more models have fallen off it again at the end of this year. Models with major sales to them.

  6. cmayo

    Idk, noise? Sure looks like the overall trend remains unchanged it just got more volatile. Might not even be a reason for it.

  7. MarkedMan

    Just some guesses:
    - Cybertrucks ramped up slowly from November 2023, but are now selling at better than 5K per month
    - However, CT has probably has peaked, as it has been reported that the backlog has been cleared
    - In addition, there were more than a million people who had put down $250 on a CT refundable deposit. I think those people were probably holding tight until they saw what the CT was going to be. In December of 2023 Tesla said that must be converted to a $1K non-refundable deposit. Given that every one of those original depositors now knew what the truck was going to look like and cost, I imagine some number got out and bought a different vehicle, whether gas or electric.
    - Aside from Tesla and Hyundai, in 21-23 the companies selling EV’s were almost exclusively selling super expensive ones, and continued to raise the prices after release. The market for those high end ones may have become saturated
    - In 2024, those same high-priced vehicles started getting whopping discounts, which may have driven sales
    - It will be interesting to see what happens to Tesla and EV’s in general now that they have cleared the CT backlog. All the bad publicity might cut substantially into their future sales, but that may help people like Rivian.

    1. Crissa

      It was a $100 reservation, and the target price they put it down for was a truck the average price of a new truck ($50k).

      They current minimum price is current $80k, which is 33% more than the average new truck ($60k). That's going to reduce the potential demand by quite a bit.

      Musk seems unwilling to sell cars down at the same profit-per-unit as other car companies.

  8. onemerlin

    In a word, Tesla. If you can disaggregate somehow, showing Tesla sales vs. rest-of-EV sales would be illuminating. My understanding of the market is that no one else showed a significant change of trend then; this was a combination of post-Twitter Elon reassessment and the Cybertruck fiasco removing Tesla from being a golden brand and collapsing demand.

    The stock still has a tech premium that it probably no longer deserves, as it becomes a normal car/solar/battery company, with competition in all aspects.

  9. SeanT

    Didn't GM and Tesla cars lose eligibility for federal tax credits starting January 1, 2024 because of battery sourcing rules under IRA?
    so the Dec spike was driven by that and then Jan sales fell because more people bought in Dec?

    1. Crissa

      Yes. The incentives of the LFP Model 3 and the Ultium cars got slashed. They completely go away at the end of this year. On top of buyers waiting for the refreshed Model 3 and now Y, the Bolt production ceased.

  10. NotCynicalEnough

    It looks to me like Tesla was trying to somehow push booked sales into December to finish the year in line with expectations and some of those sales would otherwise have been in January. There is no one more desperate than a salesperson trying to make their quota.

    1. baitstringer

      That was my reaction. There are many businesses -- I used to work in one -- in which every effort is made to book orders by the end of December, which means business appears to fall off a cliff in January.

    1. Crissa

      These are good points! ...it should also be noted that Hertz always sells off cars that are 1-2 years old, so this supply of nearly new to heavily used cars would displace some new sales.

  11. CaliforniaDreaming

    Here's what Google's AI had to say. I don't necessarily think the last few is what did it but the first few seem to be good candidates.

    Electric vehicle (EV) sales in January 2024 dropped due to a number of factors, including:

    Higher interest rates: Higher interest rates mean higher loan payments for buyers, which can reduce demand.

    Loss of federal tax credits: The Mustang Mach-E lost its federal EV tax credits.

    Colder weather: Colder weather can make it more difficult to charge EVs.

    Range concerns: Some consumers are concerned about the limited range of EVs, especially in rural areas where charging infrastructure is lacking.

    Automaker production cuts: Some automakers, like Ford, have cut back on EV production plans.

    Government incentive programs: Some say that government incentive programs are confusing.

    Tesla's Musk: Some say that Tesla's CEO Elon Musk's controversial statements have turned off consumers.

    Rental car companies: Hertz is selling off its EV fleet, which it previously planned to buy heavily into.

    The effects of the Inflation Reduction Act (IRA) are also wearing off after a period of steep EV sales growth.

    1. Crissa

      AI: some truth, some gibberish.

      EV range doesn't affect sales in specific months.

      Also severe weather does affect sales as people can't get to stores and stores can get product delivered.

  12. illilillili

    gas prices were relatively low over around the past 5 years in january coincident with the ev sales drop.

    The average price of a new car dropped about $1500 out of $47k in january, suggesting that ICE cars became a bit cheaper.

    The issue appears to be across many brands, not just tesla. EV inventory seems to have risen significantly, so not a supply problem.

    Tax credit rules did change at the start of 2024.

    1. illilillili

      The spike in december sales may have contributed to the drop in January sales. Seasonally adjusting the numbers or using a 12 month trailing average would smooth out the graph some

  13. Altoid

    Too lazy to look up the timing now but a combination of rebate/tax rule changes, fleet sales, early Musk repulsion, and maybe greater availability of plug-in hybrids could explain a lot of it. I seem to remember more publicity about plug-ins at some point and even major pushback on EVs from Toyota, and if you're EV-curious but a little range anxious and are seeing the tax rules become a little less favorable for EVs, you might opt for plug-in instead.

  14. netsmith

    I bought a new 2023 Chevy Bolt on 30 Dec 23 -- and chose that date because I could get the tax credit on my 23 taxes. The dealer told me that they would not be set up to offer the car in Jan 24 with the direct credit used to reduce the sales price. (Don't know whether that was true or not, but I took the bird in the hand.)

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