Despite all the ideological and political divisions surrounding electric vehicles, Americans are driving home battery-powered vehicles in droves.
However, things are looking rather bleak on the other side of the Atlantic. Staunch opposition to Europe's proposed emissions regulations, a trade war with China and some major hiccups from homegrown automakers like Mercedes-Benz, Volkswagen and Stellantis are slowing EV adoption in the continent.
This kicks off the Friday edition of Critical Materials, your daily dose of news and events shaping up the future of road transport.
Also in today's newsletter: the Volkswagen Group is gearing up to face backlash from dealers after Scout Motors announced a direct-to-consumer sales strategy on Thursday. Plus, there are now 200,000 public charging ports in the U.S., a milestone moment for the bumpy road to broader electrification.
30%: U.S. EV Sales Overtake Europe In Q3
When you isolate yourself from the deafening political noise around electric cars and the terrible headlines in financial papers, things start appearing more clear.
Americans are driving home battery-powered cars in droves. They're purchasing more EVs than buyers in Europe, which has over the years been friendlier to EVs but has now run into some troubles. In some ways, though, this is a reversion to the natural order: The U.S. market had about 3 million more sales last year than the EU market, so our market is considerably larger. That it lagged behind Europe in EV sales for so long was a sign of higher consumer resistance, among other factors.
Automakers in the U.S. sold a record 344,000 electric cars in the third quarter, according to data analytics firm New AutoMotive. That's almost at par with Cox Automotive, which estimated 346,309 EV sales in the country between July and September.
While EV sales are growing in Europe too, the pacing is slowing down. Here's more from that report, according to Motor Finance Online:
Ben Nelmes, CEO of New AutoMotive, commented on the global EV market, noting that while EV sales continue to grow worldwide, Europe risks losing its position in the race to electrify transport.
“Europe is falling behind the US as sales growth lags, and policymakers consider rolling back emissions regulations,” Nelmes said. He also pointed to cuts in incentives and the introduction of tariffs as factors slowing European sales growth, but stated that these obstacles will not prevent the continued rise of EVs.
“The key question is whether Europe chooses a slow transition, or whether it stays on course, attracting jobs, growth, and investment in clean vehicle manufacturing and making cheaper, cleaner transport accessible for all,” he added.
EV sales are still growing in Europe. Belgium, Denmark, Italy, Norway and Portugal all witnessed 30% year-over-year growth in September, as per the report. Hungary, Netherlands and Spain witnessed over 50% growth. But Germany, Europe's largest car market, has been dragging the market down.
The country's EV registrations were down 28.6% in September, according to the European Automobile Manufacturers’ Association.
Alarm bells are ringing from German automakers like Mercedes-Benz and Volkswagen. I've never been a fan of Mercedes' jellybean-shaped EVs and it seems like I may not be alone here. In the third quarter, Mercedes-Benz saw a 31% drop in its EV sales compared to the same period last year, partly due to increased competition from Chinese EVs.
Volkswagen is also struggling in the continent, as it is considering historic plant closures due to waning demand for its EVs and to reduce costs. However, BMW and Volvo are bright spots whereas Tesla continues to dominate the EU market, with the Model Y estimated to be the continent's best-selling EV in September.
In the U.S., it feels like things are just getting started for broader EV adoption. Tesla sales rebounded in the third quarter on the back of the Cybertruck and the refreshed Model 3 whereas General Motors is staging a solid comeback thanks to models like the Chevy Equinox EV and the Cadillac Lyriq.
The report adds that EV sales will continue rising in Europe, but the growth rate will depend on how automakers like Stellantis, Volkswagen and Mercedes-Benz navigate their problems and how the regulatory framework takes shape as some of Europe's biggest lawmakers are attempting to weaken its proposed 2035 gas car ban.
60%: The VW Group Expects Dealer Backlash To Scout's Direct Sales Approach
The Volkswagen Group resurrected the iconic Scout Motors brand yesterday in Nashville. Scout Motors showcased two retro-modern electric cars, the Traveler SUV and the Terra pick-up truck that will be offered as both battery electric vehicles and extended-range hybrids. And Scout plans to adopt a direct-to-consumer sales approach, similar to Tesla and Rivian.
That could draw legal action from national and state dealer associations, according to Automotive News:
John Devlin, Automotive Trade Association Executives’ 2024 chairman and CEO of the Pennsylvania Automotive Association, told Automotive News in an Oct. 8 interview that dealers remain perplexed by the lack of communication from Scout and VW, as well as Honda Motor Co. and its Sony Honda Mobility joint venture.
Devlin has been in regular contact with the National Automobile Dealers Association on the matter, adding “they have done as much as they can to get responses out of them.” Devlin said dealers are ready to partner with Scout.
“Assuming they take this other path, let’s face it, there’s going to be challenges and problems for them virtually everywhere across the country,” Devlin said. The ad suggested dealers are willing to pursue legal channels if Scout attempts to sell directly to U.S. consumers. “My counterparts around the country are not just going to roll over,” Devlin said on Oct. 8.
Cutting out dealers could be a big win for consumers as my colleague Kevin Williams outlined in a story yesterday. We've seen reports of EV buyers with frustrating dealership experiences due to poorly informed staff and ambiguity around pricing.
That's a shame, especially at this critical juncture in the EV transition, which is a steep educational curve for buyers as they learn how to charge EVs, how to maintain them and how much all of that is going to cost. If dealers don't help answer those questions, automakers can do that job themselves as Tesla, Rivian and Lucid all have for years now.
90%: The U.S. Now Has 200,000 Public Charging Ports
The U.S. government's Joint Office Of Energy And Transportation announced this week that the country now has 200,000 Level 2 and DC public charging ports nationwide.
The effort is largely led by Tesla and other private companies like Electrify America and EVgo who have received millions of dollars in government incentives under the Inflation Reduction Act and the Bipartisan Infrastructure Law to establish charging stations across key transport and traffic corridors.
While this is a milestone moment, the charger growth is uneven across states. According to the Alternative Fuels Data Center, California now has nearly 50,000 public charging ports, followed by New York in the second spot with over 15,000 connectors. Texas and Florida also have over 10,000 ports each.
However, several states in the industrial Midwest, Northwest, Northeast and parts of the South still have only a few hundred public charging ports each. The U.S. Department of Energy estimates that the country will need tens of millions of additional chargers across various types to meet demand by the end of the decade.
So even though 200,000 connectors is great, there's still a long way to go to cure charging anxiety permanently.
100%: Is Bypassing Dealers A Good Thing?
Do you think Scout Motors' decision to leave dealers out is a good thing? The Volkswagen Group already has an established dealer network in the U.S., and members of that network have indicated that they'd be happy to sell Scout EVs. However, the brand indicated that it would cut dealers out completely. Will this help make the buying process transparent and hassle-free? Leave your thoughts in the comments.
Have a tip? Contact the author: suvrat.kothari@insideevs.com
