- EV sales are on track to hit a new record in Q3, according to new forecasts from Cox Automotive.
- That's despite sluggish numbers from Tesla, which makes up about half of America's EV market.
- Tesla is facing slower sales of its cash cows: the Model Y crossover and Model 3 sedan.
Electric car sales in the U.S. are on track for a record quarter, according to forecasts out Wednesday from Cox Automotive. That’s despite a lackluster performance from industry-leader Tesla over the past three months.
Cox projects 338,844 new EV sales in the third quarter of this year, an 8% increase over the same period in 2023. That figure represents almost 9% of the U.S. car market, the firm says. The new data indicates that although EV sales momentum has slowed down and hit some choppy waters in 2024, the market is very much still growing.
“The story is steady demand, a slower pace, yet record sales,” Stephanie Valdez-Streaty, Cox’s director of industry insights, said during a presentation of the firm’s latest data on Wednesday.
Cox projects 1.3 million EVs will be sold in the U.S. this year, up slightly from 1.2 million in 2023. It revised down its forecast earlier this year from 1.7 million units to account for slower EV adoption and an uptick in hybrid sales.
A couple of factors have helped buoy EV sales this year, Valdez-Streaty said. In August, incentives on EVs hit 13.3% of their average transaction price, 80% higher than the average for traditional combustion vehicles. A loophole allows any model to qualify for the $7,500 federal EV tax credit if the car is leased rather than bought, and that’s boosted EV leasing.
Vehicles that are purchased outright, on the other hand, need to be made in North America, fall under pricing caps and satisfy other requirements related to battery sourcing. Year-to-date, 200,000 EVs have been leased, a year-over-year jump of 148%, Cox said.
Anybody who’s checked out EV lease deals lately will know firsthand how incentives and the tax credit work together to slash monthly payments.
Another bright spot is the used-EV market, which is still relatively tiny but is growing fast. Cox projects that Q3 will be a record quarter for secondhand-EV sales, with some 78,000—or 69% more than in Q3 of 2023—changing hands. There are some great deals to be had there too, as used Tesla Model 3 and Model Y prices especially notch huge year-over-year drops.
High EV prices remain a big hurdle and are still way higher than prices for internal-combustion vehicles. The average EV sold for $56,574 in August, according to Cox.
What about Tesla?
While some other automakers see rising EV sales in the U.S.—just look at General Motors or Kia—Tesla is on track for yet another down quarter. Cox forecasts that Tesla’s U.S. sales will decline 7% on a quarter-over-quarter basis, and 7.3% year-to-date. The firm pegs Tesla’s Q3 sales at 152,829, down from last quarter’s 164,264. Tesla’s sales dropped on a year-over-year basis in Q1 and Q2 as well.
In particular, sales of the Model 3 and Model Y—Tesla’s cash cows—declined in Q3, said Cox senior economist Charlie Chesbrough on Wednesday’s call. Rising Cybertruck pickup sales have picked up some of the slack, he said. Indeed, in Q2 the Cybertruck was the best-selling electric pickup. But since that's a small market filled with high-priced options, it's still only a drop in the bucket.
“However, since Cybertrucks can sell for over $100,000 each, the volume potential for Tesla’s new full-size truck is somewhat limited,” Chesbrough added.
Tesla still sells far and away the most EVs out of any manufacturer operating in the U.S., but its market share is waning as competition heats up. In Q2, Cox Automotive said Tesla’s slice of EV sales had fallen to 49.7%. In August, it had dropped further to 44%.
After years of rapidly accelerating sales, Tesla’s growth this year has been hampered, in part, by a stale product lineup that relies heavily on just two models, industry analysts say. The top-selling Model Y hasn’t received a visual update since it went on sale in 2020, while a recent makeover of the Model 3 sedan was limited in scope. Tesla says new models, including cheaper ones, are on the way. But it hasn’t said what specifically those will be. An uncertain economic atmosphere and more widespread growing pains for the EV industry have likely slowed Tesla’s roll as well.
All eyes will be on whether Tesla can make up for the stagnant quarters and notch a year of overall growth. Since it makes up so much of the American EV market, Tesla’s success also has a big impact on the overall trajectory of EV sales. Still, EV adoption as a whole should continue to climb, especially as more—and, critically, more affordable—models hit the market in the coming months and years.
“As competition continues to heat up for the remainder of the year, brands with the right product, right price and great consumer experience will gain share,” Valdez-Streaty said Wednesday.
Contact the author: tim.levin@insideevs.com
Correction 9/26 4:30 P.M.: An earlier version of this story misstated the forecasted total for EV sales in Q3. It is 338,844, not 388,844. We regret the error.
