Electric Vehicle Sales Surge in First Half of 2021
EV Sales Increase Outpaces Industry
Electric vehicle sales rebounded in the first half of 2021, with EVs selling at a faster rate than the industry average. For the first six months of the year, EV sales more than doubled while total vehicle sales increased 29%. Tesla (TSLA) was the main driver of the uptick, with its US sales increasing 78% through the end of June. Tesla’s Model Y crossover SUV, which debuted last year, is particularly popular among consumers. Also driving the growth were Ford (F) and Volkswagen (VWAGY) which saw brisk sales of their EVs during the first six months of 2021. EVs accounted for 3% of the US vehicle market in both May and June—a record for the industry.
Auto Companies All In With EVs
Auto companies are doubling down on the electric vehicle market, collectively spending more than $300 billion in the next five years to develop more EVs. Last week Daimler (DMLRY) said it is spending $47 billion to prepare for all EVs by 2030. The vehicle manufacturers are betting that longer ranges between charges, a variety of vehicle types, and different price points will spur more interest in EVs.
Industry executives also point to the Biden administration’s plans to invest in charging stations and provide consumer incentives to purchase EVs as other drivers of growth. A lack of charging stations is one of the biggest hurdles the EV market needs to overcome.
EVs Nearing a Tipping Point
EVs still make up a tiny portion of total US sales but the shift is gaining speed as consumers become more comfortable with the technology and worry more about climate change. A recent survey of US consumers found 37% would buy an EV—up from 22% in 2020.
When Daimler announced its plans to sell only electric vehicles by 2030, CEO Ola Källenius said interest in EVs, particularly in the luxury segment, is increasing. He said the tipping point is near and Daimler wanted to be ready. That seems to be the case with the other vehicle manufacturers as they pour hundreds of billions of dollars into the EV market. It will be interesting to see if their bets pay off.
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