Despite the tough months ahead for the auto industry’s sales of electric vehicles have been rising, whereas almost all other categories are falling.
U.S. electric vehicle sales rose 76 percent in the first quarter, which was enough to double EVs’ share of the market to 5.2 percent, up from 2.5 percent in the first quarter of 2021, according to Kelley Blue Book.
Overall sales of new cars & trucks fell 15.7 percent in the quarter. This was because automakers had to deal with shortages of critical supplies like computer chips, which led to slowdowns.
EV advocates are encouraged that EVs are moving closer to mainstream in the U.S. market. This is vital if the country wants to reduce its emissions from transportation. Notably, the strong results in the first quarter came before the Ford F-150 Lightning pickup’s mass production, which was the most anticipated EV launch of the year.
Matthew Degan, editor at Kelley Blue Book, and Autotrader, stated that reaching 5% market share is a significant milestone. “This is just the beginning” of the ramp-up in EV sales, he told me.
But I don’t want to overstate the significance for the entire EV category, since the strong results were largely because one company—Tesla—had an incredible quarter. Tesla continues to grow and has been innovative in finding ways to avoid delays caused by parts shortages.
Even with strong financial results, Tesla’s share price took a beating on Tuesday because of investor concerns about how CEO Elon Musk’s plan to buy Twitter Inc. may affect the automaker. Tesla lost approximately $120 billion in market capitalization in just two days.
The Model Y, Tesla’s top-selling EV, was sold 71,358 units in the first quarter. This is an 89 percent increase over the previous-year quarter. Of all the EVs sold in the United States during the quarter, 41 percent were the Model Y—more than all of the non-Tesla EVs combined. The Tesla Model 3 came in second place with 46 707 vehicles sold, a rise of 126 percent.
Tesla has been more agile than its peers in finding workarounds for parts shortages, particularly of computer chips. To accommodate new suppliers of computer chip chips, the company rewrote its software. Automotive NewsReports. CNBC reported that the company has modified some of its designs in order to eliminate the need to use chips.
Tesla’s success is pulling up the entire EV category, while progress by other automakers is more modest.
However, competition is only going to get fiercer.
Ford held a launch event Tuesday to mark the beginning of mass production of the F-150 Lightning at the company’s flagship Rouge assembly complex in Dearborn, Michigan.
“Whenever the world needed us, we met the moment with American ingenuity and American muscle,” Ford President and CEO Jim Farley said at the event. “And right now, the world needs zero-emissions vehicles, and more importantly it needs us to bring them to the many, not just the few.”
Ford claimed that customers have already made 200,000 reservations. Ford is currently playing catch-up to meet demand. Some customers may not see their orders fulfilled until late in the year or 2023.
Other automakers have also taken a more aggressive approach to EVs.
The Hyundai Ioniq5 ranked fifth in the EV top-seller chart with 6,244 sold units. The Kia EV6 ranked sixth with 5,281 sold units. These models were released last year, and received positive reviews.
With some overlap in ownership, Hyundai and Kia are South Korea’s largest automakers. Both companies are currently working together to develop electric vehicles. Hyundai has developed a battery- and motor system that will be used in both new models.
Degan stated that the Ioniq5 & EV6 are EVs that a typical purchaser of a new car can afford. Prices start at around $40,000 before tax credits. Each model is eligible in part for a $7.500 federal tax credit.
“Not everybody can afford to pay the price for a Tesla,” he said. The Model Y starts at $62,000, for instance.
There have also been some disappointed performers. Among them is the Volkswagen ID.4, the first model from the company’s ID line of electric vehicles to be sold in the United States. With 2,755 sold ID.4, the ID.4 was 11th in the best-sellers list.
Despite lots of talk about the potential of the ID line and some good reviews, sales of the ID.4 have suffered because of Volkswagen’s difficulties obtaining parts. Among the challenges, the production of the vehicle slowed down because the company couldn’t get parts from a supplier in Ukraine, a spokesman said.
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The F-150 Lightning should be available in greater numbers in the second half of the year. Tesla should also continue to increase its production at new plants, such as the one in Texas, which opened this month. And many new models are scheduled to go on sale, including crossover SUVs from major brands: the Nissan Ariya and the “near-twin” models jointly developed by Subaru and Toyota, the Subaru Soltera and the Toyota bZ4X.
But since most of the growth is coming from Tesla, I’m going to give Musk the last word on the topic of his company’s ambitions.
“We only crossed 1 million units in the past 12 months recently,” said CEO Elon Musk about global production, in an April 20 presentation about Tesla’s first quarter financial performance. “We aspire to head to 20 million units a year. So, we’re basically 5 percent along the way towards our goal. And we are growing very, very rapidly year-over-year.”
This week, there are other stories about energy transitions you should be aware of:
Washington State will require electric heating in buildings code update:Washington is the first state to adopt rules requiring all-electric heating and water heating for new commercial and multifamily buildings. The Washington State Building Code Council voted 11-3 to add the requirements to the state building code that will go into effect in 2023, as Tom DiChristopher reports for S&P Global Market Intelligence. “A strong energy code is a critical tool to ensure buildings are part of the climate solution, and Washington’s new energy code can be a model for other states,” Rachel Koller, a coordinator for Shift Zero, a building decarbonization advocacy group, told S&P.
Major Manufacturers Fail to Invest in Wind Energy IndustryThe demand for wind turbines continues to grow, but turbine manufacturers are having trouble turning this soaring demand into profits. Companies such as Vestas Wind System A/S, General Electric Co., and Siemens Gamesa Renewable Energy SA face financial pressure on many fronts. Josh Saul, Ryan Beene and Will Mathis report for Bloomberg Green. The rising cost of raw materials and the pressure from buyers to lower prices are causing companies to struggle. “What I’m seeing is a colossal market failure,” said Ben Backwell, CEO of the trade group Global Wind Energy Council, about the mismatch between government targets for new wind power and what’s happening in the market.
Despite assurances that carbon captured is safe, the states are shifting long-term liability to public:Four states have passed laws that allow companies to transfer responsibility for projects to state governments, as they explore various carbon storage projects. Three other states have similar statutes, which were enacted years ago. As Nick Kusnetz, my colleague for ICN, reports, environmental advocates fear these states are setting a dangerous precedent. “Statutes that relieve operators of liability without due regard to existing legal principles create an incentive for sloppy management, leaks and public opposition,” said Scott Anderson, senior director of energy transition at the Environmental Defense Fund.
A new federal proposal would task grid operators, states and utilities with planning a grid that can support clean energy:The Federal Energy Regulatory Commission approved a plan that requires owners of interstate power lines in order to create new ways of planning large projects and sharing costs. Jeff St. John reports that the goal is to create a grid that can handle the transition from increased renewable energy use. The notice of proposed rulemaking has been issued by the commission. This allows interested parties to make comments and suggest revisions before a final vote, which could take place before the end the year.
Florida’s DeSantis Vetoes a Closely Watched Anti-Solar Bill:Florida Governor. Ron DeSantis, a Republican, vetoed legislation that would have decreased the financial benefits of rooftop-solar. DeSantis, a Republican, vetoed a measure that had passed the Republican-controlled Florida Legislature and was a top priority for the state’s largest utility, Florida Power & Light, as Christie Zizo reports for WKMG News 6. DeSantis stated that he couldn’t support a bill that would have imposed additional charges on customers, at a time when many families are struggling to afford gasoline and groceries. The veto is a blow for utility companies who have tried to limit rooftop solar’s growth, and a victory to the solar industry which considers Florida one of its most important growth areas.
Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to email@example.com.
Source: Inside Climate News