For more than a year now, the Industry Insights team at Cox Automotive has been expecting monthly new-vehicle sales to improve. In most of 2022, monthly sales volume was consistently stuck at around 1.1 million units as low new-vehicle inventory levels squeezed sales. Inventory has improved notably, and new-vehicle sales are increasing. Inventory volume in Q1 was up by 70% compared to the same timeframe last year. And what do we know about higher inventory? It often leads to higher sales.
Electric vehicle inventory—and choice—expanded notably in Q1 as well. A year ago, there were 34 electric vehicles to choose from. This year, the number jumped to 42, and choice is expected to expand further in every quarter of 2023. One note, the 42 count includes the GMC Hummer EV—2 were sold in March—and the Mazda MX-30, which is sold only in select markets and chalked up volume of 15 in Q1. Vinfast, a new player on the field, has also now been included.
Counting all EVs, including Hummers and MX-30s, the Kelley Blue Book team estimates EV sales in Q1 increased by 44.9% year over year and reached 258,882, a record quarter for the U.S. market. With Q1 in the books, the U.S. market is on course for annual EV sales to surpass 1 million for the first time in 2023, as predicted by Cox Automotive analysts this past December.
Tesla led the way in Q1, helped by sizeable price cuts. Tesla sales were up 24.6% year over year, and the EV pioneer continues to be both the industry’s top-selling luxury make and EV make by far. Tesla’s share of the EV market fell to 62.4%, down slightly from its full-year result in 2022—64.2%—and down significantly from the nearly 79% share Tesla commanded in 2020. Still, a 62% share of the EV market makes Tesla “the market.”
Chevy Bolt sales in Q1 were strong, placing the bowtie brand a distant No. 2 in EV sales; Ford was third. And interestingly, despite solid, popular products from both Hyundai and Kia, EV sales from the brands decreased last quarter. On the luxury side, Audi, BMW and Mercedes all posted strong year-over-year sales growth thanks to excellent new offerings.
New tax incentives pushed by the government are certainly spurring interest, and some confusion. But EVs continue to be the talk of the industry. Overall, the Cox Automotive team believes EV sales growth will outpace industry growth for the foreseeable future. EV share in Q1 hit 7.2% of new-vehicle sales, which is also a record. Many analysts talk about tipping points in the industry when volume quickly accelerates. Considering automaker investments and future product plans on the table, that tipping point may well be fast approaching, if not already here.