The U.S. Energy Information Administration (EIA), has reported that, in the first quarter of 2024, the share of electric and hybrid vehicle sales in the United States fell to 18.0%, from 18.8% in the previous quarter, driven primarily by a decline in battery electric vehicle (BEV) sales from 8.1% to 7.0%.

Source: EIA

Seasonal market trends

The U.S. light-duty vehicle (LDV) market is highly seasonal, typically leveling off in the first quarter. Despite a 7% year-over-year growth in BEV sales in 1Q24, the growth rate has slowed after 13 consecutive quarters of double-digit gains.

Factors behind the decline

The slowdown in BEV sales growth can be attributed to:

1. A greater decline in luxury vehicle sales compared to mass-market sales.

2. A significant drop in mass-market BEV sales.

BEV popularity in luxury segment

According to EIA data, BEVs remain popular in the luxury vehicle segment, with luxury BEVs making up 8 out of 10 BEV sales. Despite the overall market shift, luxury BEVs have maintained about one-third of luxury LDV sales.

U.S. luxury vehicle sales varied between 12% and 15% of the overall LDV market between 2014 and 2020 but grew to reach 18% in 2023. Luxury vehicle sales returned to pre-pandemic levels in mid-2022, but mass-market vehicle sales have remained 10% below pre-pandemic levels as of this quarter. This uneven recovery contributed to the rise in BEV sales share in 2022 and 2023. In 1Q24, the trend reversed as luxury vehicles fell to 16% of the market. Further return to the pre-pandemic luxury and mass-market split may continue to slow BEV sales growth in the absence of new mass-market BEV models.

Mass-market bev struggles

BEV sales have not performed as well in the mass-market segment as they have in the luxury segment in the United States. Total U.S. sales of mass-market LDVs declined by 1.0%, and total mass-market BEV sales fell 17.9%, reducing the market share of BEV models from 2.2% in 4Q23 to 1.8% in 1Q24. Manufacturers have released mass-market BEV models and increased production capacity over the past couple of years, but the halt in Chevrolet Bolt prod

Price trends

The average transaction price for BEVs fell by 3.8% compared to the previous quarter and by 9.0% year-over-year. BEV prices remain higher than the overall industry average but lower than luxury vehicle averages.