What’s really happening in the US EV market?

The confusion comes from conflating two different claims. On the data, 2023 was a good year: EV sales rose roughly 50% to about 1.45 million from about 971,000, counting battery and plug-in hybrid vehicles together, and share of new sales went from about 2% in 2019 to 4.5% in 2021, 7.5% in 2022 and about 9.5% in 2023. Overall auto sales also recovered, so EVs gained share in a rising market rather than a shrinking one. Cantor does not wave away the negative signals. In preliminary monthly data only October and November dipped, and December was the strongest month of the year; specific models did sit on dealer lots for 100 to 150 days against about 70 for the average car, which he says is worth taking note of. What he objects to is the arithmetic behind the pile-up stories, which typically exclude Tesla, Rivian, Lucid and the other EV-only makers and so leave out roughly half of sales. His framing of the real question is that expectations of EV growth have changed, not that sales have fallen.

What the reporting was reacting to was forward-looking announcements, and those were real. The problem is that they resolve into company-specific stories rather than a market-wide demand signal. Ford grew from about 60,000 EV sales in 2022 to about 72,000 in 2023 with only two models, one of them four years old. GM sold about 76,000, but roughly 80% of that was the Chevy Bolt, which it then discontinued, while the Ultium battery platform meant to replace it had not ramped and the Blazer drew a stop-sale over software problems. Stellantis had a genuinely successful plug-in hybrid in the Jeep Wrangler and no full battery electric vehicle until later in 2024. Tesla’s difficulty is a different one: Cantor says its challenge is not scale-up, since the Model Y was on Tesla’s account the best-selling vehicle in the world at about 1.2 million deliveries, but that it went four years between new volume models while the 3 and the Y aged. That is the sense in which Tesla is not the counterexample Kann suggests it might be. It is not evidence of weak demand; it is a second company with a product pipeline problem, which is why so much rides on whether Tesla ships a mass-market car.

None of that makes the outlook comfortable, and Cantor says so. BloombergNEF’s 2024 base case is 32% growth, with Cox Automotive at about 35%, and he allows that the critics are correct in some respects that a slowdown is coming. Part of it is mechanical, since a larger base grows more slowly, and part of it is the production pullbacks and model delays feeding directly into the forecast. The constraint he thinks the press has missed entirely is price. On BloombergNEF’s price-volume work, getting vehicles below roughly $35,000, or into the $36,000 and under range, unlocks about half of US new passenger car sales, on the order of seven million units against a market that swings between 14 and 16 million a year. Above that, each year’s gains have to come out of a shrinking premium segment, which is the segment a $50,000 to $60,000 electric pickup sits in. It is why he keeps returning to whether anyone ships a car in the low thirties or high twenties, and to whether Rivian can bring the R1S from $70,000 down to $60,000.

Charging is the other unresolved constraint, and Cantor is careful about what the evidence shows. Asked directly whether limited charging is holding back demand, he answers with stated consumer concerns rather than a demonstrated causal link: a Cox Automotive survey put upfront cost first and charging second, with roughly 39% of those surveyed reporting problems with public charging. What he is unambiguous about is the buildout itself, which went backwards. Public charging connector installations fell from about 41,000 in 2022 to about 27,000 net in 2023, against roughly 800,000 in China, and only 4% of the $5 billion in federal NEVI money had been awarded, where awarded still does not mean built. He notes that cold weather is a common explanation and not a sufficient one, since Norway is cold and around 90% of its new car sales are electric. His closing position is that there is reason not to take the headlines at face value and also a long way to go, and that the companies which execute on manufacturing and charging in the next couple of years could hold major share for the rest of the decade.