No one said electrifying the auto industry was going to be a smooth ride.
Electric vehicle sales got off to a slow start in 2024, with some some automakers — namely EV pioneer Tesla — seeing their sales momentum reverse.
After the country eclipsed 1.2 million EV sales in 2023, new plug-in vehicle sales increased about 3% year-over-year during the first three months this year — a far cry from the 47% growth the sector saw during the same time last year. First quarter EV sales declined 15% compared to last year’s fourth quarter, according to data from Cox Automotive. The end of the year is typically a peak period for auto sales.
The soft first quarter comes amid renewed concern that not enough Americans are ready to switch to EVs despite billions of dollars of private and public investment.
“As we move into this mainstream adoption, it’s going to get hard,” said Stephanie Valdez-Streaty, director of operations management at Cox Automotive.
However, there’s one segment of the EV market that continues to accelerate, and Atlanta is among the cities giving it some juice.
Used EV sales in January increased nearly 70% compared to the same month last year, according to Cox Automotive, and data from online used car platform Carvana shows metro Atlanta outpaced the rest of the country when it comes to trading gas guzzlers for used EVs.
Credit: Carvana
Credit: Carvana
During the first three months of this year, Atlanta’s EV sales mix on Carvana was 15% higher than the national average. So far in 2024, more than 90% of Atlantans who bought an EV through Carvana traded in an internal combustion engine vehicle.
Christina Keiser, Carvana’s executive vice president of strategy, said EVs are poised to make up a significantly larger portion of used car sales in the coming years, even if new sales start to stagnate. She added that many of consumers’ hesitations with EVs, such as a lack of charging infrastructure and range anxiety, will decrease with time as more people get exposed to the technology.
“More EVs on the road begets more EVS on the road as people get comfortable with what ownership looks like,” Keiser said.
Georgia’s EV stake
In Georgia, exposure to EVs and electric battery technology has become commonplace.
Since 2018, the Peach State has announced 53 EV- and battery-related projects with a promised $27.3 billion in combined investment. This includes multiple multi-billion manufacturing facilities alongside dozens of parts suppliers.
Automotive data firm S&P Global Mobility reports that about 8.3% of Americans had EVs at the end of 2023, with Georgia lagging at 6%. Valdez-Streaty said Georgia ranked 20th among states in EV adoption because a handful of states like California account for the largest portion of EV owners.
Concern about lagging EV adoption has been boosted by partisan disagreement over the electrification of auto travel.
Donald Trump, the GOP’s presumptive presidential nominee, has attacked EVs while on the campaign trail against President Joe Biden, whose administration has spent billions of dollars to encourage EV adoption. However, the polarized discussion around vehicle types has led to increased focus on a middle group: hybrids.
Multiple automakers, including Ford, reported increased hybrid sales during this year’s first quarter. Officials at Hyundai Motor Group are considering incorporating hybrid production into its $7.6 billion Metaplant in Coastal Georgia, a factory previously slated to manufacture only EVs.
EV investment has also slowed down, with Ford delaying a new electric pickup model and postponing plans for an electric SUV, Tesla seeing less sales demand and several EV startups struggling to gain market share. Fisker is reportedly considering bankruptcy, Lucid Group is focusing on cutting costs and Rivian indefinitely delayed construction on its planned $5 billion Georgia factory to focus on shoring up its balance sheet.
Cox Enterprises, the owner of The Atlanta Journal-Constitution and Cox Automotive, also owns a 3% stake in Rivian.
‘More sales muscle’
Carvana ran a survey that found nearly half of Atlantans intend for their next vehicle purchase to be either a hybrid or all-electric.
In February, the average new EV sold was about $52,000, roughly a $5,000 premium over gas-powered vehicles, according to Cox Automotive data. That price gap is narrowing, but Keiser said lowering EV prices — both new and used — along with offering a wider variety of vehicle types will help seal the deal for many considering making the switch.
“That accessibility and affordability question is going to be front and center in whether they actually act on that intention,” Keiser said.
Valdez-Streaty said there needs to be “more sales muscle” and education efforts to increase EV adoption. Thousands of car dealerships across the country have signed public letters urging the Biden administration to pump the brakes on increasing EV incentives and implementing new tailpipe emission regulations, citing concerns about sales lots cluttered with unsold EVs.
Cox Automotive still predicts EVs will make up 10% of all new vehicle sales by the end of 2024, up from 7.6% last year.
“We’re going to see more sales,” Valdez-Streaty said, “but not at the growth pace we’ve seen historically the last couple of years.”
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