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US EV market would grow 33pc in 2024 if Tesla's effect is discounted, consultancy finds
The unfolding demand slowdown for US EVs is driven by a sharp decline in growth for Elon Musk-led EV pure play Tesla, according to consultancy Cox Automotive's Q1 industry outlook.
Cox is projecting 15pc year-on-year growth in US new BEV sales for the first quarter of 2024, a relatively healthy forecast compared to, for example, Bloomberg NEF's prediction of 9pc growth for full-year 2024.
Compared to year-on-year growth in Q4 2023 of 38pc, however, even when accounting for the fourth quarter's seasonal strength, paints a picture of a slowdown which Cox attributes primarily to faltering Tesla sales.
"Looking at the data, the EV slowdown is shaping up to be a Tesla slowdown," says Stephanie Valdez Streaty, industry insight director at Cox Automotive. "Growth for Q1 is estimated at 15pc. However, if you take out Tesla, the growth is 33pc," she continues.
But while Cox expects 15pc growth for the first quarter, the consultancy warns of potential sequential volume decline compared to the 302,000 BEVs registered in the US in Q4 of 2023.
"It is possible that the industry might post its first quarter-over-quarter decline since 2020. As the numbers show, there is still EV demand, but market challenges exist," Valdez Streaty says.
The effect that a slowdown in Tesla sales could have on the entire US EV market shows the level to which greater competition is needed if US EV sales are to continue growing. Indeed, such growth deceleration is the price the industry must pay for Tesla being responsible for 52pc of US sales in 2023, according to Cox data.
In Q1 Cox forecasts Tesla to grow its US sales by only 3.2pc year-over-year. "Meanwhile some brands are forecasted to see over 50pc increase in EV growth, such as Audi, BMW, Mercedes, and Rivian," Valdez Streaty says, albeit all are beginning from a lower starting point.
Cox also points out that greater competition's most immediate effect will be continued acceleration towards ICE price parity during Q1.
"With more competition and the decline in battery prices, we should see continued movement to price parity between EVs and ICE vehicles," Valdez Streaty says.
EV transaction prices in February were 12.8pc lower year-on-year, Cox finds. The disparity in sticker price between EV and ICE is also shrinking rapidly, the firm says, with the average new EV in February 2024 costing $52,314, compared to $46,997 for a new ICE vehicle.
Tesla recently raised prices on all its Model Y variants, bringing the base version to $44,990.
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