Was 2018 as Good a Year for Electric Vehicles as They Say?

Supporters of battery electric vehicles (EV and/or BEV) are rapturous about the 81% increase in electric vehicles sold in 2018 compared to 2017.  This table shows the breakdown, with a total of 361,307 vehicles sold in the US in 2018, compared to 199,826 sold in 2017.

We should add a disclaimer.  We love electric-powered vehicles.  We’d like nothing more than to get a fully loaded Tesla, and, failing that, just about any other electric vehicle.  They are a wonderful concept, and promise all sorts of enormous benefits to all sorts of things as they become more widely adopted.

But, we’re also realists.  And the 2018 numbers are – while accurate – also close to meaningless in terms of describing the state of the EV marketplace.

Ignore Irrelevant Hybrid Sales

The first adjustment that is needed is to recognize the difference between hybrids, like the well-known Toyota Prius, and true electric vehicles.

Sure, the concept of a hybrid, and getting more miles per gallon of gas is a great thing, too, and not to be sneered at, but such vehicles will struggle to get you out of your driveway before they start burning gas.  They are also a mature technology – the first Prius came out in 1997, and the first hybrid patents date back to 1889.  They are no longer as transformational as are fully electric vehicles.

Our focus is on true electric vehicles that never go near a petrol pump.

If we actually look at true, independent, fully battery-electric powered vehicles, the 43 vehicles listed in the linked table reduce down to 14 vehicles.  But the numbers then show a much more exciting leap in sales, from 100,442 in 2017 to 217,984 in 2018, a more than doubling of vehicles sold.

That seems like a good thing as an indicator of the growing relevance of electric vehicles.  But the numbers include a massive distorting factor.  This relates to the Tesla Model 3, which first started to be delivered late in 2017, and sold only 1,764 units in 2017, compared to its extraordinary sales of 139,782 units in 2018.  If we remove those sales, we find the totals for 2017, for all other electric vehicles, are 98,678 vehicles and 78,202 for 2018.

And doesn’t that show a different picture – if it weren’t for the Model 3, electric vehicle sales would have actually dropped by almost 20% from 2017 to 2018!

If we look at the most popular electric vehicles (ones that sold more than 1000 units in either 2017 or 2018, other than the Model 3) we see this

Of the ten vehicles listed, seven had reduced sales in 2018 and only three experienced increased sales.

The Impact of the Tesla Model 3?

We’ll concede that maybe the Model 3 has sucked some of the sales away from other vehicles, but that’s only a partial explanation, and a very weak one at that.  People started pre-ordering Model 3’s back on 31 March, 2016.  Hundreds of thousands of people promptly did – the impact of the Model 3 might have been noticed in 2016, but much less in 2017 or 2018.  Most of the Model 3s delivered in 2018 were ordered in 2016, and so had no impact on the decrease of sales of other EVs between 2017 and 2018.

Let’s also look at these numbers in another perspective.  In 2018, about 17 million vehicles were sold in the US.  The total EVs sold was 217,984 – that is about a 1.3% market share.  For every electric vehicle sold, 77 non-electric vehicles were sold.  That’s a terribly tiny market share.

Back to that 17 million total vehicles sold figure, again.  The best-selling models were selling half a million to a million copies.  Out of 268 different models of vehicle for sale in the US, fewer than ten sold less than 1,000 units in 2018 (assuming they were for sale for the full calendar year and not being phased out or just recently released).  Only the Model 3 registers on that type of size scale as being a meaningful number.

All the electric vehicle “action” is centered around five vehicles from three companies – the three Tesla vehicles, the Chevy Bolt (sales down 22.7% in 2018) and the Nissan Leaf (the “original” mainstream electric vehicle, although sales have declined due to slowness in updating the product, until early 2018, when a new model saw sales slowly revive due to a model change, but the least popular of the five vehicles).  Nothing else sold is more than a rounding error.

Something else is missing.  Where are all the “Tesla killers” that have been promised to us?

Where Are the Major Manufacturers?

Where are the three largest auto manufacturers in the world?  Volkswagen, probably the world’s largest, experienced a 61.7% drop of sales in its single contender, selling a mere 1,354 e-Golfs.  This from a company that sold over 11 million vehicles (worldwide) in 2018.

Second largest Renault-Nissan-Mitsubishi did slightly better with its venerable Leaf, but how has it allowed Tesla to get so far ahead of the Leaf with its Model 3?  It will only finally release a true Model 3 equivalent some time next year, having allowed Tesla two uncontested years of superiority.

Third largest, Toyota, is nowhere to be found at all.  While early adopters of hybrids, Toyota has stubbornly spurned the concept of battery-electric vehicles entirely until just the last year when it started to slowly acknowledge that maybe it was time to reconsider that position.

The largest US automaker (sadly, no longer one of the big three worldwide) is General Motors, where their hybrid Volt has generally been outselling their BEV Bolt.  After a promising 2017, the Bolt showed itself unable to maintain its momentum and suffered 22.7% lower sales in 2018 than 2017.  As for the better selling Volt hybrid, although this was once touted as a flagship example of the “new” GM, they’ve announced they’ll be discontinuing it entirely.

Ford almost doesn’t appear at all.  It seems they totally turned away from electric vehicles, at least for now.  In the second half of 2018, their Ford Focus Electric sold a mere 59 units.

So, while there are lots of bold brave corporate commitments being boasted about, when it comes to looking at actual vehicles sold, and the likely release of new models in 2019, the reality is totally different.  Rather than growing, electric vehicle sales are shrinking and becoming less mainstream and more a niche product.

Tesla

And lastly, let’s look at Tesla.  The Model S saw a decline in sales numbers for the second year in a row, while the Model X had a small increase.  The two models combined had a net 7.2% increase in sales, which is surely better than a net decrease, but nothing extraordinary, and with the loss of the federal $7500 subsidy as of 1 Jan (first it halves to $3750 and then reduces further down to zero) there’s not a lot of upside benefit there.

While Tesla announced an across the board $2000 price decrease to partially compensate for the loss in federal subsidy, it then announced it was discontinuing the entry-level Model S and X with a 75 kWhr battery, and only offering the 100 kWhr battery, which means the lowest price model has actually gone up $17,500.  That is unlikely to help Tesla grow its sales of these two vehicles, and the Tesla S is starting to look a little long in the tooth (deliveries started back in June 2012, almost seven years ago, and while there have been continued tweaks and improvements, some commentators are noting that Model S sales have basically been the same for three years now and are suggesting it is time for a complete model refresh).

As for the Model 3, it is splendid to see them now selling about 20,000 vehicles a month, but that’s still below the claimed 5,000/week production rate they said they’d achieved earlier in the year, and even further below the once promised and still targeted 10,000/week production rate that is still sometimes talked about.  Meanwhile, they’ve not sold a single Model 3 at the promised launch price of $35,000, and if that price target is ever achieved, the net cost to the buyer will still be much higher than promised because of the loss of the $7500 federal subsidy.

There’s another interesting thing about Model 3 sales.  It seems they are only weakly sustainable, based on the apparent collapse of the backorders – it is now possible for anyone to order a Model 3 and get it within two or three weeks – no longer than if you factory ordered any other car from any other manufacturer.  Now that it seems the backlog of orders has been cleared, what level of ongoing sustainable orders are likely?

Certainly, for Tesla, there are abundant opportunities to start selling the vehicle in other countries, but from the US marketplace, just how many more Model 3 cars can the market take each month?

Summary

The potential for electric vehicles improves every day, due to ever-better battery technology.  Batteries are steadily getting smaller and lighter, while holding more charge and costing less.  The price differential between electric and regular internal-combustion vehicles is narrowing, and the ongoing savings in ownership and running costs make payback periods for electric cars shorter and shorter.  Electric cars now have practical realistic ranges between charges, and commercial charging stations are becoming more common and offering shorter charging times.  Besides which, electric cars are just plain fun to drive.

But, for unclear reasons, something is slowing down their marketplace penetration – a toxic combination of car manufacturers wedded to old technologies, dealerships who resist the totally new business and service/support model of electric vehicles, and the general public who need to be better educated and made aware of the benefits of electric car ownership.

So, while the cheerleaders may celebrate what appears to have been a great year for electric vehicles, the reality is entirely different.  Now is not the time to become complacent, now is the time to double down and better market the entire concept of electric vehicles.