Electric vehicles and hybrids appear poised to end 2024 on a high note, with buyers potentially looking to take advantage of incentives while they can.
In Q3, EVs made up nearly 9% of new-vehicle sales (they made up less than 8% in 2023). Sales are still growing, but at a slower pace than in 2023, prompting many automakers to cut back their electrification plans amid other challenging market conditions––but the numbers have still been up and to the right.
Now, there’s uncertainty about where the EV market will go in 2025, particularly given the presidential transition that promises to bring sweeping federal policy changes. While the Biden administration established numerous policies to support and incentivize electrification, President-elect Trump has vowed to end the “EV mandate.” As Tech Brew previously reported, this could mean changes like killing a consumer tax credit of up to $7,500 on EV purchases, a move that’s likely to boost EV sales in the near term as consumers scramble to take advantage of the incentive before it disappears, but could slow adoption in the coming years.
At least for now, however, electrified vehicle sales are still on the climb, according to industry reports.
By the numbers: Kia, Hyundai, and Honda all cited strong EV and hybrid sales as contributors to solid monthly results.
Kia reported its best-ever November sales in company history, up 20% YoY. The brand also said it was the best November ever for its electrified models, with sales up 45% YoY.
Sister brand Hyundai also reported record November sales of 76,008 units, up 8% YoY. Electrified models like the Santa Fe HEV, Ioniq 5, and Tucson HEV set new sales records, as well, with hybrid sales up 114% YoY and EV sales up 70% YoY.
“Hyundai delivered an exceptional sales month, driven by the strong performance of our EV and hybrid vehicles,” Randy Parker, Hyundai Motor America CEO, said in a statement.
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American Honda reported a 14.5% YoY sales gain in November. The Honda brand posted a new monthly sales record of more than 38,000 electrified models.
Listen to the experts: Ahead of the release of November sales reports, industry analysts forecast that new-vehicle sales would grow nearly 7% YoY.
S&P Global Mobility noted in its forecast that the share of battery-electric vehicle sales has consistently been above 8% every month since June. “Despite lower inventory levels for many EVs, November and December could realize BEV share advances in anticipation of federal EV incentives being withdrawn in 2025,” according to the report. S&P projected BEVs’ share of the new-vehicle market would hit 8.7% in November.
Elizabeth Krear, VP of JD Power’s EV practice, noted in a press release that “41% of new-vehicle shoppers say they don’t have a good understanding of EV incentives.” That’s significant because only 5% of new-vehicle shoppers are “very likely” to consider an EV when they don’t grasp the incentives that are available to them, she added.
Tax credits and incentives also are a major driver of EV purchase decisions; nearly half of mass-market EV buyers reported that incentives were a primary reason for their purchase.
Cox Automotive analysts said they expect to see EV sales “surge” through the remainder of the year as consumers race to take advantage of tax credits.
“There is concern that federal tax credits for EVs and PHEVs may be reduced or eliminated when the new administration takes office,” Charlie Chesbrough, Cox’s senior economist, said in a statement. “As a result, EV sales may experience some tailwinds, leading to robust activity through the end of the year.”