By Zoe Yi, Edited by Finance Associated Press, April 3rd
On Tuesday, most automakers unveiled their sales data in the United States for the first quarter. According to statistics, new car sales in the US increased by nearly 5% year-on-year in the first quarter, with total sales approaching 3.8 million units.
However, it is worth noting that the growth in electric vehicle sales has slowed significantly in the first three months of this year, as mainstream buyers have begun to worry about the limited range and insufficient charging stations.
This slowdown in electric vehicles confirms the concerns of automakers—they seem to have moved too quickly to meet the demands of electric vehicle buyers.
Weak Growth in Electric Vehicles
Data shows that in the first quarter of this year, electric vehicle sales in the United States increased by only 2.7%, reaching slightly over 268,000 units, far below the 47% growth rate last year; the share of electric vehicles in total US sales dropped from 7.6% last year to 7.1%.
Ivan Drury, director of research at the automotive information website Edmunds, explained that almost all early adopters and environmentalists have already purchased electric vehicles, and the challenges faced by electric vehicle manufacturers now stem from the skepticism of mainstream buyers.
Drury pointed out that concerns about charging infrastructure, battery life, and insurance costs are the main sources of trouble for the electric vehicle industry.
It is worth mentioning that Tesla, the electric vehicle giant, saw a decline of 8.5% in global sales in the first quarter, marking the first year-on-year decline since the second quarter of 2020. According to market research firm Motorintelligence.com, Tesla's sales in the United States in the first quarter dropped by more than 13%.
Although Tesla attributed the sales decline to changes in production for the upgraded Model 3, delayed deliveries in a competitive market, and incidents of arson at its German factory, the trend of slowing consumer demand has long been the company's biggest concern.
Meanwhile, Jonathan Smoke, chief economist at Cox Automotive, the largest automotive trading platform in the United States, warned that the automotive industry seems to have reached a peak in spring sales, as current high interest rates are keeping potential car buyers on the sidelines, with consumers lacking a sense of urgency to make purchases, while the market expects the Federal Reserve to cut interest rates later this year.
Shift Towards More Affordable Cars
Today, there is another sign in the automotive market that more affordable cars are selling better.
Drury of Edmunds, the automotive information website, said that more affordable cars are selling faster than more expensive ones. Many large and expensive SUVs saw a decline in sales this quarter as buyers began to focus more on thriftiness.
For example, Chevrolet, a subsidiary of General Motors, sold 37,588 units of the Trax compact SUV this quarter, more than five times the figure for the same period last year. The starting price of the Trax is around $21,500, and its sales even exceeded the total sales of Cadillac, also under the General Motors umbrella.
From January to March, General Motors, the best-selling automaker in the United States, reported a 1.5% decline in first-quarter sales; Stellantis saw a nearly 10% decline in sales; Kia's sales dropped by 2.5%. These three companies had strong sales in the same period last year.
In contrast, Japanese automakers performed quite well. Toyota announced a significant 20% increase in sales in the US for the quarter and reported a 36% growth in total sales of its hybrid and pure electric vehicles; Honda said its sales increased by 17%; Nissan and Subaru saw sales growth of 7% each; while Hyundai, the South Korean automaker, grew by only 0.2%.
