U.S. EV Sales Hit Record 1.2 Million in 2023, Tesla Dominates Market

EVs' share of the entire new-vehicle market increased from 5.9% to 7.6% year over year.

In the fourth quarter of 2023 alone, EV sales saw a 52% increase over the same period in 2022. Image via Shutterstock.

As the automotive industry accelerates its transition to EVs, 1.2 million Americans chose one in 2023, marking a historic high. This surge in EV purchases represented a 7.6% share of the entire U.S. vehicle market, an increase from 5.9% in 2022, as reported by Kelley Blue Book, a Cox Automotive company.

In the fourth quarter of 2023 alone, EV sales saw a 52% increase over the same period in 2022---317,168 EVs were purchased between October and December, accounting for 8.1% of all new car sales during this period.

"Americans bought a record-shattering 1,189,051 electric vehicles last year, and we expect that growth to continue into the future," said Stephanie Valdez Streaty, director of industry insights at Cox Automotive. She highlighted the increasing availability of new products, incentives, inventory, leasing options and infrastructure as key drivers. Moreover, the prospect of price parity between EVs and internal combustion vehicles in the coming years presents a promising scenario for buyers deterred by higher EV prices.

Tesla remained the undisputed leader, as 55% of all EVs sold in the U.S. in 2023 were Tesla products. Although this is a decrease from 65% in 2022, Tesla's aggressive price cuts have been instrumental in maintaining its dominance. These price adjustments have made its most affordable models---the Model Y SUV and Model 3 sedan---more accessible to a broader range of consumers. The Tesla Model Y alone constituted one-third of all EVs sold in 2023.

The landscape of EV manufacturers is becoming increasingly competitive. German luxury car makers are steadily gaining ground in the EV sector. For instance, 12.5% of all new BMW sales in 2023 were electric vehicles. Mercedes-Benz and Audi also saw their EV sales rise, representing 11.4% and 11.0% of their total sales, respectively. Among non-luxury brands, Volkswagen led the way, with EVs making up 11.5% of its sales in 2023.

The variety of available EVs is set to expand significantly, with Kelley Blue Book predicting consumers will have a choice of more than 70 different models in the next two years.

The top-selling EVs in the U.S. in 2023 were predominantly Tesla models, with the Tesla Model Y and Model 3 leading the pack, followed by the Chevrolet Bolt EV/EUV, Ford Mustang Mach-E and Volkswagen ID.4.

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