U.S. Electric Vehicle Loyalty, Volumes Reach New Highs

The U.S. market for fully electric vehicles (EVs) has reached record volume with 208,000 new registrations in 2018, according to IHS Markit.

New registrations for EVs during 2018 more than doubled year-over-year from just over 100,000. According to IHS Markit, 59% of these vehicles were registered in California and the section 177 states that have all adopted the same vehicle emission standards and have therefore been key markets for EVs (Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont). California on its own accounted for nearly 46% of new EV registrations in 2018.

Loyalty rates for EVs also are on a growth trajectory, with nearly 55% of all new EV owners who returned to market during the fourth quarter of 2018 purchasing or leasing another EV — up from 42% in the prior quarter, according to IHS Markit.

Tom Libby, loyalty principal at IHS Markit, said that EV loyalty rates have been steadily rising. “This increase over such a short timeframe demonstrates that a portion of the U.S. market is highly accepting of this new technology and has a growing comfort level with it,” Libby pointed out. “As more new models enter the market, we anticipate an even further increase in loyalty to these vehicles.”

IHS Markit forecasts an increase in new fully-electric models offered in the U.S. market over the next decade, with more than 350,000 new EVs to be sold in the United States in 2020, reflecting a 2% share of the total U.S. fleet. In 2025, that figure is expected to rise to over 1.10 million vehicles sold, or a 7% share, according to IHS Markit powertrain forecasts.

“A rapid increase in EV nameplates is the catalyst behind the projected growth throughout the next decade,” explained Devin Lindsay, IHS Markit powertrain analyst. “While relatively successful models, such as the Tesla Model 3, mature in the market, other traditional automakers will be rolling out not just one EV, as we have seen in the past, but multiple models off dedicated EV platforms.”

Combined with anticipated entries in the market from start-up automakers like Rivian, Lucid and SF Motors — as well as traditional manufacturers — U.S. consumers are expected to have more choice on the dealership floor over the short-term.

According to IHS Markit, the greatest headwind for EV sales in the United States may be any elimination or delay to California’s Zero Emission Vehicles (ZEV) mandate by the federal government. The U.S. EPA has proposed to withdraw the waiver and, therefore, the ability for California and the section 177 states to regulate greenhouse gases separately from federal standards. If allowed to stand, this could have a considerable impact on the nation’s most popular EV market, IHS Markit predicts.