Was Toyota right? Lagging EV sales

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Mark W

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I'm seeing numerous stories about the sales of EVs slowing dramatically. It certainly looks like it to me. I went to a Kia dealer last week after picking up my battery replaced Bolt, and they had 12 EV6s on the lot! Many people have criticized Toyota for their go slow approach to EVs. Is it possible they were right?

I think there are two main things that have cooled the non-Tesla EV market demand – the return to sanity of the overall car market, and the EV tax credit changes. During the middle of 2022, when the supply of all cars was low, and average gas prices were over $5.00 per gallon, there was an artificial spike in EV demand. Automakers could sell every EV they could produce, and could charge what they wanted. Tesla raised their prices dramatically and legacy dealers were upcharging way over MSRP for their in demand EVs. Now, gasoline prices are lower, electricity prices higher, and interest rates are much higher. Gas cars are more available, and below MSRP. EV price gouging is over. Today, the EV tax credit is even more important to buyers. The 2023 changes that the IRA made to the EV tax credits have been an absolute game changer. It’s been an instant $15,000 turnaround for Tesla vs. some of their main EV competitors.

At the end of last year, the Tesla Model Y LR AWD was $65,000 with no tax credit. The comparable Kia EV6 Wind AWD Tech was $44,900 after tax credit. That’s a difference of $20,000! Today, that Model Y is $43,000 after the credit, and the same EV6 is $54,100 with no credit. Now, the Model Y is now $11,000 cheaper than the EV6! Tesla is now in the position to set EV pricing. I think the problem for cars like the EV6, Ioniq 5, Ioniq 6, Mach-E, ID.4, etc, is that they're not a great value anymore compared to Tesla models. You used to have to pay a premium for a Tesla, now you're having to pay a premium for a non-Tesla. I also think that EV automakers (and all automakers) will have to start providing more affordable cars again. Bolts were not selling years ago, but now they are because it's the lowest priced EV with decent range.

What do you think? Is this oversupply of legacy EVs just a temporary correction? Did VW move too fast towards EVs? Were Honda and Toyota correct with their slower transition to EVs?
 
But was Toyota right? No. I have never seen a single hydrogen filling station anywhere. New EVgo and Electrify America stations are being installed every week. I see EVs all over the roads everywhere I go, both Teslas and legacy-maker EVs.

In my pre-EV days I was a staunch Toyota fan. Drove nothing but Toyotas for more than 20 years. Now that I've become an EV driver, I can't see myself ever buying another Toyota--not even an "electrified" one (whatever that means).

The EV market will settle down. I'm confident of that.
 
Mark W said:
I'm seeing numerous stories about the sales of EVs slowing dramatically.
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Those stories don't discuss Tesla sales. But my recent survey in an Ioniq forum confirms the excess inventory:
  • China EVs face a 25% tariff retained from a previous administration.
  • EU EVs do not get the generous Federal subsidies.
  • Some domestic EV makers are at generation 1-2 while Tesla is beyond gen 4.
  • EV performance is debatable but I no longer follow EV reviewers of non-Tesla cars. Their glasses are too 'rosy' which maintains early access to "Press" cars.
Bob Wilson
 
Ever since Inside EV's discontinued overall sales comparisons a few years ago, just for fun I have been cobbling together numbers to track sales from individual InsideEV's articles and the GoodCarBadCar (GCBC) sales figure by models page. Here one can make a direct comparison by model using monthly and year-to-date numbers to compare last year to this year. https://www.goodcarbadcar.net/2023-us-vehicle-sales-figures-by-model/

From what I can gather, overall US BEV sales are up from over 5% (of total light duty vehicle sales) in all of 2022, to over 7% in 2023. Overall US BEV sales by legacy automakers for 2022 were a little under 250,000. So far in the first half of 2023 BEV sales by legacy automakers are a little over 200,000. Tesla was just under 500,000 in 2022, and in the first half of 2023 has sold almost 350,000. However, these are my own calculations for my own amusement and so I round them off here. Partly because not all OEM's report detailed sales breakdowns for models with BEV and ICE versions and some do not break down US sales by model so I have to rely on the Inside EV's articles for those numbers.

On GCBC webpage, of the 28 reported legacy automaker BEV only model sales, 18 show a percentage increase in sales for the first half of 2023 compared to 2022 first half, while 10 show decreased sales.
 
Yes, you have to break out Tesla vs. legacy. Tesla is still selling a LOT of EVs. It's the legacy brands, especially the ones that do not qualify for the tax credit that seem to be in a precarious situation.
 
shepdave said:
But was Toyota right? No. I have never seen a single hydrogen filling station anywhere. New EVgo and Electrify America stations are being installed every week. I see EVs all over the roads everywhere I go, both Teslas and legacy-maker EVs.

In my pre-EV days I was a staunch Toyota fan. Drove nothing but Toyotas for more than 20 years. Now that I've become an EV driver, I can't see myself ever buying another Toyota--not even an "electrified" one (whatever that means).

The EV market will settle down. I'm confident of that.
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I would get a hydrogen car immediately, but unless you live in San Francisco or Los Angeles, it’s impossible. It’s practically vapor ware. I remember when the Mirai was so exclusive they would choose celebrities to own/drive them. All the investment in EV stations and none in hydrogen makes the Mirai (and the Clarity) a dead end.
 
It sucks that EV pricing runs like a commodities market, like they were gold bars or pork bellies. We're
buying something with real-world practical utility, like a fridge or a hammer, and the pricing should simply
reflect that value rather than fall victim to these stupid financial games and opportunistic profiteering.

_H*
 
First, let's correct some misunderstandings in the original post. EV sales in the U.S., at least, are not "sluggish." In the 2nd quarter they were up 48% from a year ago, a massively better showing than the automotive market overall. EV market share in the U.S. in Q2 was 7.2%, up from 5.7% last year. And, as the link above notes, Tesla's market share is actually continuing to slip, though they are still no. 1 by a large margin. It would no doubt have dropped more if not for their price cut.

Yes, inventories of some legacy carmakers' EVs have piled up. That's a function of several factors, including Tesla's price cut, increased production/availability, and the way the changes in federal EV incentives have scrambled things for those whose models don't qualify (except they might if it's a lease, which makes little sense and adds even more confusion).

The EV market is going to be a bit of a jumble for a while, and some people won't be comfortable making the switch for a couple more years at least. But it's growing rapidly, and no, Toyota was NOT right. We do need more affordable EVs, and GM's announcement that a new, Ultium-based Bolt is in development shows they understand this.
 
Part of the problem is the auto industry as a whole - I saw a story that put the 5 year inflation at around 21%. Guess how much Ford, GM and Stellantis have "inflated" their vehicles? Nearly 50%. I've seen reports that there are nearly a years worth supply of jeeps at some dealers, and they are STILL asking for a 10k market adjustment.

I saw the same issue myself at Hyundai and Kia dealers. Not only have the lost their EV tax credit, they were still asking for a huge market adjustment on EV6 or Ioniq 5!! And they had dozens sitting on the lot! Both the manufactures and dealers have lost their sense of reality on the market, and on what consumers can afford.
 
Bruce M. said:
First, let's correct some misunderstandings in the original post. EV sales in the U.S., at least, are not "sluggish." In the 2nd quarter they were up 48% from a year ago, a massively better showing than the automotive market overall. EV market share in the U.S. in Q2 was 7.2%, up from 5.7% last year. And, as the link above notes, Tesla's market share is actually continuing to slip, though they are still no. 1 by a large margin. It would no doubt have dropped more if not for their price cut.

Yes, inventories of some legacy carmakers' EVs have piled up. That's a function of several factors, including Tesla's price cut, increased production/availability, and the way the changes in federal EV incentives have scrambled things for those whose models don't qualify (except they might if it's a lease, which makes little sense and adds even more confusion).

The EV market is going to be a bit of a jumble for a while, and some people won't be comfortable making the switch for a couple more years at least. But it's growing rapidly, and no, Toyota was NOT right. We do need more affordable EVs, and GM's announcement that a new, Ultium-based Bolt is in development shows they understand this.
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So, what were the misunderstandings in the original post? You quote the word "sluggish". I never used that word. I think I was also very clear that I was talking about non-Tesla EV demand.
 
marshall said:
Hyundai is currently offering $7,500 off a new Ioniq 5, plus another $2,500 for current Hyundai owners, and most of the Seattle dealers are taking an additional amount off MSRP. So if you are looking to buy an Ioniq 5, you might want get going.

https://www.hyundaiusa.com/us/en/offers/detail?Model=IONIQ 5&ModelYear=2023&YrSerCd=20235&ModelGroupCd=5004&TrimName=SEL&OfferType=Cash
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That link takes me to a page that tells me where my local Hyundai dealer is located. There is no mention of a $7,500 discount.

When I go to my local dealer's website, there is a $5,000 dealer discount on 3 of the 11 Ioniq 5s they have in stock; the rest are listed at MSRP (which is almost a discount after the dealer markups they were formerly charging). I guess I would have to fly from Detroit to Seattle to get a $7,500 discount, but then I'd have to pay for a plane ticket and the costs of the 2,300-mile cross-country trip home.
 
insightman said:
That link takes me to a page that tells me where my local Hyundai dealer is located. There is no mention of a $7,500 discount.

When I go to my local dealer's website, there is a $5,000 dealer discount on 3 of the 11 Ioniq 5s they have in stock; the rest are listed at MSRP (which is almost a discount after the dealer markups they were formerly charging). I guess I would have to fly from Detroit to Seattle to get a $7,500 discount, but then I'd have to pay for a plane ticket and the costs of the 2,300-mile cross-country trip home.
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Strange. The link brings me to a page that shows $5,000 bonus cash on SE and SEL trims.
 
Even if you can get an Ioniq 5 for MSRP+addons then minus 5k.... it still isn't competitive with Model Y, or even ID4. ID4 in my area has NO addons, is marked down about 2-3k (plus you can almost certainly negotiate further) AND gets a 7500 tax credit. I'm not saying the ioniq 5 is or isn't worth more, but not everyone can afford 50k. Plus as of two weeks ago, at least in person, both my Hyundai and Kia dealers still had markups on the cars. I'm not seeing that online, but often dealers play games with different online and in-person prices.

All that said, if I was buying RIGHT now I would have to go for a model Y. I think it's the best value. Though we do like our ID4, no real complaints, and I'm not shopping right now. Plus you could go the lease route for Hyundai or Kia to snag that tax credit... sort of.
 
danrjones said:
Even if you can get an Ioniq 5 for MSRP+addons then minus 5k.... it still isn't competitive with Model Y, or even ID4. ID4 in my area has NO addons, is marked down about 2-3k (plus you can almost certainly negotiate further) AND gets a 7500 tax credit. I'm not saying the ioniq 5 is or isn't worth more, but not everyone can afford 50k. Plus as of two weeks ago, at least in person, both my Hyundai and Kia dealers still had markups on the cars. I'm not seeing that online, but often dealers play games with different online and in-person prices.

All that said, if I was buying RIGHT now I would have to go for a model Y. I think it's the best value. Though we do like our ID4, no real complaints, and I'm not shopping right now. Plus you could go the lease route for Hyundai or Kia to snag that tax credit... sort of.
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I agree with all of this. With Tesla's pricing combined with the tax credit, it's hard to justify a Mach e, Ioniq 5, or EV6. I think that's why we are seeing them on lots now. Of course some people just don't want a Tesla.
 
Mark W said:
So, what were the misunderstandings in the original post? You quote the word "sluggish". I never used that word. I think I was also very clear that I was talking about non-Tesla EV demand.
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So sorry, you said "slowing dramatically." A 48% year over year increase is not "slowing dramatically." It's not slowing at all. And again, Tesla's market share dropped. Is this hard to understand?
 
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