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What’s really happening in the U.S. EV market?

Sales are growing fast despite gloomy headlines. What gives?

February 1, 2024
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A recent slew of negative headlines about U.S. EVs makes it feel like the sky is falling on the market. Yet the data show robust growth. Combined battery electric and plug-in hybrid sales in 2023 were up 50% from 2022, while EV market share reached 9.5% in 2023, up from 7.5% in 2022, according to BloombergNEF. 

Still, there have been notable signs of changing expectations. GM and Ford have downsized their EV ambitions. Hertz sold off 20,000 Teslas. And Elon Musk tried to temper expectations in last week’s disappointing Tesla earnings call. 

So why all the conflicting indicators? 

In this episode, Shayle talks to BloombergNEF EV analyst Corey Cantor. They talk about the changing outlook on the speed of EV adoption as the focus shifts from early adopters to the mass market. They talk through the persistent challenges EVs face, like slow charger rollout and lack of affordable price points. They also cover topics like:

  • Whether sales challenges are more of an overall market problem or a legacy automaker problem
  • Tesla’s dominant but falling share of the market and what was behind the Hertz sell-off
  • Momentum behind insurgent Korean automakers Kia and Hyundai
  • Whether the Chinese EV giant BYD will enter the U.S. market

Recommended resources

  • Inside EVs: Hyundai's Electric Vehicle Push Is Absolutely Working
  • Bloomberg: EV-Charging Firms to Struggle With Finances, Investment in 2024

Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you’re a startup, investor, enterprise or innovation ecosystem that’s creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more.

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Shayle Kann: I'm Shayle Kann and this is Catalyst.

Corey Cantor: I think this sky is falling aspect was a little bit hyperbolic when sales were up by so much. I think any renewable energy market would take 50% year-on-year growth or the auto market would love to see 50% year-on-year growth as a whole.

Shayle Kann: The doom and the gloom amidst the boom. It's the US electric vehicle market. And also a very catchy phrase if I do say so myself.

I am Shayle Kann. I invest in revolutionary climate technologies at Energy Impact Partners. Welcome. The narrative in the news ain't great. I feel like I've probably seen a dozen, maybe a couple of dozen articles in mainstream press over the past few months that are bemoaning the apparent struggles of the US EV market. Here's one just picked from the random sampling headline from the Wall Street Journal from late December, "How Electric Vehicles Are Losing Momentum With US Buyers, in Charts!" All right, I added the exclamation point, but it seemed like they were very emphatic about that. But also if you look at those very same charts in that article, the story does not seem all that clear to me. In fact, the first chart in the article showed that EV market share has continued to increase and actually even accelerated through Q3 of 2023, which is the data that they had at that time.

So sales are growing and they're growing faster than the overall market, but at the same time, I do think it's worth acknowledging there are some worrisome signals. Some automakers have announced plans to pull back on planned EV production capacity. The cars have been piling up at dealer lots, at least in some cases, Tesla is guiding potentially notably lower growth in 2024 overall. And there are enough signals there that I don't think we should totally discount the negative headlines. So I don't know, it's kind of confusing. At least I've found it to be so. I'm not sure anybody really knows what's happening in the market, but at least we can rely on data rather than vibes. So, to hit us with the data I brought on Corey Cantor, who's a senior associate at Bloomberg New Energy Finance and the resident EV data guy for the United States. Here's Corey. Corey, welcome.

Corey Cantor: Thanks for having me today, Shayle.

Shayle Kann: Thank you for helping me make sense of all the public noise going on about electric vehicle sales in the United States and the outlook for them. Let's start with what all the headlines have said. Can you just run me through the litany of recent news that has come out that is delivering a bearish sentiment to people who are looking to the EV market here?

Corey Cantor: If you went back to really September of last year, you'd be having so many bad headlines that you could fill up a whole episode, just reading takes from the Wall Street Journal saying things like "The EV bubble is deflating," "Dealers complaining about EVs piling up on lots." Even USA Today, I think, had a piece which isn't politically or anti-EV in any way saying that consumers are not buying EVs despite the fact that there are generous tax credits under the Inflation Reduction Act. We've also seen specific models sitting on lots for a while. So you run the gamut, you pick the paper, people are saying that EV's adoption is on the decline, but we at BNEF have a lot of data, so we can dive into that. I think the big takeaway when reading through these headlines and the way I like to think about it is, are EV sales actually going down or is people's expectations of EV growth changed from where maybe it was a couple of years ago? And it's a more macro conversation on what is a successful US EV transition and how do we get there?

I feel personally that 2023, based on the data, was a pretty successful year for the market and a lot of the open questions around 2024, but if you're just reading the headlines, you might think the sky is falling that EV sales are actually going down. By the end of 2023, according to our data, EV sales were up almost 50% year-on-year from 2022 to about 1.45 million in total up from about 971,000. Now we're counting both BEV and PHEV in our EV metrics, but impressive nonetheless.

Shayle Kann: So we'll dig into that more. But I think you're hitting on a key point that I've noticed in that reporting too, which is that people are talking about the EV market slowing down. The data doesn't really support the EV market having already slowed down, at least through 2023. But what the reporters were reacting to was announcements about the future. And in particular, I think what was happening a lot in the fall, you could tell me if you feel differently, was that some of the major auto EMs were announcing, and this happened repeatedly, that they were going to scale back on planned production expansion. And so that's an indication as you said, not that EV sales have already slowed down necessarily, but that their prior expectations of demand growth might be lower, which is still notable and we should dig into that. But it is a different thing.

Corey Cantor: Right. And I think the other fair assessment that in some of the conversations with dealers, for example, if you see specific EV models piling up on lots for longer than average, say 150 days or so, or a hundred days or so when the average car is maybe sitting on lots for 70 days, that's something to take note of. And not to downplay that specifically, but when you're looking at the actual monthly sales data, it was really only October and November that we saw in our preliminary data where there was any type of dip. In fact, December was the highest month we had for all of 2023, again based on preliminary data, to show that a lot of those end of year push for EVs was working. So again, things are going to be noisy, I think annually is the best way to look at it, but even quarterly has its own rhythm and flow to it.

And then one other point on the, I guess, aspect around the dealer lot EV pile up that often doesn't take Teslas and Rivians into account. So often you'll have people saying, "Oh my goodness, the US EV market is in trouble." But if you're removing about 50% of sales, you take Tesla, Rivian, Lucid and the EV-only automakers out of the picture, then you're left with an incomplete picture. So some of it wasn't bad intent, but I think this sky is falling aspect was a little bit hyperbolic when sales were up by so much. I think any renewable energy market would take 50% year-on-year growth or the auto market would love to see 50% year-on-year growth as a whole.

Shayle Kann: Well that's a good point. Ultimately EV sales growth matters, but it doesn't only matter in a vacuum, it matters relative to overall vehicle sales. So looking at it from the perspective of market share, what have we seen in terms of EVs?

Corey Cantor: If we go back to, I graduated from grad school in 2019, the EV share of sale in the US was about 2% and that was back in 2019. So about four years ago, if you look at the full four years. In 2020, it was finally starting to show some signs of growth because in 2021 you had EV share of sales at about 4.5%. In 2022 it reached about 7.5%, and then last year it was about 9.5%. So again, that's BEV and PHEV have together, but the BEV and PHEV split is 80/20 in the US because Tesla has played such a dominant role. Again, we want to see US EVs break that 10% barrier. In our growth expectations. We saw it happening last year. What ended up occurring is overall car sales bounced back too. So everyone was having a good year in terms of drivetrains.

You had hybrids doing really well, you had EVs doing really well, and you had the total market doing well, ending up at about 15 and a half million vehicles. We, in our estimates, saw closer to 15 million vehicle sales for last year. So again, that's a really key point to hone in on, not just for the US market, but as you're looking at Europe and China. What is EV share of sale versus just absolute? Because the US in terms of absolute market sales was second after China, which is awesome, but if you look at Europe, you're seeing more in that 25% to 30% for UK, Germany, France, the major markets in Europe.

Shayle Kann: So everything was up in terms of auto sales last year, but EVs gained share still, you said from 7.5 to nine point something. So EV is still growing faster than the overall market. So I want to tease out this, what has happened versus what seems like it will happen? Who, first of all, which automakers have been saying that they're going to pull back on production plans and what are we supposed to make of that?

Corey Cantor: I think this is where we get into the interesting story, not only for what happened last year, but as you're looking into 2024 market share and '25 and '26. You can't talk about cars in America without talking about the big three, General Motors, Ford and Stellantis, and really they had mediocre years last year. So let's take Ford for example. In 2022, they had around 60,000 EV sales. Pretty solid, but nothing to write home about when Tesla, alone for the Model 3 and Model Y, was selling somewhere in the 300,000 range in 2022. Flash forward to 2023, Ford has about 72,000 EV sales. So there was growth, but there wasn't this massive growth. There wasn't a doubling of sales. Ford also has only two EV models, the F-150 Lightning and the Mach-E. So again, one of those models, the Mach-E has been around for four years, and the Lightning, we're going to get into, I'm sure all of the pickup challenges that EVs are facing in that segment in particular, but again, not huge growth.

Stepping over to GM, I think an even more complicated and potentially more problematic situation there. GM has been ramping up its battery platform, Ultium, over the past couple of years. So that includes opening new facilities and partnerships with LG, and really this new platform hasn't taken off yet in terms of the vehicles that are being produced with batteries from Ultium. The first new gen EV on the Ultium platform was the Hummer EV, but the first mass market one was essentially the Cadillac Lyriq. Meanwhile, GM was selling a lot of Chevy Bolts and Bolt EUVs, which used the previous battery platform, which was a far more, I'd say archaic battery technology, but still gets the job done. And a lot of people really liked the Chevy Bolt. GM sales overall was about 76,000 units, so actually beating out Ford by a little bit, but around 80% of those vehicle sales were the Chevy Bolt and only about 20% or so was the Cadillac Lyriq, the Hummer EV, a couple of Chevy Silverados and a handful of Blazers.

GM also had a bunch of software problems with their Blazers, which was their hyped next big vehicle. And they put a stop sale on the Blazer at the end of 2023. So a big takeaway though, is that the Bolt was doing awesome, but then GM had planned to and successfully ended production on it, that previous generation of the Bolt. So as we headed to 2023, their most popular EV is off the market and now they have to ramp up this battery manufacturing process even faster and there's no sign that they have figured it out yet. We'll see what the next investor call brings. But if you look at just GM and Ford alone, you've got Ford with two models, one of which is four years old and isn't really compelling people to jump on it. The other, the Lightning, which is facing its own challenges on pricing and segment, and then on the GM side, they're not even producing EVs at a high volume for the ones that they're still producing. Two big problems there.

And then finally, Stellantis. They have a very successful plugin hybrid the Jeep Wrangler PHEV that honestly has flown off the lots left and right, and done really, really well for a plugin hybrid, but they haven't released a fully electric vehicle until later this year. And again, it's not out yet and they can go through the same challenges as GM and Ford. So I think when you are reading reports and thinking about the US market, you want to see Ford, GM and Stellantis doing better, but we're just not there yet. None of them has really pulled into the same kind of space or even half or a quarter of the space that Tesla occupies in terms of competency on their scale up of EVs.

Shayle Kann: So you could hear all of that and come to the conclusion that, okay, this is not really a forward-looking EV market problem. It's a problem that is idiosyncratic and specific to what's going on with Ford and GM and Stellantis at the moment. And I think that actually was the view that a lot of people took, at least within this industry over the past couple of months. I would say, then though, you turn to Tesla and there have been a couple of things that have happened recently that might make you re-examine that. One, being Hertz's announcement of selling off a crazy number of Teslas that they'd already bought, which you should explain a little bit more. And then the second being more recent, which is Tesla's guidance for 2024 being wishy-washy at best.

Corey Cantor: Or between two waves.

Shayle Kann: Yeah, between two waves. It's like between two ferns but of cars. So Tesla would be the counterexample to Ford, GM and Stellantis, here. Is it a counter example or are we learning that it's subject to some of the same challenges?

Corey Cantor: I think Tesla's challenges are less on the scale-up side. The Model Y, at least according to Tesla, was the top-selling vehicle in the world last year, bar none, at about 1.2 million EVs delivered. And one thing that's interesting about Tesla, and I'm sure many of your listeners know, they're pretty opaque on their data and pretty opaque on how they even release deliveries. So Tesla typically will group the Model 3 and the Model Y together on any of their quarterly deliveries. And so for last year they would say something like, "Oh, 1.75 million of all the vehicles sold were Ys." And for the first time I've ever seen, they were like, "Oh, the Model Y did really well. Here's the actual data on the number of Model Ys delivered." Even for us at BNEF, we have a data provider that will break out by region what the Model Y is, based on their estimates, and then we'll have to rejigger it based on what Tesla says and make sure that everything lines up up, and there's an intensive data process we go through.

Anyway, in terms of Tesla, where their challenge has been is really they only have two high volume models and they have, over the past four years, not introduced, until the Cybertruck, any new model, but you almost have the 3 and the Y in a league of their own. And then you have what Tesla refers to as other models, which is the X, which has always been a little bit of an odd duck out in the Tesla lineup, BS, which was their original premium sedan, and then the Cybertruck, which was... And how do I put this diplomatically? Let's call it an interesting project that Elon Musk was particularly into, and not to say that the pickup space isn't really important, but even in Musk's own words, the Cybertruck has been a bit of digging their own grave in terms of how difficult production on the Cybertruck is.

So between the Model Y coming out, that's 2020, and now we're in 2024 when the Cybertruck is actually being produced, that's four years that they're not working on a cheaper sedan. That's four years that a van wasn't released in the commercial space. Even the semi, which I think a lot of people at BNEF are really excited about, because decarbonizing that kind of medium and heavy duty space is really important for our climate targets as we move forward, has been an afterthought. The semi wasn't bought up I think at all on yesterday's investor call. Maybe in passing. So their issue is the Y and the 3 are doing well, but they're pretty old too. The 3 just saw its first refresh, so that should hopefully help. But ultimately Musk says something like, "You don't need dozens of models to do well," but if you look at BYD, which is doing really, really, really, really well, and I always like to bring them up because we're talking about the US market, but we are in a global auto market. BYD hit all their targets last year in terms of sales and they've surpassed Tesla in terms of fully electric vehicles on a quarterly basis in Q4.

So again, they have nearly 30 models available. Tesla has five, but really two. So I think if Tesla is able to release that mass market EV next year, as a Reuters article that came out this week suggested, they'll be ahead of a lot of the US competition, but with Tesla timelines, have always been moving and even Musk said that he tries to be optimistic, but these things tend to be pushed back. That car is going to be really important. They have to get that right.

Shayle Kann: Back to this core question of, are all of these data points, signals or noise in the what is happening with electric vehicle demand in the United States? It seems like you can point to any individual one, you can point to the expected production slowdowns from Ford and GM and Stellantis and look at what's happening with those individual companies. You can point out that Tesla has limited models and they use that to explain in part why they're expecting less growth next year, though they didn't define it particularly highly. What about though the Hertz sell off? First of all, explain what Hertz announced, but then I'm curious what your take on it is.

Corey Cantor: Hertz announced they were going to be selling about a third of their fleet, around 20,000 EVs, given that they had seen issues with the expense and the operating and maintenance around it. And also, Hertz said a little bit less to this point, but they took a big residual value loss on those Hertzs. So when Hertz was buying those Tesla models, it was at the peak, peak, peak of inflated car prices. Some of it spurred on by Russia's invasion of Ukraine. Some of it spurred on by high commodity costs, including spikes in lithium that occurred in 2022. And so what you saw, and let's use the Model Y as an example. Many of the Model Ys that Hertz was likely to have bought, 'cause when they made their announcement that they were beginning to purchase those EVs, was in the $60,000 range or the high $50,000 to $60,000 range.

If you look at the Model Y today, buying a new Model Y is going to cost you closer to $40,000 to $45,000. So that's nearly $20,000 cheaper in terms of the individual unit and really about a third of the price. So in addition, you had a charging issue. Hertz hadn't built up enough charging infrastructure at their various facilities. They weren't seeing the full benefit of charging at home or residentially as opposed to having to use specific services to recharge their EVs. I even took a Hertz, not the reason why Hertz essentially sold the EVs, but my girlfriend and I took a trip to California, we rented a Tesla Model 3, we had a great experience in terms of using a Tesla supercharger network. We had to return the Tesla Model 3 at 70% to Hertz. And I'm a savvy EV analyst to understand how much charge you use, but if you're the normal consumer, there's also an element of 70%.

If you don't have a charger right there and you're traveling any bit of distance, you're probably losing 20% regardless. You have to travel on a highway and that's less regenerative braking than your city driving, especially in a place like California. So to answer your question, I think it was a couple of factors that put Hertz in that position. I think there's been a lot of pointing at, "EVs aren't good," "EVs are a mess," "EVs are bad for consumers." I think the rental case is a challenge because you're unfamiliar with the area, you don't know where the charging is. That being said, a lot of this was a residual value story and the fact that Musk and Tesla was reducing the cost of EVs to be better for consumers, is a good thing for them. But for Hertz and some of these fleet customers, if someone is going to move to a new Tesla to buy, as opposed to buying a resold Tesla at a higher value, that's not good, especially when you had set expectations about how much value those Teslas would hold up.

We've seen other automakers like a Ford or Mercedes-Benz, when they were asked about Tesla's price cuts in the US, they essentially said, "It's crazy. Why would we follow this path? We can't afford to do that." And risking a relationship with someone like Hertz would probably be seen as not worth it compared to the benefit from consumers. Now Tesla has a different thesis. They want to make sure that the cars are as accessible to anyone as possible. But going back to the original conversation we were having on Tesla, most other automakers would introduce a new vehicle model or key prices relatively constrained, and instead Tesla's had a lot of movement with all four of their models in terms of pricing. And that could leave people, whether you're a rental car company or just an individual owner, feeling jaded.

Shayle Kann: Okay, so we've talked about Ford, GM, Stellantis, we've talked about Tesla. What about Hyundai and Kia? They seem to be the insurgent players in the EV space, at least in the US.

Corey Cantor: They had an impressive 2023. They grew by about 60% year-on-year from '22 to 2023 going from about 73,000 as a group up to about 120,000 units. And again, it's always a little tricky 'cause we have preliminary data that comes in and it gets updated a little bit. So even since I last published the piece on it, we went from about 117,000 up to about 122,000. Their strategy has been a little bit similar to BYD in that they don't just have two EVs, they have the Ioniq 5, which is a crossover. They have the Ioniq 6, which is a sedan. They have the Kia EV6, which is basically similar to the Ioniq 5, but a different kind of style from Kia. One that I'm particularly excited about it, and I think the market is as well, is the Kia EV9, which is the first major EV outside of the Rivian R1S two by three-row SUV, reaching out to that family demographic.

But the Kia EV9 starts at a much lower price in the $50,000 price range. And then finally Kia and Hyundai have more affordable EVs in the form of the Kia Niro and the Hyundai Kona. So you have some PHEVs thrown in there and no matter how you slice it, you have a bunch of different options for consumers. Part of this is battery expertise being built up over time. Hyundai and Kia had EVs in a first generation from about 2016 to 2019 that weren't particularly good. The original Ioniq and earlier Kia EVs were being sold in the US so it gave them time and expertise with the market. They didn't just have to come on in 2023 and say, "This is our first EV." And if anything, that's what has made me nervous about, and we could talk about some of the Japanese automakers like a Toyota or Honda, but we see in the case of electric vehicles that you don't necessarily get it right on the first one.

So Hyundai Kia has been releasing and reiterating on their EVs for the past, I'd say seven or eight years, they have that battery expertise and some of the designs have been unique. It's a, I wouldn't say completely flood the zone mentality, but they have started to differentiate themselves in that US pack of EV market share.

Shayle Kann: Well, you mentioned BYD and we are primarily talking about the US market, but still I want to ask about the Chinese auto OEMs. Both, what's happening in China and globally and do you foresee a world in which they do enter the US for passenger vehicles? Obviously BYD is already here for electric buses, buses and stuff like that.

Corey Cantor: So what's crazy about BYD is if you go and you look at their sales data going back into 2010, 2011, 2014, 2015, really up until about 2018, 2019, they were doing about 400,000 car sales annually. And that's when they were doing gas car sales, you'd see 400,000, 400,000, 400,000. In about 2022, they make this choice, maybe beginning of 2022, end of 2021, that they're going to phase out the sales of internal combustion engine vehicles. "We're just going to sell new energy vehicles," as they're referred to in China, your BEVs, PHEVs, FCEVs, if there are any FCEVs. And BYD suddenly starts to see this explosion in EV production. They go from about 400,000 units to about 1.6 million units in 2022, and then last year they hit three million units in 2023. And at that point, BYD begins to go global. They're looking at the European market. I had spoken to some folks in Israel and they said that BYD had the top-selling model in the first half of 2023 in Israel. They started making efforts to go into Brazil, signing partnerships there. Not that they're manufacturing vehicles there, but really aggressive on top of their performance in the Chinese market. And so they went for it.

As we were just talking about with Hyundai Kia, there's an element of how serious are you about the EV transition, to where you might have to absorb a little bit of pain in terms of a single year of sales or even a couple of years. But if you're serious about it and you make the transition and you have the battery manufacturing expertise, which again, BYD had a massive battery element in terms of their company's history, then you can really benefit. Although I think the explosion of growth that they had was really remarkable. You don't see, even with Tesla, it took many, many years for them to break a million in terms of annual sales or 1.8 million last year with BYD going from 400,000 units sold annually back in 2019 to three million about four calendar years later, is crazy.

Shayle Kann: Do you foresee them entering the US market in the passenger world?

Corey Cantor: They have expressed a lot of frustration with the IRA and the fact that there is the VOC provision and the fact that they can't get subsidies and even some of the grant programs that have been passed for the infrastructure law, are being really tough on even their bus business. They're going to Mexico right now and I think they're keeping an eye on the US market, given its size. I think if other automakers don't get it together by '26, it becomes very attractive to move in here. One Chinese company, I think, that they could emulate is actually a Swedish badge in the form of Volvo. So Volvo and Polestar are already here and they're subsidiaries of Geely. I think that's the first major Chinese automaker releasing EVs in the US. But I think if BYD sees Volvo doing well and the big three not, it becomes a pretty open market for them to come in.

And that goes back to the earlier conversation around, what is Tesla doing on this fourth quarter investor call in their mass market EV? Part of BYD's appeal is that they're able to release cheaper vehicles. They're not necessarily seen, even though they're very nice EVs, as this premium that Tesla has. So if Tesla is successful and gets that mass market car there, maybe the US market becomes less attractive, but they're keeping an eye on it and they've constantly been frustrated with how the IRA has been set up because I think in a perfect world with no tariffs of around 27% on Chinese cars and IRA access, they would already be here. But given these hurdles, they are not, and I don't think they've made any plans to come here yet.

Shayle Kann: All right, so stepping back on all of this then, here's a simple way to put it. So the EV sales in the United States grew, you said around 50% in 2023. What is your expectation for 2024, 2025? What do we think is going to happen here?

Corey Cantor: So we just really start a year ahead, at the end of December, and we see about 32% growth. So you can say in some respects that the critics are correct in that there will be a sales slowdown this year, but part of it is for the reasons that we've been talking about. So when you start to see automakers changing their near term views, whether it's production plans or model delays, you have to take that into account. One GM vehicle that I'm particularly excited to see how it does, assuming everything else is firing on the correct cylinders, is the Equinox EV. That EV was supposed to come out in 2023. It's been delayed to probably the middle of this year and given everything else going on with the Blazer and the Silverado, we don't know exactly when it's going to ship, but that has an impact on our sales expectations.

And then when you take into the fact that Tesla is not going to grow necessarily by too much, you really are relying on the improvements of Rivian, Hyundai, Kia, Volvo to power the US market, and then Tesla to stabilize. So for that reason, we have a 32% base case for this year. I think Cox Automotive has released their year ahead and that's about 35% year-on-year growth. So neither of these are end of world, EVs falling off, but again, it's a slow-down from 50%. Ultimately, as your base gets higher, you should expect growth to slow, but if you want to reach 50% EV share of sale by 2030, you still need to see some pretty sizable growth over the next couple of years. One more point on that, Shayle, we have price volume maps at BNEF, and I can't reiterate enough the fact that when you get those EVs below $35,000 or in the $36,000 or less range, you're unlocking about half of the US new passenger car sales market.

So I think that's also been an element that a lot of the press has missed, in that there's only so much ground you can make up each year in the more premium vehicles. And we haven't even mentioned charging yet, and that is a real problem here for the US market compared to Europe or China. But just in terms of the pricing, if you're pricing a Ford F-150 Lightning in the 50,000, $60,000 range, the market gets smaller and smaller, the higher up you get. And so even folks like Rivian, what I've been trying to watch is can they get that R1S, which is selling really well at $70,000 in terms of starting costs down to $60,000, because then you're just unlocking more of the market. And so if Tesla is able to release a model that's in the low thirties or the high twenties, you're unlocking almost that 50%, seven million in annual sales, assuming 14 million is the... Honestly, the US market fluctuates between 14 to 16 million sales annually, and post pandemic things have been a little bit wonky, but no matter how you slice it, 50% of consumers are pretty much left out each year, given current prices.

Shayle Kann: You mentioned charging. Do we have evidence that limited availability of charging is a factor in holding back EV demand growth here? Can we draw that correlation?

Corey Cantor: Yeah. Cox Automotive released this study in the middle of last year surveying buyers and across the overall auto market. And the two top concerns for EVs, one was upfront cost, which we've talked a bit about today, and then second was charging, and it was about, I believe 39% of those surveyed had issues with public charging. That might've been the 2021 number, but still in the 30% either way for 2022. One aspect of public charging that's been so frustrating to watch from a data perspective is just how slow US public charging connector installations have been. So in 2022, about 41,000 public charging connectors were installed, and last year it was closer to 27,000 new net public charging connectors were installed. If you look at China, they do about 800,000 last year. They've been doing in the hundreds of thousands for the past couple of years.

And if you look at the infrastructure law with the $5 billion as a part of the NEVI Program, according to our charging infrastructure team, only 4% of those funds have been awarded to charging infrastructure operators. And awarded doesn't mean built. Awarded means you've selected EVgo or Tesla or whoever to actually go out and build on a site. That has to be a lot higher. Now the good news is if only 4% has been awarded, that leaves 96% up in the air to be utilized. But you're not addressing consumer's two big concerns. And so when I'm speaking to people, both BNEF clients or in the EV thought leadership space, there's a lot of people who feel like automakers are going to get there on pricing, but on charging, there's still the same kind of concerns and still the same frustration. You see charging stories around Chicago last week and the fact that people were not having enough chargers or there were issues charging in the cold. And what I always like to remind people of is that in Norway, 90% of EV sales are electric, and Norway is quite cold.

So there are other countries that have figured this out, but whether it's charging or scale up of battery manufacturing, we have a long way to go here. I think there's reason to feel optimistic and reason to not just listen to the noise of the headlines, but at the same time, there's a lot of work to do and the automakers and the battery manufacturing folks and the charging operators that are successful in the next couple of years really could carve out major market share for the rest of the decade.

Shayle Kann: All right, Corey, thank you for helping me walk through all this noise, finding the signal and reading the noise.

Corey Cantor: Thanks, Shayle, really appreciate your time.

Shayle Kann: Corey Cantor is an analyst at Bloomberg NEF, focused on EVs. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. Prelude backs visionaries accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more at preludeventures.com. This episode was produced by Daniel Woldorff, mixing by Roy Campanella and Sean Marquand theme song by Sean Marquand. I'm Shayle Kann and this is Catalyst.

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