It turns out that people do, in fact, want to buy cars that are cheaper and maybe even smaller than the hulking trucks and SUVs we must now finance over a quarter of our overall lifetimes. That, or people just know a good deal when they see one. Maybe both.
Either way, new electric vehicle registration data (sexy, I know!) is here for the first quarter of 2023, and it’s incredibly revealing about what the tax credits did to the overall market, competition for Tesla, and the soon-to-be-discontinued Chevrolet Bolt. On the eve of its death, the Bolt is seeing more sales wins than ever before. Maybe General Motors should make more small, affordable cars? Ah, never mind. That’s crazy talk.
I welcome you back to The Autopian’s morning news roundup with this story, plus some tough talk from Ford CEO Jim Farley about China; potentially concerning airbag recall news; and the latest with Tesla Model Y sales after all those price changes.
The Tesla Model Y Price Cuts Worked
First, as we talk about EV sales in Q1, let’s set the table and start with Tesla.
I’ve said for a while now that while Tesla is more stable, dominant and profitable than ever, one of its biggest problems is its aging lineup. Spec-wise, Teslas are still among the very best EVs on the road—if not the best—but car buyers like shiny new things and the competition’s getting better and better.
But Tesla still has the edge in scale and the ability to slash prices to gin up demand. It’s working, reports Automotive News, particularly with the Model Y crossover.
Tesla doesn’t break out “deliveries” by model or region, but analysts can figure out the trends by looking at vehicle registrations:
Tesla Inc.’s price cuts in the first quarter led to significant volume gains, according to U.S. new-vehicle registration data from Experian. But the benefits came mostly from the relatively fresh Model Y crossover and not the older Model 3 sedan, Model X crossover or Model S hatchback.
Analysts are closely watching Tesla’s numbers after CEO Elon Musk said last month he was willing to sacrifice profits to maintain a global growth target of 50 percent a year for the foreseeable future. Tesla is targeting between 1.8 million and 2 million vehicles in total global production this year.
[…] In the first quarter, Tesla’s U.S. registrations rose 37 percent compared with the same period last year to 155,360 vehicles, Experian data shows. Registrations for the Model Y soared by 79 percent to 93,294 vehicles, representing more than one-third of all EV sales in those three months.
[…] Tesla’s flagship vehicles, the Model S and Model X, posted mixed first-quarter numbers. Registrations for the Model S fell 71 percent to 2,636 vehicles, while the Model X rose 34 percent to 6,545 vehicles compared with a year earlier.
Experian says Tesla sales made up 60% of the EV market in Q1. But that’s down from 72% in 2022. EV registrations that quarter rose to 7% of America’s overall car sales, up from 4.6% a year earlier.
The EV Tax Incentives Worked, Too, But Not Enough To Save The Bolt
I think the uptick in EV adoption is exciting to see. So besides Tesla, what brands did well in Q1?
Really, it’s the ones that still qualified for the ever-changing EV tax credits, which at this point are cars that were made in North America and ideally have their batteries made here too. That’s reflected in the sales data, also via Automotive News:
Brands gaining EV market share include Chevrolet, Ford, Volkswagen, Rivian, Mercedes-Benz and BMW, Experian numbers show. Those losing ground compared with the first quarter of last year include Tesla, Hyundai, Kia, Audi, Nissan and Polestar.
Tesla gets the full tax credits, in many cases, but it lost ground due to increased competition. Those other brands listed generally didn’t qualify for tax breaks at all.
Hilariously, the Bolt and Bolt EUV made up 7.7% of EV registrations in Q1, up from—and wait for it, this is great—0.3% a year prior. Basically, once everyone realized what an insane, screaming deal a heavily discounted Bolt was, they ran every red light to their local Chevy dealers.
And then GM announced it’d be killed off in hopes you’ll buy a bigger, more expensive crossover EV instead. Another win for GM’s illustrious track record with EVs.
Also, while GM eagerly points customers to “its full lineup of EVs,” the only ones really on sale yet are the Bolt twins; the Cadillac Lyriq is perpetually MIA (only 945 were registered in Q1) and the rest are coming at the end of 2023 or next year and beyond.
So how about the rest? Ford came in third place with EV registrations — up a whole 82% year-over-year increase, although Mustang Mach-E sales were down due to supply issues but the F-150 Lightning made up that lost ground. The now U.S.-built Volkswagen ID.4 went up 244%, so it’s finally doing what VW wanted it to do, and Hyundai’s registrations were up 16% even as it lost overall market share.
Some nice news: Rivian had 7,134 registrations for the first quarter, way up from 704 last year. Good for Rivian’a it could use some wins lately.
Nearly at the bottom of that list are Toyota and Lexus. Total registrations of the bZ4x and RZ crossovers were at 1,708, below even Lucid. The world’s biggest automaker clearly has some catching up to do here.
Ford Actually Dials Back China Spending As Competition Heats Up
April’s Auto Shanghai show, the first major in-public Chinese auto show since the COVID-19 outbreak, seems to be a kind of terrifying wake-up call to the rest of the auto industry. They know well that they’re losing sales ground rapidly to homegrown brands, but after seeing all those cars in person—especially the EVs—the Western and other Asian brands are realizing that China may not be some magical golden goose forever.
That’s scary for automakers because China has become vital to their bottom lines. (In Q4 2022, for example, Chinese sales and joint ventures represented about a quarter of GM’s global revenue.) Some automakers are responding by upping their game in China, declaring it’s “comeback time” with bigger investments and more competitive products.
Farley at Ford is taking a different approach by cutting back investments there and offering some real talk, according to the Financial Times:
Ford plans to scale back future investments in China, as the US carmaker’s chief executive warned there was “no guarantee” Western carmakers could win against local electric-vehicle rivals.
The company will “put less capital at risk” by focusing on commercial vehicles such as delivery vans, and will instead use the market as a “listening post” to help it better understand battery technology, Jim Farley told the Financial Times.
“If you just reinvest in a new cycle of EVs in China, there is no guarantee, or no data, that would suggest the western companies win,” Farley said.
“The winners in China [in EVs] turn out not to be the [traditional carmakers],” he said. “It’s actually all the EV brands like BYD and Tesla, Great Wall, SAIC, and Changan, who are winning.”
He mentions Tesla there, but even that company has had its ups and downs in China lately and customers haven’t always responded well to those rapid-fire price cuts. But Ford’s doing significantly worse; it’s seen its Chinese market share get cut in half since 2016.
Now, Farley says Ford doesn’t want to leave China. But Ford instead will pivot to a “much lower investment, more focused investment” in things like commercial vehicles and vans over the next few years. Ford has also been cutting back on the models it offers in Europe.
What does it all mean for you, the car buyer and enthusiast who presumably doesn’t live in China? Just that the rise of that country’s auto industry—both on the home front and its increasing sales success in Europe—is one of the biggest stories in business right now and something that has the potential to upend the car market as a whole in the coming years. If the Western and Asian brands can’t win in China, they had better figure out what a very healthy Plan B looks like instead.
Airbag Manufacturer To NHTSA: Nope
What do you do if you’re a manufacturer of airbag inflators, and the federal National Highway Traffic Safety Administration tells you you should probably issue a recall of millions of your products because they could produce a shrapnel-like effect when they go off?
Apparently, when you’re Tennessee-based supplier ARC Automotive, you say no thanks.
That’s the situation facing the owners of some 67 million cars that may have faulty, dangerous airbag inflators, according to the Washington Post. NHTSA has identified at least seven cases between 2009 and 2023 where an ARC-supplied airbag inflator ruptured and a driver or passenger suffered injuries as a result; at least one was fatal. From that story:
NHTSA called for a recall after an eight-year investigation that included extensive product testing. The inquiry was upgraded after the July 2016 death of one driver, who had been hit in the neck by shrapnel.
ARC Automotive is a niche manufacturer of air-bag inflaters, small metal devices that send compressed gas into an air bag, activating it in the event of a crash.
During the manufacturing process, one part of the inflater is welded onto two pressure vessels. But sometimes excess metal called “weld slag” can be pushed outward along with any other debris, according to an April 27 letter signed by Stephen Ridella, director of the office of defects investigation at NHTSA. He wrote that the inflater is put together in such a way that debris of sufficient size can block the opening that shoots gas into the air bag, causing pressure to build up.
“Over pressurization of the inflater has the potential to cause it to rupture resulting in metal fragments being forcefully propelled into the passenger compartment,” Ridella wrote.
But ARC responded by saying NHTSA’s is “too broad” and technically unsound, calling these isolated incidents rather than a systemic problem. That story notes that ARC probably wants the scope of the recall to be narrowed because one of this size—and ARC is much, much smaller than Takata was—would be disastrous.
Several automakers with ARC inflators have carried out their own recalls over the years, however:
But NHTSA says potentially 67 million more airbag systems could still be affected; at least 12 automakers have used these inflators. The ball is now in NHTSA’s court and hearings could result.
It’s hard to know what to tell you to do here, except keep an eye on this issue. We certainly will. GM is already doing another recall of about a million crossovers over ARC inflators, so you may get a notice in the mail if you’re impacted. If ARC doesn’t handle this, the automakers hopefully will.
Your Turn
I wonder how many of those Bolts Bolt EUVs are people’s primary vehicles, vs. secondary or tertiary runabouts where the appeal is just commuting without gasoline. Probably a mix of both.
Either way, what do these trends tell you about America’s EV market? My take is that if the goal was to encourage automakers to build EVs locally, the tax breaks seem to be working, but they’re so limited right now that these market gains could lose steam until more manufacturing ramps up.
Assuming I found a replacement for my other car this year (not going well), my plan was to consider replacing my Prius next year. The Bolt was an early front runner.
It was cheap enough where I can deal with the downsides of an EV with that car that usually just ferries me to work. Range is long enough to not worry about much on a daily basis. Our other car heads to the sticks where charging infrastructure doesn’t exist, so no go on an EV there.
Teslas getting cheaper is somewhat tempting, but then their CEO opens his mouth (or unlocks his phone) and reminds me why I don’t want to give them a nickel.
I’m not spending $50k+ on a “commuter car”, so forget about the Ioniq 5, EV6, Mach E, etc. I’ll just buy another Prius for $35k when the dust settles with its launch.
Get a Bolt – 200hp, 288torques, agile and fun. Live life to its fullest ….
I use a Bolt as a company vehicle in pest control. I put about 20k miles a year on it. It’s an amazing car and dead reliable.
The seats suck (mine is a 2017) so I put seat covers in it and stuck some foam under the seat covers to fix them
I think this is why people are snapping them up: Whatever GM replaces them with will be less fun, less interesting, and …well…just less.