U.S. EV Sales Plunge Sharply, California Q1 All-Electric Vehicle Sales Drop 40% Year-Over-Year

In the first quarter of 2024, U.S. new energy vehicle (NEV) sales declined by approximately 27% to 28% year-over-year, with the market penetration rate of battery electric vehicles (BEVs) dropping to 5.8%. California, the largest NEV market in the U.S., saw BEV sales fall by 40.2% year-over-year during the same period, and its BEV market share dropped from 21% to 13.7%. At the federal level, the $7,500 tax credit for purchasing qualifying electric vehicles has been eliminated. Previously, this policy provided consumers with a tax credit when buying eligible EVs. During his 2024 presidential campaign, Donald Trump stated he would eliminate all incentives for new energy vehicles. This move has placed EVs in direct competition with internal combustion engine vehicles without subsidies, raising purchase costs for consumers. California has launched a $200 million state-level EV incentive program, offering a $3,500 rebate to first-time EV buyers. However, the program stipulates that vehicles priced above $50,000 are only eligible for the subsidy if they are produced by California-based automakers—effectively excluding most of Tesla’s core models. Amid policy uncertainty, traditional automakers such as Ford, Stellantis, and General Motors have reduced EV supply and marketing investments, recorded asset impairments related to EV initiatives, and some have shifted their focus toward hybrid and range-extended electric vehicle technologies. Meanwhile, hybrid vehicle market share in the U.S. has risen significantly; Toyota’s electrified models (including hybrids) accounted for 50.5% of its total U.S. sales during the same period.