Electric and Hybrid Vehicle Sales Increase During 2023: EIA

Battery, hybrid and plug-in electric vehicle sales as a whole increased across the U.S. during 2023 and accounted for 16.3 percent of total new light duty vehicle sales, according to a Jan. 31 report published by the U.S. Energy Information Administration. During 2022 battery, hybrid and plug in vehicles accounted for 12.9 percent of total sales. The increase in electric vehicle sales can be attributed to a number of factors, which include enhanced battery capacity, cost savings due to lower EV prices and environmental concerns. Moreover, government policies have been critical in driving the demand for EVs, despite a semiconductor chip shortage during 2023.

Manufacturer price reductions were also evident during 2023 and attractive credit conditions through the Clean Vehicle Credit and Qualified Commercial Vehicle Credit from the 2022 Inflation Reduction Act also reduced the cost of purchasing battery electric vehicles and hence increased the demand for the vehicle type.

There was a reduction in the number of hybrid models during 2023, yet sales rose drastically across existing models. The reason for this is because manufacturers made more hybrid crossover options accessible, which was the most popular vehicle market segment and decreased the least popular vehicle market segment, cars.

The price of battery electric vehicles declined during 2023, with the reduction in Tesla’s price being pivotal for the overall battery EV market. The average Tesla vehicle price declined 29 percent between June 2022 and December 2023.

The Infrastructure and Investment Jobs Act, which was signed into law in November 2021, provides $7.5 billion to develop a nationwide charging network. In addition, the law also encompassed funding to advance the U.S. electricity grid and enhance domestic battery manufacturing and recycling capacity. From a consumer perspective, the Inflation Reduction Act incentivized the purchase of electric vehicles by extending tax credits for the purchase of new vehicles and allowing tax credits for used EVs.