Catalyst with Shayle Kann - What’s really happening in the U.S. EV market?

Episode Date: February 1, 2024

A recent slew 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. Meanwhile, EV market share reached 9.5% in 2023, up from 7.5% in 2022, according to BloombergNEF.  Still, there have been real 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 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. Catalyst is brought to you by Atmos Financial. Atmos is revolutionizing finance by leveraging your deposits to exclusively fund decarbonization solutions, like solar and electrification. Join in under 2 minutes at joinatmos.com/catalyst.

Latitude Media, podcast at the frontier of climate technology. I'm Shail Khan, and this is Catalyst. I think this kind of 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. The doom and the gloom amidst the boom, it's the U.S. electric vehicle market, And also a very catchy phrase, if I do say so myself. When utilities need flexible capacity they can count on, they turn to Energy Hub.

Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale. predictive, verifiable, and designed to perform when it counts. Learn more at Energy Hub.com. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone.

They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. tune in as we unpack how progress is actually made. Listen to critical capital on Spotify, Apple, or wherever you get your podcasts.

I'm Shail Khan. I invest in revolutionary climate technologies and energy impact partners. Welcome. So the narrative in the news ain't great. I feel like I've probably seen a dozen, maybe a couple dozen articles in mainstream press over the past few months that are bemoaning the apparent struggles of the U.S. EV market. Here's one just picked from the random sampling headline from the Wall Street Journal from late December. Quote, how electric vehicles are losing momentum with U.S. buyers in charts, exclamation point. 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 include. 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 going 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, you know, 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. Thanks for having me today, Shale. 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. You just kind of run me through the litany of recent news that has come out that is delivering a sort of bearish sentiment to people who are looking to the EV market here.

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 B&EF 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 years ago? and it's a more macro conversation. What is a successful U.S. 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 kind of EV metrics, but impressive nonetheless. Right.

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 announcement, 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 OEMs were announcing, and this happened repeatedly, that they were going to scale back on planned production expansion, right? 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. Right. And I think the other fair assessment that in some of the conversations with dealers, for example, if you see specific EV models kind of piling up on lots for longer than average, say, 150 days or so, or 100 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 kind of has its own rhythm and flow to it. And then one other point on the, I guess, aspect around the dealer lot kind of EV pile-up,

that often doesn't take Teslas and Rivians into account. So often you'll have people saying, oh, my goodness, the USEV 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 kind of 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 do auto market, would love to see 50% year-in-year growth as a whole.

Well, that's a good point, right? So let's compare, let's look at, 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? Yeah. So if we go back to, I graduated from grad school in 2019, the EV share of sale in the U.S. 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 together, but the Bev and Phev split is 8020 in the U.S. Because Tesla has played such a dominant role. Again, we want to see U.S. EVs break that kind of 10% barrier.

It would have been, 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 drive trains. You had hybrids doing really well. You had EVs doing really well. And you had the total market doing well, ending up at about 15.5 million vehicles. We kind of, 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 U.S. market, but as you're looking at Europe and China, what is EV share of sales?

versus just absolute because the U.S. 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. Okay, so everything was up in terms of auto sales last year, but EVs gained share still, right? You said from 7.5 to 9. something. So, you know, EV is still growing faster than the overall market. So I guess, you know, I see, I still want to tease out this what has happened versus what seems like it will happen. Like, why, 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?

And 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. I mean, you can't talk about cars in America without talking about the big three, general motor. orders Ford and Stalantis. And really, they had mediocre years last year, right? So let's take Ford, for example. In 2022, they had around 60,000 EV sales. Pretty solid, but, you know, 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, you know, EV sales. So there was growth, but there wasn't this massive growth. There wasn't doubling of sales. Ford also has only two EV models, the F-150 Lightning and the Machi. So again, one of those models, the Mackey 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 the GM, I think an even more complicated and potentially more problematic situation there. So 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 lyric. Meanwhile, GM was selling a lot of Chevy bolts and bolt UVs, which used the previous battery platform,

which was a far more, I'd say, archaic battery technology, but still gets the job done. A lot of people really like the Chevy Bolt. GM's sales overall was about 76,000 units, so actually beating out forward by a little bit, but around 80% of those vehicle sales were the Chevy Bolt. And only about 20% or so was the Cadillac Lyric, the Hummer EV, a couple. of Chevy Silveradoes and a handful of Blazers. GM also had a bunch of software problems with their blazers, which was their kind of hyped next big vehicle, and they put a stop sale on the blazer at the end of 2023. So big takeaway, though, is that the Bolt was doing awesome, but then GM had planned to and

successfully ended production on it, that kind of previous generation of the Bolt. So as we head into 2023, their most popular EVs off the market, and now they have to ramp up this battery, you know, 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 of the lightning, which is kind of 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,

Stalantis, they have a very successful plug-in hybrid. The GVs, Rangler Peehav that honestly has flown off the lots left and right and done really, really well for a plug-in 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're reading reports and thinking about the U.S. market, you want to see Ford, GM and Stalant is 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, that Tesla occupies in terms of competency on their kind of scale-up of EVs.

Okay, so you could hear all of that and come to the conclusion that, okay, this is not really an EV market, a forward-looking EV market problem. It's a problem that is sort of idiosyncratic and specific to what's going on with Ford and GM and Stalantis 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 turned to Tesla and there have been a couple of things that have happened recently that might make you reexamine that. One being Hertz's announcement of selling off like a crazy number of Tesla 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. Or between two waves. Yeah, between two waves. It's like between two ferns, but of cars. So Tesla would be the counter example to Ford GM and Stalantis here. Is it a counter example, or are we learning that it's subject to some of the same challenges? I think Tesla's challenges are less on the scale-up side, right? 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, 1.7, you know, 5 million of all the vehicles sold were three 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 Y is delivered. Even for us at BNEF, we have a data provider that will break out, you know, by region what the model Y is based on their estimates. And then we'll have to kind of rejigger it based on what Tesla says and make sure that everything lines 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 three in 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 duckout in the Tesla lineup, BS, which was their original premium sedan, and then the cyber truck, 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, you know, the cyber truck has been a bit of digging their own grave in terms of how difficult production on the cyber truck is. So between the Model Y coming out, that's 2020, and now we're in 2024 when the cyber truck 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 kind of 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 three are doing well, but they're pretty old too. The three 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 U.S. 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 U.S. competition. But with Tesla timelines have always been moving. And even Musk said that he tries to be optimistic, but these things tend to to be pushed back. That car is going to be really important. They have to get that right. Virtual power plants are becoming a reliable way for utilities to manage capacity, but enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched and being able to prove it from the control room to the living room. Energy Hub's

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by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital. As I talk with people deploying capital, shaping policy and building projects. Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to Critical Capital on Spotify, Apple. or wherever you get your podcasts. Back to this sort of core question of like, do all of these,

are all of these data points signals or noise in the, in the like 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 production, expected production slowdowns from Ford and GM and Stalantis and look at what's happening with those individual companies.

You can point out that Tesla has limited models and 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? I mean, first of all, explain what Hertz announced, but then I'm curious what your take on it is. Yeah, so 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, and Hertz said a little bit less to this point, but they took a big residual value loss on those Hertz's. 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 kind of 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 Y's that Hertz was likely to have bought because that's when they made their announcement that they were beginning to purchase those EVs was in the $60,000 range or the high $50 to $60,000 range. If you look at the kind of 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 filled up enough charging, infrastructure at their various facilities, they weren't seeing the full kind of benefit of charging at home or residentially, as opposed to having to use specific services to recharge their EVs. I even took a Hurt, 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 who understands 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 because you have to travel on the highway and that's less regenerative braking than your kind of city driving, especially in a place like California. So to answer your question, I think it was a couple of factors that hurts in that position.

I think there's been a lot of pointing at, you know, EVs aren't good. EVs are a mess, EVs are better 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 was reducing 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 kind of fleet customers, if someone is going to move to a new Tesla to buy as opposed to buying your 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 U.S., 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, you know, as possible. But going back to the original conversation we were having on Tesla, most other automakers would introduce a new vehicle model, right, or kind of keep prices relatively constrained. 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, you know, just an individual owner of feeling jaded. Okay, so we've talked about four GM Stalantis. We've talked about Tesla. What about Hyundai and Kia? I mean, they're, they seem to be the sort of insurgent players in the EV space, at least in the U.S. Yeah, so 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 because we have preliminary data that comes in

and it gets updated a little bit. So even since I last kind of published a piece on it, we went from about 117,000 up to about 122,000. Their strategy has been a little bit similar to BID in that they don't just have two EVs. They have the Ionic 5, which is a crossover. They have the Ionic 6, which is a sedan. They have the Kia EV6, which is basically similar to the Ionic 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 as the Kia EV9,

which is the first major EVVY outside of the Rivian R1S, 2B3 row SUV, kind of reaching out to that family demographic. the Kia EV-9 start to the 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 Nero and the Hyundai-Kona. So you have some PHAVs 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 the first generation

from about 2016 to 2019 that weren't particularly good. the original Ionic and kind of earlier kind of Kia EVs were being sold in the U.S. 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 Honda-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 kind of a, I wouldn't say, completely flood the zone mentality, but they have started to kind of differentiate themselves in that kind of US pack of EV market share. Well, you mentioned BID,

and we are talking about, primarily talking about the U.S. market, but still, I want to ask about the Chinese auto OEMs. Like, what is both what's happening in China and globally, and do you foresee a world in which they do enter the U.S. for passenger vehicles? Obviously, BID is already here for electric buses and stuff like that. So what's crazy about BID 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. So you would just see, 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. You know, your Bavs, P-Havs, FCVs, if there are any FCVs. And BYD suddenly starts to see this kind of 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 3 million units in. in 2020. And at that point, BID begins to kind of go global. They're looking at the European market. I had spoken to some folks in Israel, and they said that BID 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 kind of, went for it. You know, as we were just talking about with Honda IKEA, 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 years. But if you're serious about it and you make the transition and you have the battery manufacturing expertise, which, again, B.YD 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 because you don't see, even with Tesla, it took many, many years for them to, you know, 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 3 million, about four calendar years later, is crazy. Do you foresee them

entering the U.S. market in the passenger world? So they have expressed a lot of frustration with the IRA and the fact that there is the FIAC 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 being really tough on, even their Chinese, you know, their bus business, they're going to Mexico right now. And I think they're keeping an eye on the U.S. 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 their subsidiaries of Gilles,

I think that's the first major Chinese automaker releasing EVs in the U.S. But I think if BID 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 kind of fourth quarter investor call on their mass market EV? Part of BID'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 kind of premium that Tesla has.

So if Tesla is successful and gets that mass market car there, maybe the U.S. 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 kind of tariffs

of around 27% on Chinese cars and IRA access, they would already be here. But given these kind of hurdles, they are not. And I don't think they've made any plans to come here yet. All right. So stepping back on all of this, then, like, 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? Like, what do we think is

going to happen here? So we just really started your head at the end of December, and we see about 32% growth. So you can say in some respect 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, right? 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 kind of 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 kind of 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 Ribbian, Hyundai, Kia, Volvo to power the U.S. market, and then Tesla to kind of stabilize.

So for that reason, we have a 32% kind of base case for this year. I think Cox Automotive has released their year ahead, and that's about 35% year-in-year growth. So neither of these are kind of end-of-world EVs falling off. But again, it's a slowdown 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 in that, chill,

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 a $36,000 or less range, you're unlocking about half of the U.S. new passenger car sales market. So I think that's also been an element that, 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 U.S. market compared to Europe or China. But just in terms of the pricing, right,

if you're pricing a Ford F150 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, 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 30s or the high 20s, you're unlocking almost that 50%.

7 million in annual sales, assuming 14 million is the kind of... Honestly, the U.S. 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.

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? Yeah. So Cox Automotive released this study in the middle of last year, surveying buyers and across the kind of overall auto market. And the two top concerns for EVEs, one was upfront costs, 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 have been the 2021 number, but still in the 30% either way for 2022. One kind of aspect of public charging that's been so frustrating to watch from the data perspective is just how slow U.S. 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 chargers. 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 Eviga 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 consumers too big concerns. And so when I'm speaking to people, both BNEF clients or in the kind of 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. All right, Corey, thank you for helping me walk through all this noise, finding the signal and reading the noise. Thanks, Hale. Really appreciate your time. Corey Cantor is an analyst at Bloomberg NEF focused on EVs. This show is a production of Latitude Media.

You can head over to Latitude Media.com for links to tautitude.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 Waldorf. Mixing by Roy Campanella and Sean Markwan. Theme song by Sean Markwan. I'm Shale Khan and this is Catalyst.