The first quarter of the new year noteworthy in the American automobile industry as sales of new vehicles saw an increase of nearly 5%, despite the sting of high-interest rates. The automobile market remained enticing to buyers during January to March, with close to 3.8 million vehicles rolling off dealer lots, posting an annual sales rate of 15.4 million.
However, the electric vehicle landscape presented a stark contrast. Following a previous year filled with robust growth and record sales, the first three months of the current year saw electric vehicle sales taking their foot off the pedal, posting a mere growth of 2.7%, well below the 47% increase that sparked their previous year’s performance. Through the quarter, just over 268,000 car buyers opted for electric vehicles, leading to a drop in total U.S sales share to 7.1% this quarter from the 7.6% of the previous year. Auto insiders concluded this tepid demand was due primarily to concerns over the limited range of electric vehicles and insufficient charging infrastructure.
Price tags on vehicles across dealerships held a more palatable appeal for buyers as automobile companies, encouraged by inventory levels nearing pre-pandemic numbers, undertook significant price slashing. Market research firm J.D. Power reported an average sales price standing at $44,186 for March, a decrease of 3.6% when compared to the same month the previous year, marking it as the greatest fall for March on record. It further added that company concessions in March outstripped those of a year ago by two-thirds, hovering around the ballpark of $2,800.
Electric vehicles aside, the start of the year has been robust for most auto manufacturers, the noticeable exception being General Motors, Stellantis, Kia, and Tesla, who kicked off the year posting sales declines.
General Motors, holding its place as the lead auto seller in the U.S., saw a dip of 1.5% in its first-quarter sales figures. Stellantis didn’t fare much better, with sales taking an almost 10% hit. Kia reported a slim decrease of 2.5%.
Toyota, on the other hand, roared its way into the new year with a sizable boost in sales, posting an increase of 20%. The company further noted that combined sales of its hybrid models and sole electric vehicle notched up a growth of 36%. Other manufacturers such as Honda, Nissan, and Subaru all enjoyed sales upticks of 17% and 7% respectively. Hyundai edged forward with a negligible growth of 0.2%.
Tesla’s numbers, however, painted a gloomier picture. Plagued by setbacks such as power outages at its Germany-based factory, factory modifications for their Model 3, and shipping delays, the electric vehicle giant found itself at the wrong end of the sales graph with a significant drop of nearly 9% in global sales. Motorintelligence.com estimated that Tesla’s U.S. sales, in particular, suffered a harsh blow, taking a steep fall of more than 13% during the initial three months of the year.
While the first quarter has ended on mixed notes for the various players in the auto industry, competitive pricing strategies, and cautious optimism about potential interest rate cuts may spur an even more eventful period in the coming months.
