Report: Electric vehicles make only ‘gradual progress’ in penetrating new car & light truck market

“In-depth analysis of the impact of Electric Vehicles (EV) on the car and light truck population and aftermarket product volume across the U.S. is presented in the just-released 2022 Lang Aftermarket Annual, which has been expanded by more than 70 pages and includes, for the first time, an extensive Infographics section.

“The new 2022 Lang Aftermarket Annual, which contains 11 pages of expanded Electric Vehicle analysis, presents information available nowhere else. Growth of new EV sales, their share of vehicles in operation (VIO) and the impact of EVs on aftermarket product volume are presented from a historical perspective along with future projections to 2024. ”

— Jim Lang, publisher, Lang Aftermarket iReport

Four Important Market Sectors

The 2022 Lang Aftermarket Annual provides extensive coverage of four emerging and highly-important market sectors (Electric Vehicles, eCommerce, Mobile Repair, and Remote Working) plus a new 30-page Infographic Executive Summary.

Two weeks ago, the Lang iReport (issue 21023) focused on the surge of eCommerce auto parts volume, the growth of the three classifications of eCommerce auto parts sales (Do-It-Yourself, Business to Business, and o2o) and 1P and 3P eCommerce auto parts transactions involving Platforms (Marketplaces) and eSellers.

Electric Vehicle Sales

Despite ongoing hype, EV penetration of the new vehicle market has been gradual, at best, through 2020.

Combined, Plug-In Hybrids Electric Vehicles (PHEV) and Battery Electric Vehicles (BEV), represented only 2.0% of 2020 new car and light truck sales, less than their 2.1% share of the 2018 market, and up from 0.9% of 2016 volume. From 2018 through 2020, the EV share of the new car and light truck market has been flat.

Changing EV Sales Mix

The mix of EV new sales has changed significantly between 2016 and 2020.

Plug-in Hybrid Electric Vehicles (PHEV) accounted for nearly half of 2016 EV volume. However, by 2020, PHEV share plunged to less than 25%, while the BEV share of EV sales soared by nearly one-half between 2016 and 2020, from just over 50% to more than three-quarters of the Electric Vehicle market.

Tesla Dominates EV Sales

The Electric Vehicle market in the U.S. is dominated by Tesla. In 2020, Tesla captured nearly 80% of BEV sales and 60% of total Electric Vehicle volume (BEV and PHEV) in the United States.

Before Electric Vehicles can gain a larger share of the new car and light truck market in the U.S., it will be necessary for other EV brands to generate meaningful consumer purchase interest.

Through 2020, the EV new vehicle market in the U.S. remains Tesla centric and has not yet moved beyond being an “enthusiast” market.

For EVs to gain a larger share of new vehicle sales, they must appeal to a much broader segment of the car-buying population, not just consumers with a Tesla focus.

Vehicles in Operation

Despite EVs (PHEV and BEV) recording a 2.0% share of 2020 new vehicle sales in the U.S., their share of total vehicles in operation (VIO) remains low. In 2016, EVs accounted for 0.2% of the total cars and light trucks on U.S. roads.

Over the next four years, Electric Vehicles increased their VIO share, but it remained considerably below 1.0% by 2020.

ICE Vehicles Dominate VIO

Internal Combustion Engine (ICE) vehicles continue to dominate vehicles in operation (VIO) across the U.S. In 2016, the ICE share of VIO stood at 99.8%. By 2020, ICE’s share of VIO had declined by a total of less than 0.5%.

Aftermarket Impact

The EV share of the total car and light truck aftermarket product volume in the U.S. was less than 0.5% in 2020 despite the modest increase in their new vehicle sales over the previous four years.

Since a new vehicle does not begin to generate meaningful aftermarket volume until its fourth year on the road, it will be sometime until EVs have a substantial impact on the aftermarket, even if their sales significantly increase over the next few years.

Six Major Takeaways

  • Electric Vehicles (PHEV and BEV) have made only gradual progress in penetrating the new car and light truck market in the U.S. through 2020.
  • The Battery Electric Vehicle (BEV) share of Electric Vehicle sales increased significantly between 2016 and 2020, as Plug-In Hybrid Electric Vehicles (PHEV) declined in EV sales share.
  • Tesla dominates the Electric Vehicle market in the U.S. with nearly 80% of BEV sales during 2020 and 60% of total EV sales. BEV new vehicle volume will not gain growth traction in the U.S until many other EV nameplates generate meaningful consumer purchase interest.
  • Electric Vehicles have made only modest progress in expanding their VIO share between 2016 and 2020.
  • It will take some time for EVs to have a meaningful aftermarket impact (except for Tires and certain Accessories) since a new vehicle does not begin to generate significant aftermarket product volume until its fourth year on the road.
  • See the all-new 2022 Lang Aftermarket Annual for projections of the EV shares of vehicles in operation and aftermarket product volume to 2024.

Copyright 2021 by Lang Marketing Resources, Inc.

NOTESpecial thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.