2018 was a year of tremendous growth in the electric vehicle market. We saw new electric cars released (and one of our favorites get cancelled), two manufacturers hit the 200,000-vehicle tax credit cap, and across the county we hit record sales numbers. A few highlights include:
- The Unites States hit 1,000,000 electric vehicles sold.
- December had the single highest electric cars sales of any other month, ever.
- Electric vehicle sales increased 81% from 2017.
It’s safe to say the electric vehicle market is officially on the rise. We ended the year with 361,307 electric cars sold across the country, making up 6% of all passenger car sales!
2 Manufacturers Hit Tax Credit Cap
Tesla and GM have both sold over 200,000 electric vehicles. A great start down the adoption curve for electric cars, but also a signal that customers won’t receive their full tax credit on these cars any more.
After a manufacturer has sold 200,000 electric vehicles, the consumer tax incentive is reduced for that manufacturer’s vehicles. The full tax credit, $7500, remains for the rest of the quarter in which they hit the cap, plus the next quarter. After that, the tax credit is halved for 6 months, then halved again for the next 6 months, before expiring entirely.
Tesla hit the 200,000-vehicle cap in July, 2018 so their tax credit went from the full $7,500 to $3750 on January 1. From July 1 to the end of the year it’s halved again, to $1,875. Tesla buyers won’t see any tax credit in 2020.
GM hit the 200,000 mark in December, 2019 due to their all-electric Chevy Bolt and popular, although discontinued, plug-in hybrid, the Chevy Volt. GM vehicles can receive the full credit until March 31st. From April 1 to September 30 buyers will get the halved credit of $3750, and then $1875 until March 31st 2020.
Tesla made for a record-setting December
In December, 49,900 electric vehicles were sold – 10% of passenger car sales that month! 50% of those sales were thanks to the Tesla Model 3. Tesla pushed hard for customers to order their car before the end of the year because of the tax credit deadline. They went so far as to keep stores open until midnight on New Year’s Eve to get as many customers into inventoried vehicles as possible.
What it means for 2019
2019 is an excellent year to go electric, especially if you have your eye on a Tesla or GM model and want to capitalize on the tax credits. Manufacturers have been pushing to extend the tax credits, though with limited success. Their reason being that it’s unfair to penalize the manufacturers that are first to market by reducing the consumer incentive to purchase their vehicles. And I agree – why punish the innovators? I’m expecting to see more activity around the subject in 2019.
There are also a number of new electric vehicles coming to market. Hopefully we’ll see more SUV and truck options hit the streets in the next few months. From Kia and Hyundai, to BMW and newcomers like Rivian and Faraday Future, it’s shaping up to be an exciting year for electric car debuts.
In the next blog, I’ll do roundup of new models that will be available in 2019.