US EV market big enough for NIO, BYD, LI & XPEV.
Question: Is there room for EV growth in the US?
Electric vehicles (EVs) are a “fast” growing segment in US.
The interesting question is how much market share have EVs taken from traditional gasoline cars?
Based on Year 2022 data from US Department of Energy, not much really. (see below)
The above diagram is about US vehicle registration based on Fuel Type.
There are 3 categories of fuel:
Gasoline.
Electric & plug-in hybrid vehicles (EV & PHEV).
Alternative fuels.
Notes:
Gasoline fuel type includes (a) diesel, (b) E85 flex fuel & (c) traditional hybrid vehicles.
Alternative fuels include (a) biodiesel, (b) natural gas, (c) propane, & (d) hydrogen.
Data Analysis.
One important distinction to make is — registrations are not the same as sales.
Sales represent the number of new cars sold within a timeframe.
Registrations reflect the number of cars that are registered with a state’s Department of Motor Vehicles (DMV). It includes both:
New cars.
Used cars that have changed ownership.
This provides a more comprehensive measure of what cars are on the road.
Table shows data used in above graphic.
EV Market Share in US.
EV adoption in the US has been really sluggish, when compared to the EU and China.
This is beginning to change as automakers roll out more electric SUVs and trucks.
According to Cox Automotive, US EV sales (full battery electric) in Q2 2023 set a new record of 300,000 units, marking a +48% increase from Q2 2022.
For additional context, a total of 800,000 EVs were sold in the US throughout the entire year of 2022, in addition to 190,000 PHEVs.
EV Adoption in US:
EV distribution in the US
Apart from sluggish EV take up within US (the country), adoption within US 50 states is also not uniform. (see above).
Translating above information on a US map, a pattern of sort emerges: (see below).
The top 5 states where EV adoption is the highest are coastal states.
West coast states to be precise.
As for the bottom 5 states, they could be found in Midwest, West and South regions. These are states that are closed to nature, mountains and scenic views.
What Data Has Revealed: (my views & mine only)
EV potentials optimistically stand at 98%, that is existing gasoline car population percentage.
The unknown factor is the rate of EV adoption in the US.
Despite the incentives offered by US government for new car buyers, not every car buyer is taking the bite.
It does not help that ICE car makers continue to push out gasoline cars, that are failproof after so many years of “tried & tested” technology and manufacturing process.
This is a hard habit to break, not to mention the hordes of workers who have been with the car making firms.
In 2021, at the UN Climate Change Conference, 6 automakers & 30 countries signed a pledge to end sales of gas and diesel-powered cars worldwide by 2040.
The agreement also includes phasing out sales of those vehicles by 2035 in “leading markets.”
$Ford(F)$ , $General Motors(GM)$, Mercedes Benz, Volvo, Jaguar Land Rover, and Chinese automaker BYD all signed, as did two dozen fleet operators including Uber.
On an optimistic note, low EV adoption presents immense opportunity for Chinese EV makers to take a bite out of the US EV pie; that is huge and inviting.
Having a presence in the US, gives US drivers choices and a chance to buy an EV they like and not be restricted to only US made EVs.
$NIO Inc.(NIO)$ has made plans to enter the US market in 2 years’ time in 2025.
It just maybe the “right” time to debut, taking into consideration (a) US economy and its (b) cooling inflation state.
In 2 years’ time, NIO Management team should have a better grasp of the global market for NIO’s EVs and fine tune them to be even more universal in appeal.
Hopefully by then, it would also vindicate their strong conviction that swap stations is the way “right” approach for EVs to cut down (a) the need for battery ownership and (b) the need to plan the time required to recharge one’s battery before making a road trip, preparing for public holiday usage etc…
Their recent collaborations with Chang’an and Geely is a testimony that swap station approach and technology will evolve and become a viable revenue stream as take up grows.
The same will apply to $BYD Co., Ltd.(BYDDY)$ , $Li Auto(LI)$ and $Xpeng.
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Do you think US adoption of EV will continue to grow exponentially or will it just crawl along as long as there is no push factor?
Do you think Chinese EV makers (BYD, NIO, LI, XPEV) will be successful in cracking the US EV market that is supposed a tough nut to crack?
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