Electric Vehicle (EV) Trends To Watch In 2023
Updated: Oct 27, 2022
The EV market is one of the most dynamic segments of the clean energy industry. Last year, global electric car sales rose to 6.6 million, representing nearly 9% of the global car market and tripling its market share from 2019.
Rising gasoline prices have made EVs appealing to many drivers, and the Inflation Reduction Act has extended EV tax credits on eligible models through 2032. Efforts are underway to improve the EV charging infrastructure and extend the range of EVs, which is instrumental for EV market growth. But, supply chain shortages caused by the pandemic linger, and are still causing issues for automakers. Let’s examine what EV market trends lie ahead in 2023.
More EV Models Are Coming
Many new EV models will hit the market in 2023, especially electric pickups and SUVs, and plug-in hybrid electric vehicles (PHEVs). Many of these models are getting a lot of hype for their design and style.
Some New EVs Coming Out In 2023:
Tesla Inc. has announced that it will release the long-awaited Cybertruck with a starting price of $39,990.
The Chevy Blazer EV will start at $47,595 and have an estimated range of 297 miles.
The Chevy Silverado EV is set to launch with a price tag of over $100,000.
The 2023 Nissan Ariya crossover SUV boasts a range of up to 304 miles.
The sleek BMW i5 will have a driving range of 372 miles and a starting cost between $65,000 and $70,000.
The futuristic and stylish Hyundai Ioniq 6, with a starting price of $44,000 and a range of 320 miles, is like the slick cousin of the Ioniq 5.
Volvo announced it will only sell electrified models in the United States starting with the 2023 model year, which includes hybrids and all-electric vehicles. Despite being a leader in PHEVs (which have both an electric motor and an internal combustion engine) and announcing a lineup of all-electric EVs, Toyota lags behind numerous automakers in all-electric vehicles.
Infrastructure Still In Catch-Up Mode
U.S. car shoppers remain very concerned about the lack of public EV charging station options, which could deter some from choosing an all-electric vehicle. However, the trend of an increased driving range is helping to counter these concerns because drivers don’t need to charge as frequently.
Although the infrastructure bill that passed last year (2021) included $7.5 billion for 500,000 new EV charger subsidies, some experts say that number is too low. Given the sales forecasts for electric passenger cars, pickups, and SUVs, a robust charging infrastructure is critical.
Public EV chargers are critical for greater EV adoption, especially among specific demographics. For example, apartment dwellers may not be able to charge at home if they lack a dedicated parking spot with access to electricity. Likewise, it is still difficult to go on road trips in more remote areas of the US with an EV because there are few charging options in certain rural areas.
Batteries Continue To Get Better And Better
The range of EVs continues to improve, thanks to advances in lithium-ion battery technology. Now, many new EV models have ranges over 300 miles, with some surpassing 400 miles. However, most EVs with the longest driving range tend to be more pricey.
Of 2022 models, these are among the leaders in driving range, thanks to improved battery capacity:
Lucid Air - 520 miles
Tesla Model S - 405 miles
Tesla Model 3 - 358 miles
Mercedes EQS - 350 miles
Tesla Model X - 348 miles
Tesla Model Y - 330 miles
GMC Hummer EV - 329 miles
BMW iX - 324 miles
Ford F-150 Lightning - 320 miles
Rivian R1S - 316 miles
Rivian R1T - 314 miles
Kia EV6 - 310 miles
In addition to the range, producing more affordable batteries that rely on fewer scarce resources is also critical. Likewise, addressing safety issues associated with thermal runaway helps earn customer trust.
Will We See Hydrogen Cars In The Near Future?
These vehicles use hydrogen fuel and have internal combustion engines, hydrogen fuel cells, or gas turbine engines and rely on hydrogen fueling stations for energy. However, a January 2022 study by Nature Electronics predicts that fuel cell EV technology will not play a significant role in the clean transportation movement of the future.
The automotive industry seems to have focused more on battery electric vehicles (BEVs) and not so much on hydrogen fuel cells. Also, recent advances in battery technology have increased vehicle range, making fuel cells seem less appealing.
Confusion On How To Meet EV Tax Credit Requirements
Although the Inflation Reduction Act extended the EV tax credits through 2032, this incentive has many new requirements. One goal behind these criteria is to encourage low to moderate-income households to buy new or used EVs. Also, there are requirements that the EVs are assembled in North America to promote domestic EV manufacturing.
To qualify for the tax credit, the price of new electric SUVs and pickups cannot exceed $80,000 and $55,000, respectively. So, some Lucid, Rivian, Porsche, Tesla, and BMW models, plus the GMC Hummer, Chevy Silverado, and Ford F-150 Lightning, among others, will not be eligible for the tax credit. There is also a limit on annual income of $150,000 for individuals and $300,000 for joint filers. Please encourage clients to consult a tax professional to understand what they can qualify for.
Due to these changes, there has been a lot of confusion as car shoppers and EV professionals get acquainted with the new EV tax credit requirements for zero-emission vehicles. This will also likely cause automakers to scramble to meet these requirements, which will gradually phase in over time, especially those around manufacturing. Even General Motors and Tesla may have issues meeting the new EV battery requirements for the tax credits.
Uneven EV Sales
Global electric vehicle market sales vary widely, with China, France, Germany, and the United States leading the way. Yet others, including Japan, South Korea, India, Mexico, and Canada, lag far behind.
Total EV sales and per capita sales are quite different, and EV adoption is quite high per capita in certain countries in Europe, including Norway, Iceland, Sweden, and the Netherlands. In the United States, EV adoption has been very uneven, with California, Florida, and Texas leading the nation in EV ownership.
High Gas Prices Continue To Fuel EV Demand
Gas prices in the United States have increased since the start of the war between Ukraine and Russia and will likely stay relatively high for the short term. In addition, OPEC recently cut production by 2 million barrels a day, which will likely increase prices at the pump. These high prices, coupled with inflation and increased prices across other sectors could push more drivers to buy an EV in the near future.
EVs Will Continue To Drive Trends Through 2023 And Beyond
The electric vehicle market in 2023 will continue to be very dynamic due to high gas prices, new attractive EV models, and the federal EV tax credits fueling demand. In addition, advances in battery technology are extending the range of new EVs, helping to reduce consumer concerns about driving range anxiety.
Want to learn more about EVs? Check out our article on MPGe.