US car buyers are going electric at a record pace. The overwhelming demand is causing some states to temporarily pause EV incentives designed to promote adoption.
Despite overall auto sales falling, electric vehicles were a bright spot in the industry last year. According to data from Cox Automotive, total US auto sales fell 8% year-over-year (YoY) from 2021, but EV sales climbed 65%, passing 800,000 in volume for the first time.
The trend is not slowing this year either. The latest data shows EV sales broke another record in Q1, surpassing 250,000 and claiming over 7% of total US auto sales.
There are several reasons for the rising demand for EVs – for one, more availability. Tesla continues to churn out a record number of electric vehicles, producing over 440,000 units (up 44% YoY) in the first three months of 2023.
Perhaps more importantly, a slew of new EVs are becoming more widely available, hitting all the market sweet spots like electric trucks (Ford F-150 Lightning and Rivian R1T), electric SUVs/crossovers (Ford Mustang Mach-E, Hyundai IONIQ 5, Volkswagen ID.4), and lower cost options (Chevy Bolt EV starting at $26,500).
Federal incentives, such as the EV tax credit extension from the Inflation Reduction Act, provide up to $7,500 for new buyers and $4,000 for used.
States and several utility companies offer additional incentives, ranging from a few hundred dollars up to several thousand (most are in the $1,500 to $3,000 range).
However, with customers flocking to electric vehicles, several states are becoming overwhelmed, causing them to pause the programs.
States pause incentives as EV demand rises
According to an AP News post this week, New Jersey has become the latest state to temporarily suspend its rebate program after running out of money due to its popularity.
The state’s “Charge Up New Jersey” program gives residents up to $4,000 in incentives to purchase or lease a new electric vehicle.
Charge Up New Jersey stopped accepting new applications for EV rebates on April 17 after dishing out roughly $35 million for the fiscal year that ends in July.
The board said it was pausing the program as it distributed funding based on the current rate of application approvals. According to New Jersey utility board estimates, the $35 million in funding will be used to support the purchase or lease of over 10,000 EVs this fiscal year.
Since launching nearly three years ago, the program has supported the adoption of over 25,000 EVs by providing over $90 million in funding.
New Jersey is among several states offering EV incentives that are seeing overwhelming demand. For example, Oregon is also pausing a popular rebate program due to more buyers going electric than expected.
The Oregon Department of Environmental Quality announced in March it would temporarily suspend its EV incentive program. Oregon’s Clean Vehicle Rebate program started in 2018, providing up to $7,500 for qualified households. DEQ’s senior advisor Rachel Sakata said:
Unfortunately, we’ve become a victim of our own success and we’re running out of money.
Electrek’s Take
Demand for fully electric vehicles is only predicted to continue climbing from here. Analysts are forecasting EV sales will surpass 1 million for the first time in 2023.
With 250,000 electric vehicle sales in Q1, the US is well on its way toward 1 million EV sales this year.
We’ve been saying for a long time that EV adoption will happen quicker than most have predicted. Demand is already taking several states by surprise, causing them to pause incentive programs.
The federal government is aiming for 50% of all new vehicle sales to be electric by 2030, up from around 7% in the first quarter of 2023.
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On today’s informative episode of Quick Charge, we’ve got Honda engineers Jason Hwang and Emilio Sanchez to talk us through some of the things that make the GM Ultium-based Honda Prologue EV feel like a real Honda, and why that matters.
Jason and Emilio talk about some of the choices they made to make the Honda Prologue and Acura ZDX feel different from its GM-branded cousins, and explain why this was much more than a case of badge-engineering. Give it a listen, then let us know what you think of the Prologue and ZDX in the comments.
Today’s episode is sponsored by BLUETTI, a leading provider of portable power stations, solar generators, and energy storage systems. For a limited time, save up to 52% during BLUETTI’s exclusive Black Friday sale, now through November 28, and be sure to use promo code BLUETTI5OFF for 5% off all power stations site wide. Learn more by clicking here.
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The first EV charging hub funded by the Charging and Fueling Infrastructure (CFI) Program in the Eastern US is now online in Deerfield, Massachusetts.
The town installed the region’s first DC fast chargers (four ports), along with four Level 2 chargers, at 59 North Main Street in South Deerfield.
These new charging stations, funded with $2.46 million from the CFI program, are conveniently located near Interstate 91 in Franklin County, the most rural county in Massachusetts, which serves drivers from Connecticut up to the Canadian border.
The hub also features local and regional bus stops and designated bike lanes with secure onsite bike racks. The chargers are meant to cater to everyone: from local residents and visitors to municipal EVs and commercial vehicles that service the region’s businesses, like those in food and beverage manufacturing.
Gabe Klein, executive director of the Joint Office of Energy and Transportation, sees this as a model for future projects:
Multi-modal charging hubs in communities are key to giving more people the choice to ride and drive electric. The Town of Deerfield is showing leadership in building out convenient charging infrastructure that brings new transportation choices to rural and disadvantaged communities while supporting local commerce.
In recent years, Deerfield has experienced increased climate change-driven flooding from nearby rivers, including the Deerfield River, the Connecticut River, and the Bloody Brook. The project incorporates environmental engineering designed to mitigate and adapt to the effects of flooding and climate, including the installation of permeable asphalt and rain gardens, planting of native trees, grasses, and shrubs, and the creation of new greenspace in the center of Deerfield.
The Biden-Harris administration’s CFI Grant Program is expanding EV infrastructure nationwide. It offers grants for projects that complement and expand upon the initiatives of the NEVI program in urban, rural, and disadvantaged and low-income communities. So far, the CFI Grant Program has allocated over $1 billion to nearly 100 projects across the US, encouraging private investments and expanding the EV charging network to make EV ownership more practical and convenient.
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Kia’s upcoming EV4 electric sedan was just spotted testing in the US for the first time. The low-cost EV is expected to make its big debut by the end of the year. Here’s a look at the new model.
The EV4 will round out Kia’s new “EVs for all” master plan launched last year. Kia showcased three new models, the EV3, EV4, and EV5, during its first annual EV Day in October 2023.
During the event, Kia outlined its new global strategy to “lead and accelerate the EV revolution” with a wide range of models priced from $30,000 to $80,000.
Kia plans to rapidly expand its lineup with a series of smaller, lower-priced models. It launched the EV9, its first three-row electric SUV, which is already proving to be a hot seller in the US. Starting at under $55,000, the EV9 is still a great deal compared to others in its class, but Kia plans to go even lower.
The EV3 and EV4 are expected to be among the most affordable electric vehicles when they arrive in the US.
Kia’s new EV4 is now testing in the US
Ahead of its official debut, Kia’s new EV4 sedan was recently caught driving on US streets for the first time.
The latest image from KindelAuto doesn’t reveal much more than what’s been shown in the past, but the fact that it’s now testing in the US is significant.
Kia’s EV3 is already on sale in Korea, starting at around $30,000 (42.08 million won). Earlier this week, the company said its new compact SUV is now available across Europe, starting at around $38,000 (36,000 euros) with a “segment-leading range” of up to 375 miles (WLTP).
Next up will be the EV4. Kia is expected to officially reveal the new EV by the end of the year, with deliveries starting in 2025. It could be as soon as next week at the 2024 LA Auto Show.
The interior will feature Kia’s advanced new ccNC infotainment system with dual 12.3″ navigation and driver display screens. An otherwise minalimalistic design is expected inside.
Kia’s EV4 will also be available in a hatchback variant. Although the hatch is likely aimed at European buyers, it was also recently spotted testing in the US for the first time.
We will learn official prices closer to launch, but the EV4 is expected to start at around $35,000 to $40,000.
Kia is teasing five new vehicles for the US, at least one being a new EV, that will debut at the LA Auto Show next week. Will it be the EV3? EV4?
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