Tesla Motors scored another (albeit small) win in the EV market. The latest data shows that the Model S is the most popular EV/ PHEV (plug-in hybrid electric vehicle) in the U.S. based on volume of new registrations. The U.S. continues to lead in terms of EV volumes, so holding the top spot domestically is certainly a win for Tesla.
Tesla leads in U.S. on volumes
According to IHS, almost 15,000 new EVs/ PHEVs were registered during the first quarter in the U.S. China came in second with almost 13,000 new registrations for electric vehicles or plug-in hybrids. Unfortunately for Tesla, however, the market share of EVs/ PHEVs in the U.S. remains very small at 0.8% of the total auto market.
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Also IHS analysts blame two big factors for the small percentage of EVs/ PHEVs in the U.S.
Norway leads in EV market share
When looking at EV purchases based on market share rather than volumes, Norway is in the lead according to the IHS Automotive Plug-in Electric Vehicle Index. EVs/ PHEVs were a third of all new vehicle registrations in the country during the first quarter. Norway has been a leading market for EV adoption for quite some time, and Tesla has acknowledged it. So this statistic comes as no surprise.
EV purchases in Norway increased 40.5% year over year. (Chart is courtesy IHS.):
There are no import taxes on EVs in Norway, and the government offers other incentives. According to IHS, Volkswagen’s e-Golf was the favorite EV model in Norway during the first quarter.
EV purchases remain skewed toward some states
They note that currently the U.S. is offering a $7,500 federal tax credit for plug-in EVs, which helps encourage consumers to buy one. EVs are more popular in some states though because more incentives are offered at the state level.
For example, California has been and continues to be one of the top states for EVs/ PHEVs because of its Clean Vehicle Rebate Project. Georgia is also a great place to buy one, as it offers a Zero Emission Vehicle Tax credit.
Further, HIS analysts say tumbling fuel prices are having a negative impact on purchases of EVs.
Tesla must fix China sales
In China, it’s a similar story as the government there also offers incentives for electric vehicle purchases. Tesla would do well to fix its sales problem there, as IHS found an almost 750% year over year increase in EV/ PHEV volumes in the first quarter.
The vehicles also remain a small percentage in China, however, coming in at 0.3%. IHS analysts suggest that more government incentives are necessary to speed up adoption of EVs. Unsurprisingly, the most popular plug-in in China is domestic automaker BYD’s Qin PHEV.
Other market opportunities for Tesla
The U.K. also presents a significant opportunity for Tesla and other EV manufacturers, as IHS found a 392% year over year growth for plug-ins.
They also compared countries that offer government incentives for EV purchases with those that don’t. For example, Germany doesn’t offer as many incentives for consumers to purchase EVs or PHEVs. The market does still presents a solid opportunity for EV and plug-in makers, as the number of plug-in registrations grew 98% year over year. It should be noted though that the percentage increase came off a small base.
Popular EVs in Germany include domestic automaker Volkswagen’s Golf GTW PHEV and Audi’s A3 PHEV. Also the country is considering offering government incentives for EV purchases, which could boost the market opportunity there even further. France does offer incentives, however, and the growth percentage there was similar to that in Germany.
In other words, perhaps government incentives aren’t the main thing driving EV purchases. However, Japan suggests that they are still a key factor even if they aren’t the main thing. The country was the only one where the percentage of EV/ PHEV registrations declined year over year. IHS analysts attribute this to the ending of some incentives and the fact that Japanese consumers appear to prefer hybrids like the Toyota Prius rather than plug-in vehicles.
As of this writing, shares of Tesla Motors were down 3.25% at $270.64 per share, likely because of a downgrade from Barclays.