Tesla Model Y and Model 3 tax credit-induced sales boost US to second largest EV market status

The US has taken over Germany for the title of the world's second biggest electric vehicle market in this past quarter, according to Counterpoint Research. Granted, their definition of EVs also counts plug-ins, but those were just a quarter of the total. Moreover, the lion's share went to China given its top 56% market share, so the achievement still stands.

EV sales in America soared the most year-on-year, with a remarkable 79% growth when sized up to the same period in 2022. For comparison, in China those sales rose just 29% year-on-year, so it's the breakneck pace of growth in the US that catapulted it to second place now. This most likely has to do with the new EV tax credit of the US government that kicked in at the beginning of the year.

The federal subsidy is currently pegged at a US$7,500 maximum and, after a brief hiatus of less than two months, the Model 3 RWD again became eligible for the full amount this week. Such base Model 3 and Model Y versions are Tesla's bestsellers, and it is shipping so many that they hold the first place as the world's most popular electric vehicles, followed by BYD's SUV Song. The Song, however, has a plug-in version as well.

BYD is not to be underestimated here, even though its numbers include some plug-ins, as it holds half of the world's top 10 most popular vehicle models in the category, as per Counterpoint's definition.  Surprisingly, sales of gas-powered vehicles remained largely unchanged year-on-year, too, so any EV sales in the US would've come on top of those.

In the end, Counterpoint predicts that the United States will beat Europe in the EV battery race as well, on account of the government's tax credits largesse that will run until 2033:

By the end of 2023, global EV sales are expected to surpass 14.5 million units, according to our forecast. With the implementation of the EV tax credit subsidy in the US, EV sales in the country are projected to significantly increase this year. To meet the eligibility criteria for the tax credit, automotive OEMs are moving to partner with battery suppliers and establish battery manufacturing plants across North America. Consequently, the US is poised to surpass the EU in the race to build EV batteries.

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