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Electric vehicle (EV) sales have enjoyed several strong quarters, with EVs’ share of new car sales in California surging to 16% in the first quarter of 2022.
Automotive analysts estimate that national EV sales for last quarter were between 150,000 and 200,000, which puts this year on track to comfortably outpace 2021 sales, Nick Jones, energy analyst for BTU Analytics, a FactSet Company, wrote in a recent insight.
While annual EV sales grew steadily from 2011–2018, nationwide sales growth has been particularly strong since 2020. Both absolute sales and market share nearly doubled in 2021, with a five-year CAGR of 31%, according to Jones. This rate of growth has been paralleled by a dramatic build-out of charging infrastructure, increasing the practicality of EVs beyond the hubs of early adoption in California and coastal corridors.
EVs are driven for fewer miles than their ICEV counterparts (8,000 miles per year compared to 11,500 miles per year); however, growing sales signal that gasoline demand could soon decline. In one scenario, the national market share of EVs is modeled to catch up with California’s current share of 16% by 2025 and become the majority of new car sales by 2030, according to Jones.
Jones said that while only a fraction of gasoline demand is displaced, it is enough to offset any growth in demand that otherwise would be expected.
“Dependent on driver behavior, the modeled scenario shows gasoline demand having peaked in 2019 and gradually declining through the 2020s. Based on this model, displaced demand would approach 1 MMb/d by 2030,” Jones wrote.
Investors looking to gain exposure to the clean energy industry should consider the ALPS Clean Energy ETF (ACES), the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN ), the SPDR S&P Kensho Clean Power ETF (CNRG), and the iShares Global Clean Energy ETF (ICLN ).
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