Report: Zero Emission Vehicle Sales and Production are on the Decline

Published On: June 26, 2024

The slowdown in sales and production of zero-emission vehicles (ZEVs) is undoubtedly concerning, particularly for those who have championed electric vehicles as a key solution to combat climate change.

One of the primary reasons for the recent decline in ZEV sales is the decrease in consumer interest.

According to the AAA survey, consumer interest in electric vehicles has dropped from 23% in 2023 to 18% this year.  What is particularly alarming is that according to a McKinsey and Co. study, 44% of electric vehicle owners plan to replace their current ZEV with a gasoline or diesel vehicle.  This decline in interest can be attributed to a range of factors, including concerns about charging infrastructure.  This emphasizes the need for policymakers and industry stakeholders to address these concerns and invest in expanding and improving charging networks.  However, considering the state’s existing deficit, it is unlikely that significant resources will be allocated to address the lack of charging stations.

Another factor contributing to the decline in ZEV sales is automakers’ reduced EV production. Tesla, the largest ZEV manufacturer, has experienced a quarter-over-quarter decrease in production. This may be due in part to the economic challenges caused by the COVID-19 pandemic and the limited availability of crucial components like batteries.

The trend, however, is not limited to Tesla, as headlines for the past several months have chronicled the downfall of some of Tesla’s competitors like the bankruptcy at Fisker “amid heavy losses and struggling EV market” (Los Angeles Times, 6/19/24), or how “soaring PG&E rates are impacting California’s electric car owners” (San Francisco Chronicle, 3/11/24), or the jobs lost, “latest victim of green-vehicle slump” (Los Angeles Daily News, 3/1/24; San Francisco Chronicle, 2/28/24).

If California wants to achieve its ZEV goals, it must work to change this trend.

Jesus Arredondo and Matt Ross are Energy Industry Analysts and former State of California officials. They can be reached at info at govreport.net