Electric car sales are growing but remain a small share of total vehicle purchases

Electric vehicle (EV) sales have climbed steadily over the past decade, but the total number of EVs sold each year is still far smaller than gasoline car sales. In the United States, EVs made up roughly 9 to 10 percent of new car sales in 2023, up from about 3 percent in 2020. That growth is real, but it means nine out of every ten new cars sold still run on gasoline or diesel.

The reasons for this gap are straightforward: EVs cost more upfront than comparable gas cars, charging infrastructure is still patchy in many regions, and many buyers worry about battery range and resale value. At the same time, EV prices have fallen as battery manufacturing has scaled up, and more models are available now than five years ago. The sales trend reflects both genuine momentum and genuine hesitation.

Key Takeaways

  • EV sales are growing faster than gas car sales, but EVs still represent a small fraction of total new vehicle purchases in most markets.
  • Battery cost is the single largest factor in EV price; as battery manufacturing has expanded, EV prices have dropped and more affordable models have entered the market.
  • Federal tax credits in the United States and rebates in other countries have shaped which EV models sell best and where buyers choose to purchase.
  • Used EV sales are growing as early EV owners trade in or sell their vehicles, creating a secondary market with lower prices and different concerns than new car sales.
  • Charging availability, electricity costs, and regional incentives vary widely, so the financial case for an EV depends heavily on where you live and how you drive.

Why EV prices have fallen and what still makes them expensive

The cost of an EV battery has dropped by roughly 80 to 90 percent over the past fifteen years, according to industry tracking. That decline is the main reason EV prices have come down. A decade ago, an EV battery could cost $1,000 per kilowatt-hour of storage; today, leading manufacturers report costs closer to $100 to $150 per kilowatt-hour. Cheaper batteries mean cheaper cars.

Even so, most new EVs still cost more than a gas car of similar size. A mid-range EV typically costs $35,000 to $55,000 before any tax credits or rebates. A comparable gas sedan might cost $25,000 to $40,000. The gap exists because EV manufacturing is still less mature than gas car manufacturing, and because EV buyers are paying for battery technology that will eventually outlast the car itself. Over the life of the vehicle, fuel and maintenance savings often close or eliminate that price gap, but the upfront cost remains a barrier for many buyers.

How federal tax credits and state rebates shape which cars sell

In the United States, a federal tax credit of up to $7,500 is available for new EV purchases, though the rules are complex and not all vehicles or buyers may have access to. The credit phases out for vehicles made by manufacturers that have sold more than 200,000 EVs in the U.S., and it includes price caps and domestic content requirements. These rules were written into the Inflation Reduction Act and took effect in 2023.

Because the credit is tied to vehicle price, domestic content, and battery mineral sourcing, it has reshaped which models sell well. Vehicles that meet all the requirements sell faster than those that don't. Some manufacturers have lowered prices to stay under the caps and keep the credit available to buyers. Other states—California, New York, Colorado, and others—offer their own rebates, which stack on top of the federal credit in some cases. A buyer in California might receive a state rebate of $2,000 to $5,000 plus the federal credit, while a buyer in a state with no state program receives only the federal credit, if they may have access to.

The role of charging infrastructure in where EVs sell

EV sales are concentrated in regions with denser charging networks. California, the Northeast, and parts of the Pacific Northwest account for a large share of U.S. EV sales, partly because those regions have invested in public charging stations and partly because they have higher gas prices and stronger environmental policies. Rural areas and regions with sparse charging networks see far fewer EV sales, even when federal credits are available.

Charging speed and availability matter differently depending on how someone drives. A person with a driveway who charges at home overnight can drive an EV with a 200-mile range and rarely need a public charger. Someone without home charging, or someone who drives long distances regularly, needs reliable public charging to make an EV practical. The growth of fast-charging networks along highways has expanded the market for long-distance EV travel, but coverage is still uneven. Tesla's Supercharger network remains the largest and most reliable, though other networks like Electrify America and EVgo are expanding.

Used EV sales and the secondary market

As early EV adopters trade in or sell their vehicles, a used EV market has emerged. Used EVs typically cost 30 to 50 percent less than new ones, making them more accessible to price-sensitive buyers. A used EV with 50,000 to 100,000 miles on it might cost $20,000 to $30,000, compared to $40,000 to $60,000 for a new model.

Used EV buyers face different concerns than new EV buyers. Battery degradation is the main one: EV batteries lose capacity over time, typically losing 2 to 3 percent of capacity per year in the first five to ten years. A used EV with 100,000 miles might have 80 to 90 percent of its original range. Battery replacement is expensive—$5,000 to $15,000 depending on the model—though most EV batteries are warrantied for eight years or 100,000 miles. Used EV prices have stabilized as the market has matured, and certified pre-owned programs from manufacturers now offer battery warranties that extend beyond the original owner.

Regional differences in EV adoption and incentives

EV sales vary dramatically by region because of differences in electricity costs, charging infrastructure, climate, and local incentives. Norway, where electricity is cheap and abundant, has the highest EV adoption rate in the world—over 90 percent of new car sales in 2023 were EVs. In the United States, California leads by a wide margin, with EVs making up roughly 25 percent of new car sales, while many Southern and Midwestern states remain below 5 percent.

Local electricity rates affect the operating cost of an EV. In regions where electricity is cheap, the cost per mile of driving an EV is significantly lower than in regions where electricity is expensive. This difference compounds over the life of the vehicle. A person in a state with cheap electricity might save $10,000 or more in fuel costs over ten years compared to a gas car; a person in a state with expensive electricity might save $3,000 to $5,000. These savings influence whether the upfront price premium makes financial sense.

How manufacturer strategy and model availability affect sales

EV sales are also shaped by which manufacturers are investing in EV production and which models they choose to build. Tesla has dominated the U.S. EV market for years, but traditional automakers—Ford, General Motors, Volkswagen, BMW, and others—have launched EV lines and are ramping up production. Each manufacturer makes different choices about price, range, size, and features, and those choices affect which buyers enter the market.

Truck and SUV EVs have driven recent sales growth because trucks and SUVs are the most popular vehicle categories in the United States. The Ford F-150 Lightning and Chevrolet Silverado EV appeal to buyers who need a truck but want EV benefits. Affordable compact EVs like the Chevrolet Bolt and Nissan Leaf appeal to budget-conscious buyers. Luxury EVs like the Tesla Model S and BMW i7 appeal to high-income buyers. The wider the range of models and prices, the larger the potential market.

Frequently Asked Questions

Why do EV sales numbers vary so much by country?

EV adoption depends on electricity costs, charging infrastructure, fuel prices, and government incentives. Norway has cheap hydroelectric power and strong EV incentives, so EVs dominate. The United States has cheaper gas and less dense charging outside urban areas, so EV adoption is slower. China has invested heavily in charging infrastructure and battery manufacturing, making EVs competitive on price.

Are EV sales expected to keep growing?

Most industry forecasts predict EV sales will continue to grow as battery costs fall, charging networks expand, and more affordable models enter the market. However, the pace of growth depends on gas prices, electricity costs, and government policy. A sharp drop in gas prices or a change in incentive programs could slow growth; cheaper batteries and more models could accelerate it.

What percentage of cars on the road are electric?

In the United States, EVs make up roughly 2 to 3 percent of all cars on the road, even though they represent 9 to 10 percent of new sales. This gap exists because gas cars last 10 to 15 years, so the fleet turns over slowly. It will take many years of high EV sales before EVs become the majority of cars in use.

Do EV sales numbers include plug-in hybrids?

Sales figures vary by source. Some reports count only battery electric vehicles (BEVs), which run entirely on electricity. Others include plug-in hybrids (PHEVs), which have both an electric motor and a gas engine. The two categories have different costs, ranges, and buyer motivations, so it matters which one is being counted.

How do EV sales affect the used car market?

As more EVs are sold, more used EVs enter the market, which lowers prices for used gas cars slightly. However, the effect is small because EVs still represent a small share of total sales. The bigger impact is on dealerships, which must learn to service and sell EVs, and on buyers, who now have more used EV options than they did five years ago.