EV sales pick up in California. Shares hit 17%. ICE vehicle sales have declined. Electricity sales pick up first after 13 years of decline

The Camry was dethroned as the perennial #1 by the Tesla Model Y and Model 3. And finally there was a slight increase for electric utilities.

By wolf richter For wolf street,

Sales of Battery-Electric Vehicles According to registration data released by the California New Car Dealers Association (CNCDA), electric vehicles (EVs) in California are set to grow 62% to 285,199 vehicles in 2022. And the market share of EVs in total new vehicle sales nearly doubled to 17%:

total vehicle sales In California, ICE vehicles and EVs combined fall 10% to 1.67 million vehicles in 2022. Overall US new vehicle sales down 8%,

Sales of vehicles with internal combustion engines (ICE) in California fell 18% to 1.38 million vehicles, the lowest since 2011, when the auto industry was coming out of the Great Recession that sent GM, Chrysler and many component makers into bankruptcy.

This chart shows sales of EVs (red) and sales of only ICE vehicles (purple). And note that the new federal EV incentives didn’t go into effect in 2022; And that Tesla and GM used up their allotments of previous federal incentives years ago:

In an overall down market – this is going on across the US, although to a lesser extent – ​​EV sales are booming, and ICE vehicle sales are lagging among the many New EV models, and price cuts, by older automakers and startups chasing after Tesla have begun,

And in the highly important (in the US) segment of pickup trucks, two automakers — Ford and Rivian — beat Tesla to market with electric pickup trucks.

everlasting Bestseller Camry to be superseded by EVs in 2022,

Tesla’s Model Y was the #1 bestselling model in California in 2022 (with 87,257 registrations) and the Model 3 was the #2 bestselling model (with 78,934 registrations), both beating out the Toyota RAV4 (59,794 registrations) and the Toyota Camry by a wide margin (55,967 registrations).

Toyota and Honda ruled California. In the 1990s, the Camry and Civic battled over the top two slots.

In 2021, the Camry was still the #1 bestseller (61,599), followed by the Model Y (60,394). The Honda Civic had dropped to #3 (59,818), just ahead of the #4 RAV4 (59,157). The Model 3 was #5 (53,572).

So for the California auto market, it was quite a show in 2022: the year when Toyota and Honda modeled differently, and Ford or GM or whatever, but by EVs, and by a wide margin.

It helps that Tesla is manufactured in California. No other vehicle manufacturer assembles vehicles in the state. In 2010, Toyota and GM abandoned their joint venture at the NUMMI plant in Fremont, and the plant was eventually taken over by Tesla.

Teslas are now also manufactured in Texas, providing additional supply for the US market. This additional supply led to a 44% year-over-year increase in Model Y sales and a 47% year-over-year increase in Model 3 sales in California. But Camry sales have declined by 9 per cent.

The auto industry was still grappling with a supply-side problem in 2022, which was further exacerbated by a shift in demand from trucks and large SUVs to fuel-efficient vehicles and EVs in early 2022 due to increased gas prices.

There is now an ample supply of trucks and SUVs, but fuel-efficient vehicles were in short supply. American brands have largely given up on fuel-efficient sedans, handing that market over to import brands and EVs. There is a waiting list for many of these models. This is the case in most of the US, including California.

EVS: Electric utilities see exit 1Falling demand for 3 years,

Large-scale efforts at efficiency by households, office buildings, and industrial plants, and the relatively low need for air-conditioning in the coastal strip, where most Californians live, have caused electricity sales to decline for 13 years.

According to annual figures provided by the EIA, sales of electricity to end users peaked at 268,000 gigawatt hours in 2008, and then decreased. By 2021, sales were down 8% from the peak, and had fallen below 2001 sales! It’s a dire situation for an industry poised for growth and makes new investment nearly impossible.

Annual data for 2022 is not yet available. But monthly data for November indicated that electricity sales in 2022 rose 2.1% from a year earlier. Assuming that there was a similar increase in December, it showed the first real jump in electricity sales since 2008.

This is the first year we can see the growth in demand for EV shows in the charts:

EV owners who have a charger at home charge their vehicles at night when rates are lower (time-of-day pricing). This creates consumption of electricity at a time when other demand is very low. This allows the power utilities to make some money from their otherwise idle capacity. This demand in the middle of the night does not require additional investment by the utility. This load in the middle of the night may be one of the best things that has ever happened to utilities.

Electric utilities are like any other company: They need growth. But in California, they are trapped by dwindling demand. This makes investing in new infrastructure almost impossible because there is not enough demand. Utilities are designed like landlords: they borrow large amounts cheaply to fund large investments, and then generate a steady stream of revenue from these investments for decades, which justifies issuing bonds. and make investors happy. But when the demand started decreasing year after year, the whole model fell apart.

Demand for EVs is now showing the first signs of reversing the decline. It’s still a small increase, and it’s only the first, but it’s a great moment for the utility industry.

Just as EVs have driven hundreds of billions of dollars invested by automakers in America, and created all kinds of new high-paying jobs, EVs will drive growth for the electric utility industry in California.

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