The U.S. market for fully electric vehicles has reached record volumes with 208,000 new registrations in 2018, all while loyalty rates of EV buyers continues to grow, according to recent analysis by business intelligence firm IHS Markit.
Last year, EV registrations more than doubled from just over 100,000 in 2017, capping three years of exponential market-share growth. Perhaps not surprisingly, 59% of these vehicles were registered in California and the Section 177 states, which have all adopted the same vehicle emission standards and have therefore been key markets for EVs as new models proliferate, analysts noted. California on its own accounted for nearly 46% (95,000) of new EV registrations in 2018.
Loyalty rates for EVs are also on a growth trajectory with nearly 55% of all new EV owners who returned to market during the fourth quarter of 2018 purchasing or leasing another EV, up from 42% in the prior quarter. The trend continued in January, with nearly 70% of EV owners returning to market for a new EV during that month, analysts said.
"EV loyalty rates have been steadily increasing since their introduction by OEMs. This increase over such a short timeframe demonstrates that a portion of the US market is highly accepting of this new technology and has a growing comfort level with it," said Tom Libby, loyalty principal at IHS Markit. "As more new models enter the market, we anticipate an even further increase in loyalty to these vehicles."
In addition, IHS Markit forecasts a considerable increase in new fully-electric models offered in the US market over the next decade, with over 350,000 new EVs to be sold in the US in 2020, reflecting a 2% share of the total US fleet. In 2025, that figure is expected to rise to over 1.1 million vehicles sold or a 7% share, according to recent IHS Markit powertrain forecasts.
"A rapid increase in EV nameplates is the catalyst behind the projected growth throughout the next decade," said Devin Lindsay, IHS Markit powertrain analyst. "While relatively successful models such as the Tesla Model 3 mature in the market, other traditional automakers will be rolling out not just one EV as we have seen in the past, but multiple models off dedicated EV platforms."