John Eichberger |
January 2024
With 2024 well underway, I thought it would be appropriate to take a quick look at 2023 vehicle sales to level set where the market stood at the end of the year. I will keep some of my commentary to a minimum and try to present data – of course, I cannot keep all of my comments out of this so I will interject when I think necessary.
Total Vehicles Sold
After eclipsing 17 million units sold in each of the five years preceding COVID, sales in the light duty vehicle (LDV) market slowed considerably. The effect of COVID was exacerbated by supply chain challenges in subsequent years. In 2023, the market grew by 12.5% over 2022 and came close to sales levels recorded in 2013 at 15.6 million units sold. Meanwhile, the price of new vehicles sold came down slightly (2.4%) from December 2022 to 2023, but still came in very close to $50,000. By comparison, the average U.S. household income in 2022 was $74,580 per the U.S. Census Bureau.
Sales of LDVs by Group
Consistent with prior years, Americans continue to prefer their larger vehicles. Cross-over utility vehicles remain the dominant vehicle type with 47.5% share of the market. But when combined with pickup trucks and sport utility vehicles, these larger format vehicles overwhelmingly dominate the market with 74.7% of all LDVs sold in 2023.
Sales of LDVs by Powertrain
The dominant powertrain sold in 2023 remained the internal combustion engine (ICE), although market share has decline significantly, down 14% since its peak in 2016. When looking at the market as a whole (e.g., on a 0% – 100% axis), it can be difficult to discern what has specifically taken share away from the ICE. But when you zoom into the data, you can see that a combination of hybrid electric vehicles (HEV) and battery electric vehicles (BEV) have capture 14.9% share of LDV sales.
ICE Vehicle Sales
The largest share of the LDV markets remains the internal combustion engine vehicle. With 289 unique models recording a sale in 2023, this vehicle type boasts the broadest selection of options from which consumers may choose. It also appears to be the most competitive, with 40 models recording more than 100,000 units sold and the top three models (F150, Silverado and Ram) accounting for 12.2% of sales.
Hybrid Electric Vehicles
The hybrid electric vehicle market has grown significantly in recent years, increasing its market share from less than 2% in 2018 to 7.6% in 2023. Last year, there were 35 HEV models sold in the U.S. in a fairly competitive manner. There were 14 models that recorded at least 30,000 units sold and the top three models (CR-V, RAV4 and Accord) accounting for 38.7% of sales.
Battery Electric Vehicles
There is no vehicle type that gets the attention afforded to battery electric vehicles. Every day there is a new story about sales, manufacture, battery technology, policy initiative, etc. This has led to some misperceptions. In a survey conducted in September 2022, Americans believed that 20% of vehicles in operation and 24% of those sold the prior September were electric vehicles. This is far from reality, although growth in this sector has been very strong. As the first chart shows, market share has jumped from 1.6% in 2020 to 7.2% in 2023. Yet as the second chart shows, sales growth recently has slowed.
When we look more closely at 2023 sales data, there are a variety of key observations. EVs nearly doubled the number of HEV models sold, with 61 unique models recording a sale. However, sales were much more concentrated. Only six models recorded sales in excess of 30,000 units and the top two models accounted for 52.1% of all BEV sales.
Conclusion
This subhead is a misnomer, because I endeavor to offer no conclusions based upon the data presented here, just a reminder. Data is very important to understanding how the market will evolve. Headlines, announcements, political speeches are very entertaining, but to best understand what is actually happening we must look at the data and assess in the most meaningful way possible.
I will leave you with one more graphic to provide additional insights as you evaluate the data – according to Oak Ridge National Laboratory, 50% of light duty vehicles sold today will remain in operation in 16 years and some will remain on the road for much longer. This affects the rate at which the vehicle market may transition to look different than it does today. Keep that in mind when digesting the news.
