If you’ve been thinking about buying an electric vehicle, the only better time to buy one than today is yesterday. EVs have gone full fire sale, with automakers seemingly clearing out excess inventory as quickly as possible ahead of the end of the month when the federal EV tax credit goes away on Sept. 30.
Naturally, this means a bit of pressure for anybody considering a new EV over the next several weeks. And automakers? They’re loving the influx of sales—but this surge may not last.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: GM says those “irrational” EV discounts are coming to an end and Tesla puts the safety driver back behind the Robotaxi’s wheel in Texas. Let’s jump in.
30%: EV Sales Are Booming As The Tax Credit Enters Its Final Weeks
Photo by: Tim Levin/InsideEVs
Twenty-six days. That’s how long you have to pick up that new EV you’ve been thinking about before you’re out of pocket spend is $7,500 heavier (assuming it qualifies for the tax credit, that is). The clock is ticking on how long buyers have to make their purchases, and savvy buyers have been hitting dealer lots for weeks to make sure they get their pick before they run out of time.
The numbers don’t lie either. Business is booming for automakers and EV sales are through the roof. Brands are moving more cars over the last month than they ever have, which is kind of sad that it takes a clearance sale to move BEVs. But, hey, nothing like a bit of FOMO on wheels to get the blood pumping, right?
Automotive News picks out some sales figures to show how August’s sales are being propped up:
General Motors, which typically hasn’t reported monthly results, said August was its best month ever for EV sales with deliveries of more than 21,000 units. Ford Motor Co. said Mustang Mach-E sales during the month surged 35 percent to 7,226 vehicles.
At Hyundai Motor America, Ioniq 5 deliveries vaulted 61 percent to 7,773 vehicles while Ioniq 6 sales bumped up 30 percent to 1,047.
It’s probably fair to assume that EVs are going to have a great third quarter. We won’t know how great until after the tax credit is already gone, of course, but if August’s numbers are any indication of the full quarter, it’s probably fair to assume that automakers (and shareholders) are getting ready to celebrate.
The irony is almost too rich. The tax credit was designed to boost EV adoption, and it did. It was the tax credit’s expiration, though, that was one of the biggest factors in driving up sales. Kind of sad when you think about it, but at least it’s one last big hurrah in what some still might consider to be the early phase of EV adoption in the U.S.
It wouldn’t be a good party without a hangover, though. Come Oct. 1 (or shortly thereafter), a general slowdown of EV sales is expected to begin. Here’s why.
60%: GM Says ‘Irrational’ EV Discounts Are Coming To An End
Photo by: Cadillac
Automakers are already predicting that the shindig is coming to a grinding halt. Automakers with excess inventory are happy to move the cars right now, but Duncan Aldred, President of General Motors North America, warns that once the excess inventory is balanced, it means that any crazy discounts on EVs are doing the way of the dodo (and the EV tax credit too, I guess).
Aldred recently penned an open letter regarding the anticipated drop in demand for EVs over the next several quarters. Its purpose is clear: to reassure investors and the public that GM can continue selling EVs on its own merits, but getting ahead of what the industry likely predicts will be a disastrous next few quarters for EVs.
Let’s recap what Aldred said earlier this week:
We’re expecting strong demand once again in September. The question, of course, is what’s next? There’s no doubt we’ll see lower EV sales next quarter after tax credits end September 30, and it may take several months for the market to normalize. We will almost certainly see a smaller EV market for a while, and we won’t overproduce. Still, we believe GM can continue to grow EV market share.
Our confidence in the future of our EV business starts with our portfolio. Before there was an IRA, the strongest segments were affordable EVs and luxury, and we have those bases covered with our stunning Cadillacs, the Chevrolet Equinox EV, and soon, the new Chevrolet Bolt. And the style, performance, and industry-leading range of our Chevrolet, GMC and GMC HUMMER pickups and SUVs is unmatched.
Meanwhile, we are seeing marginal competitors dramatically scale back their products and plans, which should end much of the overproduction and irrational discounts we’ve seen in the marketplace.
Aldred’s warning is simple: automakers are currently blowing through their surplus inventory ahead of the EV tax credit deadline. Once it’s gone, automakers will be much more careful with making too many cars so they can avoid any “irrational” discounts on their products, where they end up losing money.
This likely means that folks expecting automakers to match the $7,500 IRA tax credit are going to be sorely disappointed come Oct. 1. Rather than persuade consumers to buy up EVs by throwing piles of cash on the hood, GM believes automakers will simply cap their production in a way that better meets market demand.
Aldred also notes that the U.S. can likely expect to see a downturn in EV sales “for a while.” In fact, he predicts that the market won’t normalize for at least several months, meaning that it could be a gnarly few quarters for EV sales across the industry—especially for those brands that exclusively sell EVs, or ones that relied on qualifying for the tax credit to move cars.
90%: Tesla’s Robotaxi Safety Monitor Is Now Sitting In The Driver’s Seat (Literally)
Photo by: Dan Burkland
Tesla’s latest Robotaxi tweak might seem tiny, but it speaks volumes about how the U.S. is getting a bit more cautious when it comes to rolling out (and trusting) autonomous vehicles.
Earlier this week, a Robotaxi rider in Texas noticed that Tesla had moved the safety monitor into the driver’s seat. I know that reads a bit weird, because usually a safety driver is, well, behind the wheel. But when Tesla launched the pilot in Austin, Texas, it actually put its safety monitor in the passenger seat and tasked them with reaching over and grabbing the wheel if the car did something weird, like turning straight into a parked car.
This move is a bit of a double-edged sword for Tesla. On one hand, it’s a step back in the tech (and optics) department. Placing a human behind the wheel suggests Tesla needs a person there out of necessity for either safety or functional capability. On the other hand, it could also be viewed as Tesla doing that out of an abundance of caution and to be consistent across other markets, such as California.
As Electrek points out, the move likely has less to do with public optics and more to do with less flexible autonomy requirements from the Texas government that went into effect this month:
The timing also aligns with the new Texas Senate Bill 2807, which now governs the deployment of automated driving systems in the state, coming into effect on September 1st.
Prior to this law, Texas was relatively permissive regarding autonomous vehicle testing under earlier statutes, such as SB 2205 (2017), which allowed operation without a human driver as long as vehicles complied with traffic laws, had recording devices, and met federal standards.
However, SB 2807 introduces stricter oversight for truly driverless operations, including requirements for safety data reporting, first-responder interaction plans, and potential revocation of authorization if safety standards aren’t met.
Companies must also demonstrate that their systems can achieve a “minimal risk condition” (e.g., safely pulling over) in case of failure and need to qualify as a level 4-5 autonomous driving based on the SAE standard.
The critical thing to call into focus, as Electrek did, is that if Tesla put a driver in the front seat to be compliant with Texas lawmakers, it effectively admits that Tesla will be operating its Robotaxi in a driving mode more akin with SAE Level 2, which is something that Tesla once admitted to the California DMV that its Full Self-Driving Beta feature would always be—maybe FSD (Supervised) or the Robotaxi software is different and this driver placement is coincidental.
Tesla’s Head of Autopilot and AI Software, Ashok Elluswamy, noted earlier this year that Tesla’s software was still “lagging by a couple [of] years” behind Waymo.
It’s worth calling out that Waymo piloted driverless rides in 2017 and ditched the safety driver in most of its vehicles starting in 2020. So either Tesla plans on pressing the gas, or the gradual game of catch-up could mean a slower roll-out than originally anticipated.
100%: Did You Buy A New EV Out Of FOMO? Will You?
Photo by: Patrick George
So, uh, I’ve gotta ask: did you run out and replace your aging car with a new EV ahead of the EV tax credit going away? C’mon, you can tell me. Tons of other folks did it. Heck, I even window shopped quite a bit myself.
There are a ton of sweet options out there today, many of which qualify for the EV tax credit. And to sweeten the deal, those that don’t qualify have some pretty killer lease deals going on right now.
Now is the time to brag. Show off that sweet ride and tell me what you like most about it. I’ll see you in the comments.
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