Car dealers, politicians and skeptics like to say that consumers don’t want electric vehicles. But that’s hard to square with the fact that the Tesla Model Y was, in 2023 at least, the best-selling car in the world, while the Model 3 routinely trounces its gas-powered competition in sales.
They’ve all just missed the point of why those things were successful. People want EVs; they just won’t buy uncompetitive models. And the American market is full of those right now.
Some recent Cox Automotive data covered by The Street caught my eye: the U.S. market had 90 EV models available in the third quarter. In theory, that’s great for consumer choices and competition. But in reality, only 10 nameplates sold more than 10,000 units. For reference, the best-selling vehicle in the country, the Ford F-Series, sold 207,732 units over that time period, so we’re talking about a still-small pool of buyers. Many mainstream gas crossovers easily sell more than 10,000 units per quarter.
2025 Hyundai Ioniq 5 XRT
Photo by: Patrick George
But the fact that EV sales are so heavily concentrated among a few models, even when nearly all carmakers have expanded their lineups, speaks volumes about the strength of those overall products. And perhaps it proves that automakers would have been better served by focusing on the strength of core models, rather than aiming to replace their whole lineups with EV options.
Take Mercedes. The company spread its bets, creating EQ equivalents to all of its major gas car lines. It launched the EQC in Europe, then the EQE and EQS in the U.S., both with sedan and SUV variants. By the time the EQE sedan launched, it was already clear that the EQS was a flop: The EQ cars didn’t ride as well as their gas-powered counterparts, often cost more and offered odd, shapeless designs.
2025 Mercedes-Benz EQS 450
Photo by: Patrick George
Plus, there just wasn’t enough demand for electric luxury sedans at current prices, which begs the question: If Mercedes had instead focused on scaling one, future-defining model, rather than a slate of good-enough entrants, would it have broken through?
I’m picking on Mercedes. But I’d say the same is true for others. Can the average person name Audi’s current electric offerings without a Google search? Because while the company has long offered electric options, it has so far failed to capture much attention with buyers. I can’t blame them: The Q4 E-Tron is a gussied-up ID.4, with that vehicle’s many shortcomings.
The Audi Q4 is fine, but it’s another anonymous design with a cut-rate interior. If you want to get customers excited for the future, that’s not a winning formula. Photo by: Audi
The Q6 E-Tron sounds lovely, and has received good reviews (including from here). And two months ago, it was, by some metrics, the fastest-selling EV in America.
But it is awkwardly superior to the Q8 E-Tron, which is doomed. Then there’s the E-Tron GT, an Audi version of the Porsche Taycan, for the few monied buyers who want such a product. None of these are bad products, but none of them are compelling enough to break through, to serve as the brand’s electric halo.
‘Good Enough’ Isn’t Good Enough
I’m picking on Audi and Mercedes here, but the truth is that every automaker faces a similar paradox. They can’t make great EVs without economies of scale, but you’re not going to build those economies of scale without making great EVs.
It’s certainly true that not every car that runs on gasoline is a prize-winner. (None of us are really sure how or why Infiniti exists anymore, for example.) But the gas car market can support 12 compact crossovers without being oversaturated. For now, as it continues to be a new thing, the EV market can’t. Take the Mercedes approach, and you’re massively oversaturating the 10% of buyers who want an EV with too many options.
What, then, do you do?
Option one is to play the spread, launching as many EVs as possible, in the hopes that you will learn and the market will grow. That’s what the Germans, General Motors and Volvo did.
2023 Ford Mustang Mach-E GT
Photo by: Patrick George
Option two is to focus on scaling one or two models that you know are winners; That’s what Hyundai did with the Ioniq 5 and Ford did with the Mustang Mach-E, both of which are now consistent top-sellers.
Option three is to bravely not try at all, which is what Honda, Stellantis and Toyota have all been doing to date (although the latter seems like it’s finally picking up speed here).
Of those, I think two is the clear winner. The Mach-E is not a world-beating product, but Ford just kept working at it, kept advertising it, kept improving it, and keeps the price exactly where it needs to be. It may be older, but it is extremely competitive. Focus helps here.
The Hyundai Ioniq 5 was the company’s flagship EV for years, benefitting from lots of small improvements, new variants like the XRT and aggressive incentive offers. As a result, Hyundai is now one of the most popular EV brands.
Photo by: Mack Hogan/InsideEVs
Option three is, to me, treacherous, as you can’t build great EVs tomorrow if you don’t try to build good ones today. Option one seems the least risky, but leaves you with a lot of weird, orphaned models that consumers may not want.
In a world where EVs cost more than gas cars, being “good enough” is not going to close the deal. Buyers are naturally going to want the cheaper, more familiar option. The only way to overcome that is by making and selling something so compelling and so good that you’d never consider a gas car instead.
Building even one EV that good is a challenge. Doing it in some segments is impossible. But if you focus on dominance in one sector rather than good-enough in three, a brand can establish a foothold in the future. That’s option three. Hyundai did this with the Ioniq 5. Ford did it with the Mustang Mach-E.
Tesla did it with the Model S, then the Model 3, mapping out a playbook that Rivian followed with the R1, and still-to-come R2. We’ve certainly argued that Tesla has expanded its lineup too slowly, and perhaps, given its early EV lead, it’s the only one that can be guilty of this. But you can’t expand the model line until you have scaled up your manufacturing, and learned the hard lessons that come with launching a true mass-market product.
The formula is simple: Focus relentlessly on the segments where you can win. Otherwise, get used to losing.
Contact the author: Mack.Hogan@insideevs.com.
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