The EV tax credit is over, but we've finally got some data on which models won, and which didn't. Also, some big EV manufacturing p...
The EV tax credit is over, but we've finally got some data on which models won, and which didn't. Also, some big EV manufacturing projects may be dead.
It’s now a post-electric-forward world here in the United States, and that means that a lot of programs and tax incentives for EVs have been straight-up cancelled. That meant a surge of electric buyers while those offers lasted, but unsurprisingly, some brands did much better than others.
Welcome back to Critical Materials, your morning roundup of industry and technology news. Today, we’re talking about some big EV projects slated for loss of funding from the U.S. Department of Energy, but also the winners and losers in terms of EV sales before tax credits officially collapsed. Meanwhile, in China, Polestar has officially closed its last store—what's next for the brand there?
30%: EV Registrations Surge Before IRA Ends
It’s officially over, folks. The IRA tax credit is done and gone for, but before it ended, lots of EV buyers rushed to cash in before the tax credit evaporated entirely.
The tax credits ended in September, but it always takes a few weeks for new car registration data to trickle in. Now, we have a sense of the winners and losers in August. EV registrations were up a whopping 24% that month, but not all models were equally loved, according to reporting from Automotive News.
Mainstream brands won big, while luxury brands were fairly ignored. The Honda Prologue was one of the biggest winners, but on the backs of heavy incentives. Emphasis mine below:
The Honda Prologue was among August’s biggest winners as registrations jumped 81 percent to 9,005 vehicles. The Prologue was the No. 3 most-popular EV for the month after the Tesla Model Y crossover and Model 3 sedan, S&P Global Mobility said.
Registration data serve as a proxy for sales because some EV makers don’t separate U.S. results or report sales by model. Many automakers also don’t report sales monthly.
The Prologue came with incentives of $12,704 per vehicle in August, compared with $5,813 a year earlier, Motor Intelligence said. In contrast, Honda’s gasoline-powered CR-V crossover had $2,016 in August incentives, the data provider said.
The real information here is that buyers are clearly shopping on price. Buyers want a cheap car, and the Prologue has some of the best incentives and deals to get drivers behind the wheel. Likewise, cars like the Hyundai Ioniq 5 also have strong pricing incentives to get buyers in the door. But that's a lot of cash on the hood to get people to buy a Honda EV, for example.
Also up: the Tesla Model Y, Chevrolet's EVs and the Ioniq 5. Down: Cadillac Lyriq didn’t see all that much growth, partially because of the brand’s incentive cut for that model, the Tesla Model 3 (people may just be buying the SUV instead) and the Cybertruck.
I think going forward, the U.S. EV market will likely continue to fall along lines of price. So, cars like the new Chevrolet Bolt, Nissan Leaf or updated Hyundai Ioniq 5 will likely continue to be winners for most consumers—and hopefully more cheap options are on their way.
60%: The Department of Energy Pulls the Plug on Some EV Projects
It’s not been an easy time for any EV manufacturer in the United States.
Since President Trump has taken office, EVs and clean energy have become incredibly politicized. Of course, the Inflation Reduction Act’s promises, including the EV tax credit, may have been the most visible on the chopping block, but there are other changes, too. The Department of Energy isn’t too fond of EV manufacturing or clean energy, and it’s been slashing funding once awarded to big companies to make new stuff. In fact, it’s taken the axe to 233 projects that it’s dubbed part of “the left’s climate agenda.”
That includes big projects and awards for General Motors and Stellantis. A whopping $500 million for GM to convert a manufacturing facility to EV is now gone. Likewise, a $335 million grant for Stellantis to do something similar at its Belvidere, Ill. plant is also gone. The worst part is, that nothing has officially been confirmed, but just ascertained via a list that fell into the hands of journalists, analysts and politicians.
There are two lists, the second of which has the cancellations from Stellantis and GM. From Automotive News:
A day later, the department said in a news release that the DOE terminated 321 financial awards supporting 223 projects totaling $7.56 billion.
“Following a thorough, individualized financial review, DOE determined that these projects did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars,” it said.
Analysts told Automotive News that the Department of Energy did not release the first list of terminated projects. However, the news outlet Latitude Media obtained the list and published it online.
That first list of terminated projects includes investments in hydrogen, industrial decarbonization and transmission and distribution of electricity.
Days later, the second list appeared.
This is not great news, especially for automakers that desperately need the cash to help offset the great losses from EV sales and manufacturing. Unfortunately, it doesn’t seem like the Trump Administration is all that interested in making sure the U.S.’s manufacturing stays globally competitive, instead opting to mire itself in weirdly partisan politics. We're in for a strange couple of years.
90%: Polestar Closes Up Shop in China (Sort Of)
Polestar certainly hasn’t fared all that well in China. That’s interesting, the brand has started to find its roots globally, increasing sales in European and American markets, but it’s been a non-starter in China. Just a few weeks ago, we reported on how it closed all of its stores but one, and had a dismal 69 cars sold in China for the whole first half of the year.
Well, it looks like Polestar is kind of done in China. It’s shifting to an entirely online business model, and it has closed its last store, once located in Shanghai. Oof. From CarNewsChina:
Polestar officially closed its final direct sales store in the Chinese market. The store was located at L+Plaza in Qiantan, Shanghai, according to Auto-home. The company stated that this move is part of a strategic adjustment to its China business model. It emphasized that other operations in the country, as well as customer rights, remain unaffected. Polestar now primarily sells its vehicles through online channels.
Now, Polestar still has more models coming for the rest of the world. The Polestar 5, as well as the Geely-based Polestar 7 are still on the way, even if they won’t make their debut in China. Polestar still exists in China, and is very much a part of China's Geely group—but it looks like the brand is pivoting to focus more on its successes elsewhere across the globe.
100%: Did You Cash In On the EV Tax Credit?
The IRA is over. But the deals are hard to deny; whether you were purchasing new or used, or rolling the $7,500 into a lease, the IRA brought the prices down for a lot of everyday people.
So, did you cash in before the Sept. 30 deadline? Or, was the IRA’s advantage not much of a selling point? Let us know about your car-buying choices this year, or what's on the horizon for you, by dropping a note into the comments.
Contact the author: kevin.williams@insideevs.com
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