Tesla's U.S. registrations fell 25% in February, dragging the EV segment into the red

As Tesla goes, so goes the U.S. electric vehicle market.

Tesla's new registrations fell 25 percent in February compared with the year-earlier month, dragging the broader battery-electric segment into the red, S&P Global Mobility said. The EV data doesn't include used vehicles or hybrids.

The last time Tesla's U.S. vehicle registrations suffered a monthly decline was in August 2020 with a 2 percent drop, S&P Global Mobility said. That was also the last time new EV registrations as a whole fell in the U.S., with a 6 percent decline, the data showed.

The February numbers represent a reversal from years of double-digit percentage gains. Analysts have been warning for months that EV growth was cooling as mainstream buyers balked at elevated sticker prices and worried about driving range and charging infrastructure.

Total EV registrations fell 2.8 percent in February to 78,361, according to S&P's data, the most recent available. Electric vehicle share of the U.S. light-vehicle market fell to 6.2 percent from 7 percent in February 2023.

Ed Kim, chief analyst at AutoPacific, said the EV segment is coming down off of a sugar high from early adopters willing to pay premium prices for the new technology in recent years.

"Cost is a massive factor, and there just isn't a lot of choice below $35,000 for consumers at mainstream price points," Kim said. "A lot of the affluent early adopters who wanted an EV now have one."

The news wasn't all bad. February registrations for EVs from Ford, Hyundai, Kia, BMW and Rivian rose sharply compared with the year-earlier month, the data showed.

Also, Tesla's fall came mostly from the Model 3, with a 73 percent drop in February. The sedan lost its $7,500 federal incentive on Jan. 1, and Tesla introduced a freshened version into its California factory in the first quarter, which likely constrained supply, analysts said.

Tesla's most popular vehicle, the Model Y crossover, was down 6.7 percent in February registrations despite aggressive discounts and eligibility for the $7,500 federal tax incentive.

"If you take Tesla out, EVs were up 32 percent," said Tom Libby, associate director of industry analysis at S&P Global Mobility. He said Tesla's Model 3 had a disproportionate effect on the numbers — but EVs are also losing share to gasoline-electric hybrids.

"You have a higher share for hybrid and it's growing faster than EV," Libby said. Hybrids had a 10.8 percent share of the light-vehicle market in February, a gain of 3.4 percentage points year over year. Hybrids offer partial electrification at similar prices to gasoline vehicles, he said.

Kim doesn't see a return to strong EV growth until the products better match consumer preferences and budgets, likely in a couple of years.

"The longer-term solution is automakers developing mainstream-priced EVs that consumers want," Kim said. "That's necessary to get EV adoption rates back on track."

Electric vehicles underperformed the overall light-vehicle market in February, S&P Global Mobility said.

For all vehicles regardless of fuel type, there were 1.28 million new U.S. registrations in February compared to 1.15 million in the year-earlier month, for an 11 percent gain, the data showed.

EV registration data for January and February combined showed a 6 percent volume growth but a decline in market share to 6.8 percent from 7 percent in the year-earlier period, S&P Global Mobility said.

The February slide in EV registrations represents a stark reversal from fierce growth in recent years.

In the 2023 calendar year, EV registrations grew 52 percent year over year to 1.14 million. Growth cooled in the second half of the year, but registrations still rose in December by 23 percent compared to the year-earlier month.

The cooling trend continued into January, with a 15 percent increase in EV registrations compared with the year-earlier month, followed by February's slip into the negative territory.

Over the past two years, EV share of the U.S. light vehicle market rose from 4.1 percent in February 2022 to 7 percent in February 2023 before sliding to 6.2 percent this February, S&P Global Mobility data shows.

Tesla's fall in the U.S. market came after the automaker reported an 8.5 percent decline in global first-quarter deliveries to 386,810. Because Tesla doesn't report sales by region, U.S. registration data serves as a proxy.

Tesla had 36,697 U.S. registrations in February, compared with 49,209 in in the same month last year, for a 25 percent decline, S&P Global Mobility said. The automaker's share of the EV segment fell to 46.8 percent from 61 percent in February 2023, the data showed, as it maintained its No. 1 EV ranking by brand.

Model Y registrations fell 6.7 percent to 28,664, the February data showed. Model 3 registrations fell 73 percent to 4,434. Tesla's mainstream Model 3 and Model Y are the best-selling electric vehicles in the U.S.

Tesla's luxury vehicles had mixed results. The Model S sedan saw a 1.8 percent decline in registrations to 501, while the Model X had a 47 percent increase to 2,537. The Model X qualifies for the federal EV incentive while the Model S does not, according to Tesla.

The automaker's newest vehicle, the Cybertruck pickup that launched in November, had 561 registrations in February. For January and February combined, the Cybertruck had 633 registrations, S&P Global Mobility said.

• Ford took the No. 2 spot for February EV registrations, rising 84 percent to 7,656, the data showed. Mustang Mach E numbers doubled to 3,743. F-150 Lightning registrations rose 49 percent to 2,740, and E-Transit vans more than doubled to 1,173. Ford's share of the EV segment reached 9.8 percent from 5.2 percent in February 2023, the data showed.
• At No. 3, Hyundai's registrations rose 54 percent to 3,822. The Ioniq 5 crossover gained 10 percent in February to 2,178. The Ioniq 6 sedan, which was not on sale in February last year, had 1,081. The Kona crossover added 10 percent to 563, S&P Global Mobility said. Hyundai's share of the EV segment rose to 4.9 percent from 3.1 percent in February 2023.
• Kia was No. 4 among EV brands in February. Its registrations rose 58 percent to 3,722. The EV6 crossover fell 8.1 percent to 1,286. The EV9 crossover, which was not on sale in February last year, had 1,267 registrations, the data showed. The Niro gained 22 percent to 1,169. Kia's share of the EV segment rose to 4.7 percent in February from 2.9 percent a year earlier.
• BMW was No. 5 with a 166 percent increase to 3,559 registrations, S&P Global Mobility said. Its top models were the i4 sedan with a 48 percent increase to 1,584, and the iX crossover with a five-fold rise to 919. BMW's EV segment share rose to 4.5 percent from 1.7 percent in February 2023.
• Rivian held the No. 6 ranking among EV makers in February with 3,251 for a 56 percent increase versus the same month last year. The R1S crossover nearly tripled its numbers to 1,956 while the R1T pickup fell 58 percent to 476, the data showed. EDV vans tripled to 819. Rivian's share of the EV segment rose to 4.1 percent from 2.6 percent in the year-earlier month, S&P Global Mobility said.
• Mercedes-Benz was No. 7 in the EV ranking with a 62 percent rise in registrations to 2,808, the data showed. Its top models were the EQE crossover, which wasn't on sale in February last year, with 1,055 registrations, and the EQS crossover with a 17 percent rise to 689. Mercedes-Benz' share of the EV segment rose to 3.6 percent from 2.1 percent in February last year, S&P Global Mobility said.
• Volkswagen was No. 8. Registrations of its sole EV in the U.S., the ID4 crossover, fell 18 percent to 2,554, the data showed. VW's EV share fell to 3.3 percent from 3.8 percent in February 2023.
• Chevrolet was No. 9 with 2,495 registrations, a 62 percent decline from February of last year. Chevrolet's discontinued Bolt EV fell 66 percent to 2,206 registrations, the data showed. The Blazer EV, which was not on sale in February last year, had 12 registrations. The Equinox EV, also a new model, had six. And the Silverado EV, also a new model, had 271. Chevrolet's battery-electric share fell to 3.2 percent from 8.2 percent in February 2023, S&P Global Mobility said.
• Audi was No. 10 with 2,437 registrations for a 93 percent rise, the data showed. Audi's top EV models were the Q4 e-tron that more than doubled to 1,190 and the Q8 e-tron, a new model, with 634. Audi's share of the EV segment rose to 3.1 percent from 1.6 percent a year earlier, the registration data showed.