EV sales: Hyundai overtakes GM, but Tesla's U.S. dominance continues

DETROIT – Legacy automakers continue to promise big increases in production and sales of battery-electric vehicles, but their efforts so far have done little to change the highly watched, emerging market.

Despite notable upticks in sales compared with a year ago, industry leader Tesla remains the top EV seller and has grown its lead over legacy automakers. It is roughly 300,000 units ahead of its closest competitors Hyundai Motor and General Motors through the first half of this year, according to Motor Intelligence. That compares with a roughly 225,000 gap in the first half of 2022.

The auto data firm reports that Tesla, which does not release sales by region, is estimated to have sold 336,892 vehicles to retail and fleet buyers in the U.S. during the first half of the year, a 30% increase from a year earlier.

Meanwhile, Hyundai — including the Kia brand that’s owned by the same parent company — increased its EV sales by roughly 11% during that time to 38,457 units. GM, which was second in EV sales through the first quarter, more than quadrupled electric car and truck sales to 36,322 units through June compared with a year earlier. And Volkswagen more than doubled EV sales to 26,538 units sold through June.

Ford Motor, which was second in EV sales last year behind Tesla, rounded out the top five spots with sales of 25,709 vehicles through June, according to Motor Intelligence. Ford’s EV sales were only up 12% compared with a year earlier, as the automaker took downtime to retool some plants such as a Mexican facility that produces its electric Mustang Mach-E crossover.

“Our EV sales continue to grow. Improved Mustang Mach-E inventory flow began to hit at the end of Q2 following the retooling of our plant earlier this year, which helped Mustang Mach-E sales climb 110% in June,” Andrew Frick, Ford vice president of sales, distribution and trucks, said Thursday in a sales release.

Tesla’s 30% year-over-year sales growth during the first half of the year was fueled by production at a new plant in Texas coming online and ramping up. However, that hasn’t been enough to keep up with the EV market’s overall growth.

Tesla’s market share of U.S. EV sales dropped nearly 10 percentage points from a year ago to represent 60% of electric vehicles domestically sold, according to the data from Motor Intelligence.

Tesla’s decline in market share comes as more competitors enter the field, resulting in overall market growth. EV sales in the U.S. increased roughly 50% through June compared with the first half of 2022.

Legacy automakers, as well as newer companies such as Rivian Automotive, have been attempting to ramp up production of all-electric vehicles but many of their outputs remain small. Aside from the top slots, only five others have between 1% and 4% U.S. market share, according to Motor Intelligence. A host of others are under 1%.

Tesla’s global deliveries were more than 889,000 EVs during the first half of the year, including 466,140 vehicles during the second quarter. Its production is expected to continue to grow, as Tesla is aiming to produce at least 1.8 million electric vehicles in 2023.

CEO Elon Musk has told shareholders that the Texas factory should be the highest-volume production auto plant in the U.S. once it is fully ramped up. Last year, Musk said the Texas plant was aiming to produce half a million vehicles annually by the end of 2023.

Hyundai’s second-place position is especially notable considering that its vehicles don’t qualify for federal EV tax incentives of up to $7,500 unless they’re leased. Those incentives, which are complex, are meant to benefit EVs that are produced in North America. EVs from Hyundai are currently imported from overseas.

The South Korea-based automaker has been leaning into that leasing loophole under the Biden administration’s Inflation Reduction Act. The Hyundai brand has increased leasing of its EVs from roughly 2% to begin this year and has now hit more than 30%, according to Hyundai Motor America CEO Randy Parker.

“It’s not an even playing field, and we’re certainly not happy about it. But those are the deck of cards that have been dealt and we’re trying to play that deck as best as we can,” Parker said Wednesday during a call with reporters.

GM’s EV sales thus far have been disappointing, especially when it comes to new models with the automaker’s “Ultium” battery technologies. The automaker has been criticized for not ramping up production of its newest EVs such as the GMC Hummer and Cadillac Lyriq quickly enough.

The vast majority of GM’s EV sales during the first six months of the year were of its outgoing Chevrolet Bolt models, which will be discontinued later this year.

GM CEO Mary Barra reiterated last week at the Aspen Ideas Festival that the company’s output of newer EVs has been constrained due to domestic production of its batteries that’s taking longer than expected.

Barra has said GM plans to catch Tesla in sales by mid-decade, as the automaker rolls out more mainstream EV launches later this year such as the Chevrolet Silverado, Blazer and Equinox. It’s also launching a new electric delivery van and a $300,000-plus bespoke Cadillac EV called the Celestiq in 2023.

The Detroit automaker has said it plans to produce 150,000 EVs this year for the U.S. market.

— CNBC’s Phil LeBeau and Lora Kolodny contributed to this report.

Disclosure: NBCUniversal News Group, of which CNBC is a part, is the media partner of the Aspen Ideas Festival.

Correction: GM was second in EV sales through the first quarter of this year. A previous version of this article misstated that timeframe