- Corporate
No, EV sales are not dropping. It’s just that expectations are adjusting to reality
Recent headlines might lead you to believe that the electric vehicle (EV) market is crashing, especially with news like Tesla cutting 10.000 jobs stirring up concerns. However, these developments are more reflective of an industry adjusting to reality than experiencing a downturn. To give you an idea at Voltaage we saw a record year for EV sales both in France and in the US for 2023, up 49% and 40% compared to the same period in 2022.
The truth is that EV sales are not dropping; instead, we are witnessing an alignment of exaggerated expectations to the actual pace that is limited by circumstances and issues with EV that at Voltaage we’ve been working on since the beginning of 2022.
As I have the impression that most media outlets and unfortunately industry leaders are speculating on these issues, I have decided to clear this out and summarize what these are for you:
1 - EV Sales Readiness in Car Dealership Networks
Selling an EV is not like selling a diesel car. One of the hardest challenges in the EV market is ensuring that car dealership networks are fully prepared to handle EV sales.
Most car sellers currently lack the depth of knowledge and skills essential for effectively promoting EVs, including an understanding of the necessary charging infrastructure. This training gap can result in low customer service and ineffective sales approaches that fail to emphasize the unique advantages and practical considerations of owning an EV.
From my own experience, this lack of readiness in sales networks was a compelling factor that drew me into the EV industry years ago. It was fascinating to me to see that despite most sales networks not fully knowing how to sell EVs—or even showing resistance to selling them—the market for these vehicles has continued to grow.
We cannot expect a faster transition without a selling network ready and motivated about electric vehicles. To bridge this gap, it is crucial for automakers to develop comprehensive training programs, adopt sales support systems on a large scale and make sure to incentives EV sales within their network.
These should not only educate dealership staff about EV technology but also equip them with the tools to address common concerns from potential buyers about ownership and encourage them in prioritize EV sales over combustion engines.
2 - The Critical Role of Charging Infrastructure
While much discussion in the EV sector focuses on the number of charging stations, their strategic location is equally, if not more, crucial. The effectiveness of a charging station — in terms of usage rate and profitability — largely depends on its accessibility rather than mere presence.
In many parts of Europe, significant regions lack even a single charging point within 100 kilometers of road, underscoring a clear need for a more thoughtful and distributed placement strategy.
In France, working in collaboration with ADEME, we at Voltaage have begun addressing this issue on a large scale using our data for the regions of Paris and Normandy. Establishing a robust and strategically dispersed network of chargers is essential. Without it, expecting companies and consumers to transition faster to EVs is unrealistic.
Effective urban and rural planning should integrate public charging points that respond to actual needs and not theoretical estimations. This approach ensures that drivers can easily and reliably charge their vehicles as part of their daily routines, thereby enhancing the practicality and appeal of owning an EV.
3 - Understanding the Role of Corporate Fleets in EV Adoption
Corporate fleets are the catalystof the transition to electric vehicles (EVs), because they not only influence new car sales but also significantly impact the second-hand market. In France for example, according to Transport & Environment, companies and government bodies purchase over half of all new vehicles each year.
These vehicles usually enter the second-hand market after about four years, far sooner than the 11 years typical for privately owned vehicles. This cycle helps populate the used car market with more accessible and affordable EV options for the public, democratizing the solution at a faster speed and on a larger scale.
Despite the potential of corporate fleets to drive the transition to EVs, governments have failed almost everywhere to have corporate fleets meet the established fleet “greening” targets. In 2022, a significant portion of large fleet operators did not meet the expected benchmarks, with 66% of companies and even numerous governmental bodies falling short.
This challenge is not solely due to a lack of initiative or commitment but also stems from gaps in the existing legislative framework and the complexities involved in managing such a transition.
Electrifying a fleet is not just about purchasing EVs; it involves setting up the right infrastructure for charging and managing these vehicles efficiently. The shift to electric is a considerable undertaking that requires robust support systems.
At Voltaage, we were one of the first in understanding these challenges back in 2021 and since then we’ve created solutions to help manage the transition and manage the access toowned and public charging infrastructure. However, the scale of the need is vast, and while we strive to support as many fleet operators as possible, the complete transformation of the market will require way larger availabilities of incentives and support to help companies.
Moving Forward with Optimism
Despite these challenges, the future of EVs remains bright. The EV market is not facing a decline but is instead navigating through its growth pains, and will emerge, I think, more aligned with the realistic expectations of consumers, the capabilities of current technology and with more attention on real solutions.
Jobs cuts are never fun, but Tesla’s job cuts and price slashes, much like Ford and GM’s adjustments, signal a recalibration in response to market conditions and consumer readiness, rather than a red flag about the viability of EVs.
Hopefully, this phase will finally put the attention of car makers and governments on what’s actually needed to accelerate this transition and one of the key concept that I’ve been trying to repeat over and over at any presentation I’ve been to: incentives are not a substitute of demand.
If we want to accelerate the transition we need actual demand, and for that both buyers and sellers need the right tools. This is the Voltaage race and the race of many of our competitors, partners and customers.
Francesco Semeraro
CEO & Co-Founder @ Voltaage (Techstars ‘22) | Ex-Accenture, expert in Fleet electrification and EV fleet management.
