As we leave 2022 behind and head into a new year, the Cox Automotive Industry Insights team has rounded up expectations for the U.S. automotive market in 2023.
By nearly all measures, 2022 was a difficult year for both the industry and the consumer, marked by historically low new-vehicle inventories, high prices, and stubborn inflation chipping away at monthly budgets. A relatively strong jobs market was a tailwind, but all the while, a hawkish Federal Reserve pushed rates higher, essentially riding the brakes as the auto industry struggled to gain momentum.
“This past year was challenging not only to forecast but for the industry to manage,” said Cox Automotive Chief Economist Jonathan Smoke. “As we look forward into 2023, we see one set of challenges being replaced by another. We expect the year ahead to be one of transition, as both the consumer and the industry move past the remnants of a global pandemic and set a new course for mid-decade growth.”
Guided by recent research, intelligence capabilities powered by DRiVEQ, first-party data in the automotive ecosystem, and a team of analysts and experts, Cox Automotive posits 10 trends that will shape the auto business in 2023. Two of the trends pertain directly to electric vehicles:
#4: Sales of Electric Vehicles in the U.S. Will Surpass One Million Units for the First Time
The battery-electric vehicle market keeps outpacing the overall market in sales, and a new milestone is on the horizon: One million EVs sold in the U.S. in 2023. With expanded product availability coming and a fresh round of government-backed incentives to motivate buyers, the Cox Automotive team is forecasting good news in the electrified vehicle market.
#10: Federal Incentives Will Encourage More Fleet Buyers to Consider Electrified Solutions
A key element of the Inflation Reduction Act of 2022 was the reshaping of EV tax credits in the U.S. Within the new laws are incentives designed to entice fleet operators to consider electrified vehicles in the coming year. Fleets have historically shown slow adoption of EVs, but recent research indicates 66% of fleet buyers are considering EVs, up from 43% in 2021. New incentives and investments in charging infrastructure will likely amplify the trend.