After finishing the year strong with the third-highest quarterly sales ever, the U.S. EV market faces an uncertain path in 2020. Automakers seemed to diverge on approaches to emissions regulations and many fear a divided landscape where automakers must comply with different standards in various states. Despite uncertainty, new advertising efforts spearheaded during this year’s Super Bowl indicate that automakers are willing to invest in their EVs and convince consumers that bigger, bolder EVs are more than capable of meeting their transportation needs.
The U.S. EV market faced an uphill climb heading into the final quarter of 2019. EV sales in the second half of 2018 smashed previous thresholds, increasing to a record 126,562 vehicles sold in the final three months of the year. Compared to this market peak, sales for the fourth quarter of 2019 came in 26 percent lower. This rounded out an overall EV market decline of 9 percent compared to 2018. Tough regulatory battles with the federal government and the refusal to extend the federal tax credit for market leaders have led some automakers to turn their focus to international markets. Despite almost flat sales in the United States through most of the year, Tesla set a record for global deliveries in the fourth quarter of 2019 and has seen stock prices surge in 2020.
Although sales were down, the fourth quarter also brought renewed and clarified commitments to EV investment from major automakers. Volkswagen has committed the most to EV investment with more than $90 billion pledged and laid out more detailed plans for $31.8 billion of this investment in November. New companies also cashed in on major investment in 2019 with Rivian ending a banner year on a high note, raising an additional $1.3 billion to top off a total of almost $3 billion for the year.
Electric utilities are doing their part to encourage customers to buy EVs and continue to invest heavily in charging infrastructure. Investment worth more than $86 million was approved in the fourth quarter of 2019, which was down from the $148 million approved in the third quarter of 2019. More than half of the approved investment came from several utilities in California and could support more than 35 DC fast charging and 900 Level 2 charging stations in schools and parks around the state.
Public agencies throughout the country continue to draw on funding available through the VW Settlement to invest in new technologies. Electric school buses saw a boom in investment in the final quarter of 2019 with a 29 percent increase in funding through the settlement compared to the fourth quarter of 2018. While states like Colorado have chosen to invest remaining funds exclusively in EVs, only half of all settlement awards made so far are going to transportation electrification. Out of the $18 million in awards announced in the fourth quarter, only $7 million will go towards EVs and charging infrastructure.
While some states are not taking the opportunity to invest in EVs, new research published in the final months of 2019 shows an increasingly attractive business case for several technologies. A report from the ICF shows that electric trucks are the most promising technology from both a cost and environmental perspective for California to meet their greenhouse gas emissions reduction and climate goals. At Atlas, our own research shows increasing government and electric utility support for the medium- and heavy-duty EV industry. The media is picking up on this as well, and bus and truck fleet electrification led the news cycle in the fourth quarter as investment announcements, research, and funding awards continued to fuel the growth of this sector.
There are many more developments from the final quarter of 2019 to digest, so be sure to join us for our quarterly review webinar on Thursday, February 13th at 2 p.m. EST as we cover our key takeaways from a busy fourth quarter.