First EV sales decline in a decade; hiccup or lasting trend?

Good morning. It’s Thursday, Feb. 15. Here’s what you need to know to start your day.

• EV sales see first decline in a decade; what’s causing the setback?
• SoCal mudslide and flooding risk worsens as new storms move in
• Jennifer Lopez’s musical movie premieres on Amazon Prime on Friday
• And here’s today’s e-newspaper

First EV sales decline in a decade; hiccup or lasting trend?

California has been at the forefront of a booming electric vehicle market, but recent trends show signs of fatigue. EV sales significantly declined in the latter half of 2023 for the first time in over a decade.

Sales of all-electric cars and light trucks surged at the start of 2023, showing a 48% increase in the first half of the year compared with a year earlier. By that time, California alone contributed over a quarter of the nation’s EV sales — roughly 190,807 units.

In the third quarter, EV sales in California experienced their first quarterly drop since 2012. Additionally, fourth-quarter sales declined by 10.2%, falling from 100,151 to 89,933 units.

Even the popular Tesla is reporting a 10% decline in sales in the final quarter of last year.

Until recently, the sales success of EV automakers, including Tesla, appeared to guarantee consumer acceptance, a key assumption and factor in the state’s long-term zero-emission plan, The Times’ Russ Mitchell reported.

Could potential EV fatigue impede the state’s efforts to achieve its ambitious climate goals, including the plan to ban the sale of new gasoline- and diesel-powered vehicles by 2035?

For now, it appears to be a temporary setback based on current data, but what is driving this potential fatigue?

An arm and a leg for electric

Although the cost of building EVs continues to drop, it has yet to reach price parity with conventional gasoline-powered vehicles. The average retail price for an EV hovered around $52,000, nearly $4,000 more than fossil-fuel counterparts, according to Cox Automotive.

High interest rates have made affordability a struggle for some to switch from gas to electric. The interest rates of EV loans are 0.29% higher than those of non-EV loans, revealing “a systematic gap,” a 2023 study found.

After building more manufacturing capacity than market demand, Tesla slashed prices last year, causing other EV makers to follow suit. However, some automakers maintained high prices and reduced production.

Ford halved planned production instead of suffering significant losses from steep price cuts. Marin Gjaja, head of Ford’s EV arm, recently told stock analysts that Ford will launch the next generation of EVs only “when they can be profitable.”

Americans’ preference for larger vehicles necessitates larger, heavier and costlier battery packs, contributing to the high prices. While lower-priced EV models are due to arrive over the next several years, they’re in short supply right now.

California is facing a potential market saturation

The overall EV market is still far from saturation. In 2023, 15.6 million cars and light trucks sold in the U.S., most gas-powered. Electric vehicles made up 7.6% of those sales.

Yet, California’s EV market share already stands at 20.1%, aiming for a theoretical 100% by 2035.

There is definitely a consumer base of early EV adopters who buy electric vehicles for various reasons: appeal, performance and environmental concerns.

But for most car buyers, EVs remain a tough sell. Experts say EVs need to be cheaper for mass market appeal, and charging presents a challenge.

Public charging stations are few and far between

EV owners’ frustrating search for operational charging stations has sparked outrage as the state government grapples with an unreliable charging infrastructure, The Times reported in January.

California has allocated $1 billion to EV charger companies, with billions more in funding expected. However, despite providing cash grants for charger installation, the California Energy Commission has only recently started collecting reliability statistics.

Academic researchers have found that charging stations have become notoriously unreliable, with at least a 20% malfunction rate.

Even with a reliable charger, there aren’t enough available, forcing many to wait in long lines. The state aimed for 250,000 chargers statewide by 2025, but the Energy Commission reports far fewer publicly accessible chargers — only 93,855.

Today’s top stories

Three homes are in danger of falling into the ocean after a cliffside gave way over the weekend after recent heavy rains in Dana Point.

(Allen J. Schaben/Los Angeles Times)

SoCal weather

• Back-to-back rainstorms have prompted fresh concerns about luxury homes on the edge of a California cliff. See the dramatic drone footage.
• Southern California faces risk of mudslides and flooding as new storms move in.
• Silver lining to winter storm damage in California: You can claim a property tax cut.

Crime and courts

• Behind L.A. County’s less-scrutinized cities and suburbs, a disturbing finding on arrests.
• After a mistrial, an ex-LAPD cop who fatally shot a disabled man in a Corona Costco won’t be retried.
• L.A. nursing homes discriminated against non-Koreans, a federal lawsuit alleges.
• ‘I felt violated’: Beekeeper offers $100,000 reward in brazen Fresno beehive thefts.

More big stories

• They earn nearly $200,000. Can they afford to have kids in SoCal?
• Dozens of packaged foods have been recalled in a listeria outbreak. Here’s what you need to know.
• Is the Mexican government hiding how many people have gone missing?
• What does a service fee ban mean for diners? Expect that $39 chicken to cost $49.
• Charter schools face new restrictions under a sweeping LAUSD policy.
• NBA All-Star weekend: What time is the game? What’s new?
• Firefighters launch a campaign against Measure HLA, saying ‘road diets’ threaten safety.
• New eligibility rules mean nearly 2 million on Medi-Cal can now save for a rainy day.
• Low pay. Fewer leadership roles. Black and Latina child-care workers deal with racial barriers.
• Risk for chronic fatigue soars among those who had COVID-19, a study says.
• Lionel Richie and Diana Ross reteam for L.A.’s inaugural Fool in Love fest coming in August.
  

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Commentary and opinions

• Steve Lopez: Older drivers reveal strategies for passing that ‘ridiculous’ California DMV renewal test.
• Opinion: Before Los Angeles gets a new police chief, here’s what we need to know.
• Opinion: Why do we talk about older people so negatively?
• Editorial: Some schools are overdoing it with frightening active-shooter drills.
• Jackie Calmes: Biden’s polls aren’t great. How much is the media’s fault?
• Opinion: Why that ambulance racing through L.A. traffic may not be going to a life-or-death emergency.
• Editorial: No more last chances. Shut down L.A. County’s juvenile hall shell game now.

Today’s great read

Ben Chida, Gov. Gavin Newsom’s top education advisor, who is a product of Harvard Law and UC Berkeley.

(Irfan Khan/Los Angeles Times)

Newsom’s top education advisor bares his mental health struggle: ‘You’re not alone.’ Ben Chida, chief architect of the state’s education policies, grapples every day with his mental health. Now he wants to send a message of hope to kids like him.

Other great reads

• ‘American Fiction’ star Jeffrey Wright wonders what’s next. The Pacific Ocean, for starters.
• Is it good or bad to compartmentalize your life? The answer may surprise you.
• Will Southern California be the ‘Napa Valley of coffee’?
  

How can we make this newsletter more useful? Send comments to [email protected].

For your downtime

Joey Terrill, “Still-Life with Crixivan,” 1997-1998, a mixed-media painting on canvas, 36 by 48 inches. The piece is on view as part of the artist’s solo show, “Still Here,” at Marc Selwyn Fine Art in Beverly Hills through March 3, 2024.

(Robert Wedemeyer / Marc Selwyn Fine Art)

Going out

• 🎨 Art about AIDS has often depicted grief. L.A. painter Joey Terrill made it about life. See his still life works on view at Marc Selwyn Fine Art in Beverly Hills through early March.
• 🎥 In ‘Bob Marley: One Love,’ — in theaters now — we wait in vain for the essence of the man to materialize.

Staying in

• 🎬 Jennifer Lopez’s musical movie premieres on Amazon Prime on Friday: ‘Everyone thought I was crazy,’ except Ben.
• ✅ Quiz: Will you be voting ‘Oppenheimer’ for best picture?
• 🧑‍🍳 Here’s a recipe for the easiest chocolate cake ever.
• ✏️ Get our free daily crossword puzzle, sudoku, word search and arcade games.

And finally ... from our archives

(Genaro Molina/Los Angeles Times)

On this day 21 years ago, millions of people across more than 600 cities worldwide took to the streets to protest the invasion of Iraq. In an array of peaceful protests from Santa Monica to Hollywood to Orange, thousands of Southern California demonstrators — some of whom had never attended an antiwar rally before — voiced their opposition to a war in Iraq.

Have a great day, from the Essential California team

Anthony De Leon, reporting fellow
Kevinisha Walker, multiplatform editor
Stephanie Chavez, deputy metro editor

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