The latest new vehicle sales data from California New Car Dealers Association indicates that while still projected to be at the fourth highest level during the past 11 years, new vehicle sales in California are now expected to be just shy of 2 million for the year. Q3 deliveries for battery electric plug-ins (BEVs) continued to be up primarily as a result of Tesla fulfilling reservations for Model 3 made in prior quarters beginning in 2017. Total PEV sales (plug-in hybrids and BEVs) were up due to this factor and the continued shift from standard hybrid to PEV sales. Key findings from the data:
• Light truck market share was 55.5%, up from 51.3% in Q2 2017, as consumers continue to show a preference for this type of vehicle.
• Consumer shifts to light trucks for the US outside California was even more pronounced, accounting for 71.3% of new light vehicle sales in this quarter. The potential for California’s ZEV policies to be replicated beyond its borders remains low as the market segment targeted by most PEV models—cars—continues to contract as a result of consumer preferences. This trend is evident in GM’s recent announcement on the likely closing of three plants producing sedans (including the Volt PHEV) in order to move the company’s focus more to the light trucks/SUVs/crossovers consumers are buying as well as electric vehicles—which produce the credits needed to stay in compliance with both CAFE and ZEV regulations while enabling continued sales of the more profitable light truck models. This action follows on similar but earlier moves by Ford and Fiat Chrysler.
• The trend towards light trucks continues in spite of higher fuel prices. The average California price for regular gas in Q3 2018 was $3.64 a gallon, 19.5% higher than the prior year’s $3.05.