The number of battery-powered electric vehicles, including plug-in hybrids, surged in Colorado last year, accounting for more than one in 10 new vehicle registrations, according to a quarterly update from the Colorado Automobile Dealers Association.
The market share of battery-only powered vehicles in Colorado went from 4.8% of all new registrations in 2021 to 8.1% last year, representing 15,818 vehicles. Plug-in hybrids, which contain a smaller battery, rose from 1.7% of registrations to 2.4% of the total, or 4,660 vehicles. The two types of electric vehicles accounted for a record 10.5% of registrations.
“Once we get more supply and more electrified models, they will continue to grow in sales. We are two to three years away from it making 20% instead of 10.5%,” predicted Tim Jackson, president and CEO of CADA.
Hybrids, which are recharged by a gasoline engine and don’t plug-in also saw an increase, going from 5.9% of new vehicle registrations or 7.2%, representing 13,938 vehicles last year.
Jackson said manufacturers introduced several more electric models, including more sports utility vehicles and trucks, which provided consumers with a greater variety of options. Anxiety about the number of miles electric vehicles can travel before needing a recharge also appears to be lessening as battery technology improves. And higher gasoline prices, which spiked after Russia invaded Ukraine, contributed to increased interest in alternatives.
“People were looking for ways to not pay $5 a gallon in gasoline. We saw a lot of that in 2022,” he said.
Colorado ranks fifth in the country for its electric-vehicle sales, Jackson said, and sales would have been even greater had manufacturers been able to keep up with demand. That backlog should sustain electric vehicle registrations this year, along with enhanced federal tax credits of $7,500 on some models under the Inflation Reduction Act. And officials are trying to boost the state tax credit for zero-emission vehicles from $2,000 per vehicle to $5,000.
Supply shortages, especially for chips vital to the manufacturing of modern cars and trucks, reduced the number of vehicles dealers could provide, resulting in a 13.3% reduction in new vehicle registrations last year in Colorado. That was below the 14.8% decline measured nationally.
The most popular brands last year in Colorado were Toyota, Ford, Subaru, Chevrolet, Hyundai, Jeep, Honda and Kia. Honda suffered one of the biggest declines among the major brands at 38.8% or nearly three times the overall percentage decline seen last year in Colorado. The biggest gainers included the Ford Bronco, up 90.8%, and Tesla, up 26%.
Used vehicle registrations fell 4.8% last year, although vehicles aged 7 to 10 years old increased registrations by 5.9%, a sign of buyers trying to find more affordable alternatives. Used cars proved popular with consumers who didn’t want to wait for new cars to arrive, but that caused prices to surge, so much so that some 2- or 3-year-old models were selling for as much as new versions.
But used car prices are now falling rapidly and the window for that rare arbitrage opportunity has closed. Jackson also noted that supply-chain disruptions are easing, allowing dealers to build more inventory on their lots. Some dealers who had nothing available in reserve were holding 30% to 50% of what they had in inventory before the pandemic, he said.
The uncertainty generated by the pandemic as well as restrictions in visiting showrooms triggered a 12.7% drop in new vehicle registrations in 2020 in Colorado. But consumers came back with a vengeance in 2021, pushing registrations up 22.9%.
Looking forward, the report predicts greater supply should allow new vehicle registrations to rise from 194,186 in 2022 to 205,500 in 2023 and then 219,500 in 2024, which would be slightly above the number of registrations seen in 2016. But consumers looking to buy will have to deal with higher interest rates and the possibility of a softer job market.
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