TRENTON, NJ—By the end of the year, New Jersey Governor Phil Murphy expects 330,000 electric vehicles to be on the Garden State’s roads. Things were going well until this year, and that goal appeared to be attainable. However, this year, sales in the electric vehicle industry have dropped significantly, forcing manufacturers to pull back on their once-ambitious sales goals.
The push towards electric vehicles has encountered significant challenges, with uncertain prospects ahead. Although EV sales continue to increase, the growth rate has slowed considerably compared to the peaks seen in 2022 and early 2023. That slowdown will most likely cause Governor Murphy to miss his 2025 goal unless something changes in the very near future.
Economists believe the slowdown is due to a combination of factors. First, the demand for electric vehicles is not high. Most people who want an EV have bought them and trying to convinces the rest of America that they should buy an EV has proven to be a difficult sale.
Second, the charging station infrastructure doesn’t exist yet to accommodate the large volume growth being mandated by states like California, New Jersey, and the federal government.
Third, concerns about EV range have not been adequately addressed by manufacturers or the government.
Lastly, the economy and inflation are preventing the manufacturers from being able to compete with gas-powered cars, and people have less money to spend due to soaring inflation.
Until 2024, New Jersey is making significant strides in electric vehicle (EV) adoption, closing in on its ambitious goal of having 330,000 plug-in electric vehicles (PEVs) on the roads by the end of 2025, as outlined in the 2020 EV law. According to the latest report from the Department of Environmental Protection, PEV registrations in the state surged to 154,153 by the end of December 2023, a substantial increase from the 91,727 vehicles recorded at the close of 2022.
The current total includes 151,827 light-duty vehicles (LDVs) and 2,327 medium- and heavy-duty vehicles (MHDVs), both segments experiencing the highest year-over-year growth ever noted in the state. Specifically, the LDV-PEV segment saw an impressive 66% growth in registrations, a notable jump from the 42% increase observed in 2022. Throughout 2023, 62,317 LDVs were added, with an almost equal split between the first and second halves of the year. The LDV-PEV numbers have doubled every two years since 2018, positioning New Jersey to potentially meet its 2025 goal of 330,000 vehicles.
Governor Phil Murphy’s initiative, known as Clean Cars 2, aims to ban gas-powered vehicles but faces challenges in achieving its 2025 objectives. However, market trends align with the goals of major automakers like General Motors, Ford, and Volvo, which are committed to full electrification and plan to release numerous EV models over the next few years. In the first half of 2023, 33,000 EVs were sold in New Jersey, nearly matching the 37,000 sold in all of 2022, indicating strong consumer interest and market transformation.
The Charge Up NJ EV Incentive Program, managed by the New Jersey Board of Public Utilities (BPU), has played a crucial role in this progress. Offering cash incentives to new car buyers, the program has put 16,375 new EVs on New Jersey roads in its first three years, accelerating the adoption of electric vehicles.
Despite this success, national trends show a mixed picture. According to Kelley Blue Book, U.S. EV sales in the first quarter of 2024 totaled 268,909, making up 7.3% of total new-vehicle sales. However, this represented a decrease from Q4 2023, with a 15.2% drop quarter-over-quarter, although there was a modest 2.6% year-over-year increase. This slowdown contrasts sharply with the robust growth seen in previous years.
Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive, noted the complexities influencing EV market dynamics, including Tesla’s sales decline. Despite these challenges, some brands have seen significant year-over-year growth, with the industry still poised for expansion due to more products, incentives, inventory, leasing options, and infrastructure developments expected throughout 2024.
The next report on New Jersey’s EV progress is scheduled for release in June 2024. This report will continue to track the state’s advancements towards its electrification goals.