The Biden administration announced a string of tariffs on China-made goods traded in the United States in 2024 to combat supposed trade malpractices. One of the targeted sectors on which this decision has an impact is electric vehicles (EV). This has meant that U.S.-based automotive companies in the EV space have had a competitive advantage.

EV sales in the United States have hit a new record in third-quarter 2024, driven by great lease plans and financing offers. According to one of the sector’s leading market insights firm, Cox Automotive, automakers sold an estimated 346,309 EVs in the third quarter, a 5% increase from the prior quarter. EV sales during the period accounted for 8.9% of the total auto sales, the highest-ever share on record.

EV leases have also surged with the federal government’s help. Customers who lease an EV are entitled to the full federal EV tax credit, regardless of where the vehicle was built, the cost of the EV, or the income level of the consumer. This means that EV leases account for more of the respective market than other cars. As of July 2024, the automotive industry leasing average was 22.2%, whereas 42.7% of all EVs sold were leased.

While growth has been significant, purchasing an EV still remains expensive as the average transaction price for these vehicles is more than $57,000 compared to the industry average of $48,000. This is one of the chief reasons why a growing number of buyers are opting for the leasing and financing options.

Companies that are likely to make the most of this conducive business environment include Tesla, Inc. TSLA, Ford Motor Company F and General Motors Company GM. Tesla currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While Tesla’s market share has been coming down over some time and remains below 50%, it is still the top-selling EV maker in the U.S. market by some distance. Following Tesla are General Motors, which saw sales jump 60% in the quarter, and Hyundai, with Ford in the fourth place.

While year-over-year growth has slowed, EV sales in the United States continue to march on. This is being fueled in part by incentives and discounts, but as more affordable EVs enter the market and infrastructure improves, we can expect even greater shifts to EVs in the coming years. Also, EV manufacturing in the United States will be a promising space to follow going forward with the government now on a self-proclaimed mission to boost manufacturing.

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