By
Joe Marconi
ICE Vehicles Will Long Dominate Aftermarket
"The media teems with reports of surging Electric Vehicle (EV) sales and how EVs will soon replace Internal Combustion Engine (ICE) Vehicles. However, an examination of EV sales reveals a different picture and underscores the unlikelihood that EVs will displace ICE vehicles in the aftermarket any time soon."
"The U.S. vehicle population has a much larger segment of older cars and light trucks than any other country with a VIO (vehicles in operation) of comparable size. Accordingly, it will take many years (even decades) for EVs to have a significant impact on ICE aftermarket sales in the U.S."
EV Sales in the U.S.
The U.S. pace of new Electric Vehicle sales is lagging behind many other major countries. Sales of all types of EVs in the U.S. topped 780 thousand in 2022, less than 6% of the 13.8 million total new vehicle market, which suffered its weakest performance in over ten years.
After peaking at 361 thousand in 2018, EV sales in the U.S. shifted into reverse, falling to 318 million by 2020. In 2021, EV sales rallied to 546 thousand and reached a record-high level last year.
Differentiating EVs
Not all EVs are the same. The different EV powerplant configurations vary in their potential for disrupting the aftermarket. There are three types of Electric Vehicles: Hybrid Electric Vehicles (HEV), Plug-In Hybrid Electric Vehicles (PHEV), and Battery Electric Vehicles (BEV).
HEVs and PHEVs are dual-powered, using an Internal Combustion Engine and Electric Motor, which work in cooperation. According, HEV and PHEV Electric Vehicles have a large portion of their miles powered by fossil fuel.
Focus on BEVs
In measuring the disruptive impact of Electric Vehicles on the aftermarket, it is best to focus on Battery Electric Vehicles (BEVs), separating them from the other types of Electric Vehicles (HEVs and PHEVs), which significantly rely on gas engines.
Annual BEV Volume
The EV light vehicle market in the U.S. differs from total EV sales when BEVs are separated. From 2018 through 2022, all Electric Vehicles sales topped 2.3 million.
BEVs represented 1.7 million EV sales from 2018 through 2022, just over 76% of the total. Accordingly, BEVs generated only 2.2% of new car and light truck volume in the U.S. during these five years.
BEV Small VIO Impact
Battery Electric Vehicles represent an even smaller portion of cars and light trucks on U.S. roads. Between 2018 and 2021, BEVs climbed from about 0.3% to just over 0.6% of the nation’s VIO.
Record-high BEV sales in 2022 did not push their VIO share past 0.8%, only about one-third of their 2022 new vehicle market share.
Aftermarket Vehicles
Lang Marketing has developed the concept of Aftermarket Vehicles: cars and light trucks at least four years old. These vehicles generate over 95% of total aftermarket product volume, not including Tires and Accessories.
In 2022, BEVs represented less than 0.3% of Aftermarket Vehicles in the U.S. This underscores the significant time lag between the new sales share of EVs and their aftermarket impact.
BEV Aftermarket Impact
So far, Battery Electric Vehicles have replaced only a minuscule number of ICE vehicles at least four years old. Lang Marketing estimates that BEVs eliminated only about 0.3% of ICE aftermarket volume last year.
Aftermarket Sales of BEVs
BEVs do not share many operating components with ICE cars and light trucks. Nevertheless, BEVs still require aftermarket products, primarily Tires, Accessories, Batteries, and Electrical Components.
BEV Impact on Aftermarket by 2030
Lang Marketing estimates that less than 5% of ICE vehicle product volume (not including Tires and certain Accessories) will be eliminated by BEVs during 2030 compared to what it would have been without BEVs on the road.
ICE vehicles will record substantial aftermarket growth between 2022 and 2030. In fact, the annual rate of ICE aftermarket product growth between 2022 and 2030 will greatly outpace the “loss” of ICE volume due to BEVs during these eight years.
Six Major Takeaways
1. New Electric Vehicle sales in the U.S. lag behind EV volume in foreign countries.
2. To accurately measure the aftermarket impact of Electric Vehicles in the U.S., it is necessary to focus on Battery Electric Vehicles (BEV), the only EVs without an Internal Combustion Engine.
3. The impact of EVs on the new car and light truck market in the U.S. is different when BEV vehicles are separated from total Electric Vehicle sales. Over the last five years, BEVs accounted for only 2.2% of the entire new car and light truck volume in the U.S.
4. BEVs climbed from 0.3% of total cars and light trucks on U.S. roads in 2018 to about 0.8% by 2022. So far, Battery Electric Vehicles have replaced only a minuscule share of ICE vehicles at least four years old (Aftermarket Vehicles).
5. Aftermarket Vehicles (cars and light trucks at least four years old) generate over 95% of total aftermarket product volume, other than Tires and Accessories. In 2022, BEVs represented less than 0.3% of Aftermarket Vehicles in the U.S.
6. Lang Marketing estimates that ICE product volume (not including Tires and certain Accessories) will be reduced by less than 5% during 2030 compared to what it would have been without BEVs on the road. The annual rate of ICE vehicle product growth between 2022 and 2030 will greatly outpace the “loss” of ICE volume caused by BEVs during these eight years.
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