EV sales rise 63% in the first half of 2022 amid gas inflation

Yahoo Finance's Pras Subramanian and Akiko Fujita discuss the adoption of electric vehicles in the first half of 2022 and what brands are benefiting most.

Video transcript

AKIKO FUJITA: Well, gas prices are continuing to trend lower. The national average here falling below $4 for the first time since March. We're talking about the lowest level we have seen since that month. Now, the question is, what does this all mean for renewables?

Well, drivers are still switching over to EVs in the face of historically high energy costs. Take a look at this new research from Canalys. It shows a 63% bump in EV sales globally in the first half of the year. EV sales in China accounted for more than half the uptick, while the US made up just 6% of that share.

Want to bring in our auto reporter Pras Subramanian, who, of course, is on top of all things EVs for us. Pras, what's interesting about this study is it's not just about where those sales are coming from, it's who's actually selling these cars. And it's not Tesla, right, at the very top.

PRAS SUBRAMANIAN: Especially in China, where they can sell much cheaper, smaller EVs that you can't actually sell here. We're talking about cars that might cost $5,000, right-- very low range, but very economical cars. So China really dominating, like you mentioned there. 26% of all cars in China sold are EVs or plug-in hybrids.

Europe's at 16%, the US lagging behind at 6%, but still kind of above that 5% tipping point that we like to see in terms of adoption. The big question is we had, like-- you mentioned the gas prices, right? As they were peaking, as they were jumping, EV interest was also climbing.

The question is now, as gas prices fall down, demand kind of decreases, are we going to see that EV demand stick around? Or is it going to actually kind of come back down too? I think we're sort of at a point where people actually do want a transition or beyond the price of gas. So I have a feeling that in the US at least, that will continue that trend of EV purchasing.

AKIKO FUJITA: Yeah, we've heard a lot of people asking whether we're at an inflection point. By the way, BYD, 15% of the market share, Tesla 14%. But what's interesting is 47% is other. So we're talking about many other brands, to your point, especially in China.

A big brand here, of course, Rivian reporting today. What did we see in the numbers there? And did we get a little more color on the kind of bump they're likely to expect from the Inflation Reduction Act?

PRAS SUBRAMANIAN: So with regards to earnings, the big thing is going to be that production forecast. Can they maintain that 25,000 vehicle unit-- per year for 2022 that they had mentioned before? As of right now, they made around 4,200 trucks last quarter, 2,500 in Q1. So they got to make 19,000 trucks, ish, in the back half of this year.

That's a tall order for them. We'll see if they can actually say that, hey, we can actually do that. We have a good chance of doing that. Our factory's coming online faster than we thought it would, maybe we can do that. So that's a big question for investors.

From a top line point of view, they're looking at $335 million in revenue on a loss of $1.61. So that's the headline numbers, but it's going to be all about that forecast and about the IRA. You know, I have done some reporting here on what Rivian is doing. They're actually right now sending people these actual binding purchase orders-- if you put it $100--

AKIKO FUJITA: You can lock in the $7,500.

PRAS SUBRAMANIAN: Yes. And the consideration is $100 of your deposit is nonrefundable. That's part-- that's a consideration for you actually signing a binding contract. And they're saying that hopefully this will allow you to preserve that tax credit, because most of these trucks are around $90,000 when they're optioned up. So that's already way beyond the IRA's limit of $80,000 for trucks and SUVs. So we'll see how that works out.

AKIKO FUJITA: They have the supply?

PRAS SUBRAMANIAN: Well, I mean, as of right now, they have 90,000 preorders and they're making, what, 4,000 a quarter? You do the math, right? It's going to be, like, 10 years. I mean, it's going to be a long time.

AKIKO FUJITA: We'll be looking out for your story. Pras Subramanian, thanks so much for that.