Although U.S. sales declined for most automakers because of weather and parts disruptions, a growing number of electric vehicles reaching dealerships has begun helping the auto industry recover from the coronavirus pandemic.
EV sales rose 34 percent last month, according to Morgan Stanley, while overall sales for the seven automakers that reported February results declined 9.3 percent, according to the Automotive News Research & Data Center. The investment firm noted that battery- electrics accounted for 2.6 percent of the market last month compared with 1.8 percent a year earlier.
The growth is driven by automakers not named Tesla. Morgan Stanley said the Elon Musk-led company’s share of the U.S. electric vehicle market fell 12 percentage points year over year to 69 percent in February, virtually all a result of the ramp-up of Ford Motor Co.’s new electric crossover, the Mustang Mach-E.
Ford said it sold 3,739 of the Mach-E in February, with each one lasting an average of just four days on dealer lots. When combined with a number of hybrids and plug-in hybrids, Ford said last month marked a company record for February electrified-vehicle sales, despite an overall 15 percent monthly sales decline.
The industry’s seasonally adjusted, annualized selling rate for February came in at 15.9 million, according to Motor Intelligence, a healthy number considering the numerous production disruptions the industry has faced.Forecasting firm AutoPacific last week said it expects full-year sales of 15.7 million this year, 7.5 percent more than the 14.6 million vehicles sold in 2020. It projected that the rebound will be driven, in part, by increased EV sales, which it expects to grow by more than 40 percent to 375,000.
February traditionally is a slow month for new-vehicle sales, and automakers last month were further handicapped by two fewer selling days compared with February 2020.
A continuing semiconductor shortage and severe winter weather in Texas also hampered vehicle production and hindered customers in a key market from getting to showrooms.
Automakers also put less cash on the hood of new vehicles last month. According to Motor Intelligence, automakers spent an average of $3,430 per vehicle on incentives in February, 12 percent less than a year ago.
Incentives as a percentage of sticker price averaged 8.2 percent last month, down 2 percentage points from February 2020. It was the seventh consecutive month the figure was below 10 percent.
Transaction prices, however, continued to rise. TrueCar said the industry’s average price rose 6.6 percent last month to $38,075.
“While the ongoing strength of the sales rate is impressive, the transaction prices and profitability of those sales is nothing short of remarkable,” Thomas King, president of the data and analytics division at J.D. Power, said in a statement. “The combination of strong retail sales, higher transaction prices and smaller discounts means that February 2021 likely will be one of the most profitable Februarys ever for both retailers and manufacturers.”
Analysts and automaker officials said last week that it’s likely the industry will close out the first quarter with some momentum as weather warms and the coronavirus vaccine rollout intensifies.
Consumer demand remained strong, with retail sales outperforming the overall industry. Morgan Stanley pegged February’s retail SAAR at 13.2 million, up from 13 million a year earlier.
“We’re likely to see a very strong spring in the vehicle market,” Cox Automotive Chief Economist Jonathan Smoke said last week. “The only limiters to the sale potential are going to be the tight supply and record prices.”
David Phillips contributed to this report.