Article Summary

Despite a slowdown in US battery electric vehicle (BEV) sales toward the end of 2024, long-term electric vehicle market trends are optimistic.

­This review is the third installment in a three-part series on cannibalization and conquest rates of incremental models; the initial review focused on incremental gasoline models and the second focused on hybrid gasoline-electric vehicles.

Despite a slowdown in US battery electric vehicle (BEV) sales toward the end of 2024, long-term electric vehicle market trends are optimistic. Sales forecasts project a continued increase in BEV market share as consumer demand and infrastructure evolve.

In October 2024, the battery electric vehicle (BEV) market reached a share of 8.9% of all retail registrations, reflecting a year-over-year increase of just 0.6 percentage points.

However, BEV sales volume through the first 10 months of 2024 grew a significant 12.6% from the previous year, registering 1,023,716 units. If you exclude Tesla, the BEV market saw an impressive 40% rise in sales during that same time period, or 495,725 units.

For this study, we looked at 29 newly released BEV models to assess their ability to conquest new customers into the brand. To qualify, the vehicle must have met certain criteria:

  1. Be on the market in October 2024.
  2. Have at least 15 months of data available (3-month launch period plus 12 months of data).
  3. Minimum of 1,000 return-to-market (RTM) count from launch through October 2024.

Conquest rates and electric vehicle market trends

Generally, BEV models conquest new customers into the brand at a higher rate than the brand average. In this study, more than two-thirds of the BEVs outperformed their respective brands.

Top three performers:

  • Hyundai Ioniq 5: 74.2% were conquests from competitive brands, which is 21.7 percentage points better than the Hyundai brand overall.
  • Cadillac Lyriq: 72.6% were conquests from competitive brands, which is 16.0 percentage points better than the Cadillac brand.
  • GMC Hummer EV (pickup): 71.3% were conquests from competitive brands, which is 16.3 percentage points better than the GMC brand.

Lowest three performers:

  • Toyota BZ4X: 33.5% were conquests from competitive brands, 7 percentage points below Toyota brand.
  • Nissan Ariya: 40.9% were conquests from competitive brands, 0.4 percentage points below Nissan brand.
  • Subaru Solterra: 45.3% were conquests from competitive brands, 2.3 percentage points below Subaru brand.

Also noteworthy is the fact that Ford is attracting new customers at a relatively high rate. The Mustang Mach-E and F-150 Lightning are two of the top three models in conquest rates relative to the brand average. The conquest rates for both Ford EVs were more than 20 percentage points above the Ford brand average. ­

Table 1

BEV KPIs

The Lexus RZ ranked fifth lowest in conquest rates, highlighting a similarity with its counterparts, the Toyota BZ4X and Subaru Solterra models that share a common platform. A deeper dive into electric vehicle-specific metrics revealed that each of these three vehicles exhibited some of the lowest driving ranges within their segments. This is compounded with a charge time of 11 hours to reach full battery capacity using a Level 2 (240V) charger, which is commonly found in residential applications.

Additionally, these three vehicles lagged behind their competitors in performance regarding manufacturer-reported horsepower ratings. Consequently, sales for these vehicles have increasingly depended on their existing customer base.

In contrast, the top-performing models in terms of conquest rates excelled in at least two of the three critical categories: driving ranges exceeding 300 miles, faster charging capabilities, and/or superior performance ratings. These attributes have given the models a competitive edge in the EV market.

Table 2

Lease payments, incentives, and inventory

Incentives have increasingly influenced the adoption of BEVs in the US. They comprise an average 19% of the manufacturer's suggested retail price (MSRP), meaning that one-fifth of the vehicle's cost is offset by these incentives.

The range of incentives varies, with the Mini Cooper BEV offering a modest 4% of MSRP, while the Audi E-Tron GT stands out with a substantial 45% of MSRP incentive. Furthermore, more than half of the 29 vehicles in the study had lower 36-month lease payments than those of their respective segments overall, indicating that leasing a BEV is often more cost-effective than leasing a similar internal combustion engine (ICE) vehicle.

Many mainstream BEV models are listed for sale below MSRP, according to S&P Global Mobility Retail Advertised Inventory data, enhancing their affordability and appeal to consumers.

Table 3

Ongoing development essential for BEV growth

The landscape of BEVs presents challenges and opportunities. Incentives play a crucial role in adoption but their variability underscores the need for strategic pricing and marketing by manufacturers. Leasing options are becoming more favorable, increasing BEV accessibility to a broader audience. Ongoing product development to improve range and charging time is essential for sustaining growth and enhancing BEV appeal.

This blog is the third and final one in a series focusing on cannibalization rates (and their inverse, conquest rates) across the industry. With new products playing a crucial role in a brand’s performance,  these new entries need to attract new customers rather than just “steal“ existing owners.

Whether the incremental product is a gas, hybrid, or BEV entry, it needs to be positioned apart from its internal stablemates on numerous metrics including price, specifications, propulsion system, and more to minimize internal cannibalization and maximize its appeal to competitive owners. This strategy is aligned with key electric vehicle market trends, as new products must meet the evolving demands of consumers.

S&P Global Mobility offers the most comprehensive and accurate industry data to help OEMs navigate these complex strategy decisions. 

Demo our loyalty analytics tool

This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.