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ICE vehicles will long dominate aftermarket

It will take many years, even decades, for EVs to have a significant impact on ICE aftermarket sales in the U.S

Fort Wayne, Ind.—Despite reports of surging electric vehicle (EV) sales and how EVs will soon replace Internal Combustion Engine (ICE) vehicles, 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,” states Lang Marketing in its latest Aftermarket iReport. “Accordingly, it will take many years, even decades, for EVs to have a significant impact on ICE aftermarket sales in the U.S.” Here are a few takeaways from Lang’s analysis.

EV Sales in the U.S.

The U.S. pace of new EV sales is lagging behind many other major countries. Sales of all types of EVs in the U.S. topped 780,000 in 2022, less than 6% of the 13.8 million total new vehicle market, which suffered its weakest performance in over 10 years.

After peaking at 361,000 in 2018, EV sales in the U.S. shifted into reverse, falling to 318,000 by 2020. In 2021, EV sales rallied to 546,000 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 EVs: 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. Accordingly, HEVs and PHEVs have a large portion of their miles powered by fossil fuel.

Focus on BEVs

In measuring the disruptive impact of EVs on the aftermarket, it is best to focus on BEVs, separating them from the other types of 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 EV 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

BEVs 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, BEVs 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 by 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.

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