Volkswagen of America posted higher first-quarter U.S. sales on surging demand for the SUVs built at the automaker's Chattanooga plant, including the all-electric ID.4, the company reported.
Sales of the battery-powered vehicle rose dramatically in the quarter compared to the same period last year, five times the 48% increase of all EVs, figures show.
Tom Taylor, a policy analyst for Washington, D.C.-based Atlas Public Policy who studies electric vehicles, said in a phone interview that the uptake of EVs continues to grow nationally.
"The U.S. is past the tipping point for the adoption for EVs," he said. "It's a really massive jump from where the market was a few years ago."
Sales in the quarter of the conventionally powered VW Atlas SUV jumped 25%, while the Atlas Cross Sport rose 21.9%, according to the automaker. Both also are assembled in the Chattanooga plant that employs over 4,700 workers.
Volkswagen of America reported that overall sales rose 4.4% in the quarter to 67,853 vehicles. That's less than the 7.5% sales increase recorded across the industry, according to the Associated Press.
EV sales nationally hit just over 258,000 and accounted for 7.2% of U.S. new vehicle sales in the quarter, the AP reported. In 2022, the EV share of the market was 5.8%.
First-quarter sales in the U.S. of the ID.4, which is made in Europe and in VW's Chattanooga plant, grew to 9,758 from 2,755 a year ago, according to the German carmaker.
Taylor said he sees continuing consumer demand for EVs.
"I don't see any signs of that slowing," he said. "When you look at sales data, the line continues to kick up."
Taylor said additional "affordable" EV models are coming to the market.
In Chattanooga, VW in mid-2022 launched production of its ID.4, and the company has said it plans to assemble about 90,000 of the EVs in 2023 in the plant alongside the Atlas vehicles.
Reuters has reported that Volkswagen is looking at expanding the Chattanooga factory to produce the electric ID.Buzz, the successor to the iconic Microbus van.
In March, Volkswagen unveiled plans to build a $2 billion factory in South Carolina capable of producing 200,000 electric vehicles per year under the new Scout brand. VW picked a 1,600-acre site just north of Columbia to build the new plant, which is to ultimately employ 4,000 workers.
Automakers overall sold 3.59 million vehicles in the U.S. during the first three months of the year, compared with 3.34 million a year earlier.
According to Cox Automotive, a key driver of the increased sales is the vastly improved new-vehicle inventory level, which is up roughly 70% from the volume recorded in the early months of 2022. Sales in the quarter were also helped by a notable increase in fleet activity.
"The stronger start to 2023 has led us to make positive revisions to our vehicle sales forecasts, but we continue to believe supply constraints and affordability issues will put a ceiling on what's possible in the year ahead," Cox Automotive Chief Economist Jonathan Smoke said in a statement. "With the job market still strong, the largest demand problem for automotive in 2023 will be rising interest rates that push many would-be buyers out of the market."
1st quarter U.S. sales versus a year ago
* Kia - up 21.8%
* General Motors - up 17.6%
* Nissan - up 17.3%
* Hyundai - up 15.5%
* Honda - up 11.7%
* Ford - up 10.1%
* Volkswagen of America - up 4.4%
* Toyota - down 8.8%
* Stellantis - down 9.1%
Source: Associated Press
The Associated Press contributed to this story.
Contact Mike Pare at firstname.lastname@example.org or 423-757-6318.