A few hiccups have caused some to question whether electric cars are truly taking off. The truth is that they’re still growing, despite what some would have you believe.

In the first quarter of 2024, ev sale surged in places like Brazil and Viet Nam. But even in the United States, where EVs make up a sizable chunk of new light-duty vehicle sales (see the chart below), growth has been more muted.

EVs now account for 7.3% of the vehicles sold in America. That’s a significant increase from the low point of 3% in 2021, but it’s still short of the 10% that some experts expected in 2024.

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Many of the EVs on sale are expensive luxury models, which is one reason why sales have been slow. A lot of people simply don’t have the money to buy a $50,000 Tesla SUV or BMW i8. The problem is that most EVs don’t have enough options at lower price points to capture a larger share of the market.

But there’s no sign that EV demand is cooling off, and it will only get stronger as battery costs come down and more manufacturers offer a wider range of models. That’s why the EV-to-sales ratio is a helpful metric to watch for. It’s similar to the price-to-sales (P/S) valuation, but it takes a company’s debt load into account as well. This makes it more accurate than a P/S measurement alone. It also reflects the fact that EV companies are still valued mostly on their future growth potential.