Growth of EV Sales in the US

Overview:

Electronic Vehicle (EV) sales have surged, with growth in all three top auto markets: The US, Europe and China. Regardless of components insufficiency, pandemic-forced manufacturing disturbances, and longer-term fragility of the universal market, sales expanded by 160% in the first half of 2021 from a year earlier, to 2.6mn units, representing 26% of new sales in the global automobile market. However, EVs are expected to make up 20-30% of sales in the United States, European Union and China by 2025.

EV gaining traction in the US:

EV sales in the US have grown from a few thousand vehicles in 2010 to more than 315,000 vehicles annually from 2018 to 2020. States with zero-emission vehicle (ZEV) regulations were responsible for about two-thirds of 2020 US EV sales and less than one-third of overall light-duty vehicle sales. Although the US has third-largest EV market, but compared to China and Europe, the US EV market lags behind with only 250,000 EVs sold in the first half of 2021. However, the uptake in electric vehicles is taking place faster than previously thought, driven by government decarbonization policies of limiting global warming to 1.5 degrees (2.7 degrees F), falling battery prices and a growing number of models offered by automakers. A study shows that the states and cities in US with the most pronounced EV market success remain to have the most prominent policy supports. This growth in EV sales is also linked to enabling infrastructure like public and workplace charging stations for people without off-street parking and for longer trips.

New York and California signed on to the ZEV pledge, though the United States did not. A new report from global consulting firm Arcadis concludes New York and California are rival leading nations but given their physical and economic size, both states could capture greater market share. New York will need to focus on transitioning fleet vehicles to achieve its EV goals, while California could boost EV market share by building out charging infrastructure, the report said.

Top players in the US EV market:

#1 Tesla – Tesla leads the global electric car sales with Model 3 being the bestseller in the world and Model S as the longest-range electric car.  It sold close to 421,000 units in the first half of FY21, which translates into a market share of about 15%. Headquartered in Texas, the company is led by billionaire entrepreneur Elon Musk. In 2008, the company launched Tesla Roadster which was the first ever accessible EV passenger vehicle. Currently, it has four models in its portfolio: Model X, Model S, Model 3, Model Y. Tesla’s share price is presently trading at US$ 1,064.40. From 2020 to 2021, the stock price had increased by 44% on the NASDAQ.

#2 General Motors – Seeking to be at par with Tesla, General Motors (GM) headquartered at Michigan, is another US company investing billions to shift its entire new fleet to EVs as a part of a broader plan to become carbon neutral. After the automaker remarked that it wants to end production of its all diesel and gasoline powered cars, trucks and SUVs by 2035, it revealed plans to increase spending to US $35.0bn through 2025, a 30% increase from plans announced in 2020. GM plans to sell more than 1mn EVs annually by 2025. Its stock is currently trading at US$ 61.46, up 42% against US$ 40 in 2020.

Government initiatives:

The While House has declared headway on the Administration’s target to stimulate and deploy electric vehicles and charging stations, create well-paying union jobs, and set up a clean transportation future. This includes actions by federal agencies:

• President Joe Biden has set a goal for half of new passenger vehicle sales in the United States to be electric vehicles by 2030.
• The Department of Transportation provided enlightenment on how funds can be used to install charging infrastructure and newly designated alternative fuel corridors.
• The Department of Energy declared new grants and partnerships for charger-related research and development.
• The General Services Administration announced progress on the goal to transform the federal fleet to ZEVs.
• Biden’s American Jobs Plan includes a $15bn investment to fund a vision of building a network of 500,000 robust, convenient and affordable public charging stations that will increase drivers’ confidence that they will always have charging options when they need, although most vehicle drivers will charge at home or work.
• The American Jobs Plan also includes creating good-paying union jobs with safe working conditions in America along with promoting strong labour training and installation standards.

American Automakers have signalled that they are committed to transportation electrification and revolutionise the auto industry. At ‘Untapped Markets’, we believe that although sales are going in the right direction, extra measures are needed to completely capitalize on current drive and boost EV adoption into the mounting growth rate needed to acquire the peak point where change is irreversible. Investments in infrastructure and research & development, strong policy support at national and municipal levels, and coordinated global action taken today will determine if EVs can reach their full potential in the next decade.