|
Forecast
Period
|
2024-2028
|
|
Market
Size (2022)
|
750
Thousand Units
|
|
CAGR
(2023-2028)
|
18.23%
|
|
Fastest
Growing Segment
|
Passenger
Car
|
|
Largest
Market
|
West
|
United States electric
vehicle market is growing at a robust pace due to various factors. Consumers
are becoming more interested in electric vehicle segments because of the rising
improvement in the infrastructure of electric vehicles in the country and
substantial support from the government in the form of policies and subsidies.
All these reasons are facilitating the automotive manufacturing companies in
the country to push further to capture the electric vehicle space in the United
States.
United States Electric
Vehicle Market Scope
The electric vehicle market
in the United States is divided among various vehicle types, which include
two-wheeler, passenger cars, light commercial vehicles, medium and heavy
commercial vehicles, and off-the-road vehicles. Moreover, electric vehicles are
powered in different ways and not just purely based on batteries. So, based on
the propulsion type, electric vehicles come in three categories, battery
electric vehicles (BEV), plug-in hybrid electric vehicles (PiHEV), and fuel
cell electric vehicles.
Further, these electric
vehicles come with different ranges because their propulsion systems have
distinct powers to generate and have different efficiencies. Therefore, in
terms of range, electric vehicles are divided as follows: 0-50 miles, 51 miles
– 150 miles, 151-200 miles, 201-400 miles, and above 400 miles. The most
important part of electric vehicles is the capacity of batteries that are
installed in them. As the battery capacity powers the whole system in the
vehicle, which includes the torque, range, and features. Based on the battery
capacity, the electric vehicles are segmented as follows: Less than 50KWh,
51KWh-100KWh, 101-200KWh, 201-300KWh, and above 300KWh.
United States Electric
Vehicle Market Overview
Electric vehicles (EVs) have
been around for a considerable amount of time, however, the rate of innovation
and interest in the sector has increased significantly in the past decade.
There is now a significant gap between EVs and their ICE counterparts in terms
of performance. EVs have been found to outperform ICE vehicles in a variety of
transport policy objectives, such as improved energy security, decreased
reliance on oil, improved air quality, and lower greenhouse gas emissions.
The emergence of EVs as the
preferred clean technology for mobility is a significant development. The
economics of EVs have also improved significantly, and advances in battery and
charging technologies are expected to further reduce costs. The potential
impact of the introduction of EVs in the automotive sector in India has been
recognized as a game-changer, as the country seeks to alleviate air pollution
and reduce its dependence on oil imports have strengthened the case for EV
adoption. Rapid urbanization, migration, and economic growth in India have
contributed to the rise of vehicular congestion in large metropolitan areas and
a dramatic deterioration in air quality.
United States Electric
Vehicle Market Drivers
The electric vehicle market
in the United States has grown rapidly in recent years, driven by a combination
of factors, such as supportive government incentives, customers growing
interest in the EV segment of vehicles, improving infrastructure for EVs,
better cost of vehicles due to increased competition in the market and new
technological developments. The government's supportive policies, such as U.S.
Environmental Protection Agency, have recently announced an update in the
vehicle emission regulation for vehicle types keeping because of the long-term
market transformation.
Apart from this, all the
states in the country are now building EV charging infrastructure because the
Infrastructure Investment and Jobs Act (IIJA) has sanctioned a substantial
amount of funding to boost the EV ecosystem in the country. Further, there are
some incentives which are proposed by the Inflation Reduction Act (IRA) to
build new EV manufacturing plants in the country along with battery production.
This has helped various OEMs to produce electric vehicles and their components
domestically instead of importing them. Moreover, the IRA act is also providing
credit incentives of US$ 7500 for taxpayers to buy electric vehicles given they
qualify for some eligibility set by the government.
Technological advances, such
as improved vehicle range and higher battery capacity, are creating a greater
variety of EV models in the market. This also includes the production of
large-size vehicles, such as SUVs and trucks. The heightened concerns among
consumers regarding the environment are continuously helping the adoption of
EVs. Technological development is also increasing the cost competitiveness of conventional
gas vehicles. Thus, these factors are expected to continue boosting the United
States electric vehicle market over the next few years.
United States Electric
Vehicle Market Trends
There is a significant push
to develop charging infrastructure in public places in the United States. Charging
at home is quite prevalent in the country but it has been observed that electric
vehicles witness growth only when there is electric charging infrastructure development
in the public areas. Due to this, several major EV players are focusing on the availability
of charging points in workplaces and public outlets.
The decrease in the cost of
batteries is one of the most noticeable trends in the EV sector. The most
common type of battery is the Lithium-ion battery which is used in everything
ranging from mobile phones to electric vehicles. These batteries have seen a
steep fall in their prices in the last few years and they are still decreasing.
This has resulted in the rapid expansion of electric vehicles in the market. Moreover,
the manufacturers are shifting away from the more expensive battery ingredients,
such as Cobalt, to nickel-heavy batteries as they are cheap, thus, reducing the
cost price of batteries further.
United States Electric
Vehicle Market Challenges
The need for universal
standard charging sockets for DC fast charging is still prevalent in every
country. No matter how long-range batteries the companies make, this is still a
hurdle in the market expansion of EVs. The fear of not finding a suitable
charging spot during the time of emergency is making customers reluctant to buy
electric vehicles. Although OEMs are in favor of not setting up standard
charging sockets early as it will give them some time for research and
developments in this part. However, this is a big problem for customers in the
long term.
The rise in electricity prices
is also a challenge for electric vehicles. Though it is stated that owning an
EV will still be cheaper in the long term as compared to a vehicle powered by
combustion engines, it will not be the case with consumers who do not have
charging access at home or the workplace.
Market Opportunities
The electric vehicle market
in the United States presents several opportunities for growth and innovation
to its stakeholders. The expansion in the EV market has resulted in the
advancements of EV batteries. The rapid development of EVs to compete with
traditional automobiles has reduced the cost of EVs and, thus, created space
for more opportunities linked with EV components. The growth in the United
States EV battery market has led to the creation of many small industries, such
as the mining of minerals, chemical production of phosphorus, electrolytes, and
battery recycling. Therefore, all these areas provide tremendous opportunities
for investors.
Further, while the charging
infrastructure for EVs is still lagging, it is proving ample opportunities in
the development of public EV charging stations and battery-swapping technology
for the OEMs and other independent players in the EV market. Battery swapping
technology is a process in which the dead or dying battery is replaced with a
charged one within a few minutes. This not only reduces the wait time but also
makes long travels easier and more convenient.
Thus, the electric vehicle
market in the United States presents several opportunities for growth and
innovation, and those who can capitalize on these opportunities are likely to gain
huge returns over the forecast period.