US electric vehicle sales are projected to reach a historic high of 9% of all passenger vehicles in 2023, up from 7.3% in 2022, marking the first time over 1 million EVs will be sold in a calendar year. Atlas Public Policy estimates sales to range between 1.3 million and 1.4 million cars. Despite this progress, the US still trails behind leading countries in electric vehicle adoption, including China, Germany, and Norway.
As of the first half of 2023, electric vehicles (EVs) accounted for 33% of sales in China, 35% in Germany, and an impressive 90% in Norway, as reported in the June edition of the BloombergNEF EV Outlook. These percentages encompass both battery electric vehicles and plug-in hybrid EVs.
In these countries, government emissions targets, tax incentives, subsidies, and affordable options drive consumer adoption of plug-in vehicles. In the U.S., declining prices, led by Tesla’s reductions and competitive responses from other automakers, along with increased incentives and deeper dealer discounts due to growing EV supply, have spurred electric vehicle adoption. The Inflation Reduction Act further contributed, reducing EV costs for buyers by $3,750 or $7,500 based on specific criteria.
Electric car battery costs are decreasing as key materials like lithium become more affordable, making electric vehicles (EVs) more cost-effective. Despite the growing market share of EVs in the U.S., challenges persist for potential buyers. Early adopters tended to be higher-income individuals comfortable with new technology and able to charge at home. Addressing disparities in charging infrastructure and upfront costs is crucial for the auto industry to reach a broader range of EV shoppers. Many consumers still face obstacles, with public charging reliability and accessibility, coupled with the higher initial cost, identified as key barriers according to BloombergNEF. Last month, new EVs averaged $3,826 more than the typical new car, with an average price of $51,762 compared to $47,936, as estimated by Kelley Blue Book.
To address infrastructure challenges, major automakers are adopting Tesla’s charging technology, enhancing opportunities for non-Tesla EV drivers. Tesla’s North American Charging Standard will integrate with the industry’s widely used Combined Charging System (CCS), improving charging accessibility. However, these changes are expected to take effect between next year and 2025. Concurrently, concerns about an EV market slowdown are prompting some automakers, like Ford and General Motors, to revise their electrification targets.
