"Market Intelligence for High-Geared Performance"
The U.S. electric vehicle market size was USD 24.03 billion in 2020. The market is projected to grow from USD 28.24 billion in 2021 to USD 137.43 billion in 2028 at a CAGR of 25.4% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with the market in the United States witnessing a negative demand shock amid the pandemic. Based on our analysis, the market exhibited a decline in growth of 8.8% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The U.S. is the third-largest electric vehicle manufacturer. The transition to EVs has maintained its momentum as the country increasingly develops and adopts policies to accelerate growth in EV. Promotion activities and government policies are helping to overcome prevailing consumer barriers related to vehicle range, higher upfront costs, insufficient model availability, and lack of awareness. These factors will influence the U.S. electric vehicle market forecast.
COVID-19 has Accelerated Adoption of Electric Vehicles
The U.S. electric vehicles sales experienced an unprecedented drop during the COVID-19 pandemic. Many automakers who have a presence in the U.S. had anticipated their new product launches in the market had revised their timeline, manufacturing operations, and others. The companies, including Rivian with its model: R1S and R1T, Workhorse (W-15), and Byton (M-Byte and K-Byte), have postponed their launch dates technical operations due to the severe impact of COVID -19 in the region.
Due to COVID-19, overall vehicle sales in the U.S. in 2020 declined by 12%; however, EV sales have been less volatile. The interest in electric cars has seen promising growth due to their active involvement in 2021 model releases. For instance, 2022 General Motor’s hummer EV sold out pre-orders in 10 minutes.
Additionally, Ford also announced that they would boost production of their all-electric F-150 by 50% compared to original plans due to the customer’s early solid interest. Furthermore, to fulfill the consumer demand during the pandemic, Tesla has shifted to an online sales platform and increased their sales in March 2020.
At the end of 2020, electric vehicles sales in some places grew year on year despite the pandemic. The global EV sales increased by 40-45%, and the U.S. sales rose 4% while overall car sales decreased 13-15%. These factors will influence the market growth in the coming years.
Request a Free sample to learn more about this report.
Rapid Development and Uptake of Charging Infrastructure to Drive Market Growth
According to the International Council on Clean Transportation (ICCT), even though charging at home is highly prevalent in the U.S., uptake of EVs is linked to greater availability of workplace and public charging outlets. For instance, of the 200 most populous metropolitan areas, the ten with the highest uptake averaged 935 public chargers per million populations and a 10% electric share. Comparatively, half of the U.S. population lives in a region with just 20% of the public charging availability in those top-ten markets.
Hence, higher investment in public charging is necessary to increase the adoption of electric cars.
Favorable Government Incentives, Subsidies and More Focus on R&D Activities to Drive Market Growth
Many U.S. states offer attractive incentives to consumers to encourage the sales of EVs, such as free parking, zero or low registration fees, toll reduction, and the accessible charging infrastructure of EVs at numerous charging stations.
For instance, California offers discounts on lightweight zero-emission cars and plug-in hybrid electric vehicles (PHEVs). Low-income families are eligible for an additional USD 2,000. Furthermore, Washington and New Jersey are exempt from vehicle sales and usage taxes on electric cars. Similarly, Louisiana and Maryland offer tax credits of up to USD 2,500 and USD 3,000 per vehicle, respectively. These factors will drive the growth of the market.
Stringent Vehicle Emission Norms to Augment Growth
The U.S government has introduced various strict regulations to reduce carbon emissions from the automotive sector. Several states are moving towards implementing zero-emission vehicle (ZEV) regulations to accelerate the uptake of electric cars. In 2020, states with ZEV regulations were responsible for about two-thirds of the overall sales.
Automakers have subsequently increased investment in R&D activities to fulfill the electrification objectives. For instance, General Motors pledged to halt the production of gasoline-powered Sport Utility Vehicles (SUVs), vans, and passenger cars by 2035, promising a future of new electric cars for American Customers and marking a historic turning point for the iconic American carmaker.
Hence, stringent emission norms will fuel the growth of U.S. electric vehicle sales during the forecast period.
Lower Usage of Commercial Charging Stations Could Hamper U.S. EV Market Prospects
DC EV-charging stations deployed as multi-charger stations can deliver significant returns on investments. However, these returns greatly depend on the amount of the EV charging equipment supplies power.
In the U.S., the average utilization rate of conventional fuel stations is about 34%. On the other hand, commercial EV charging stations have an average utilization rate of about 5-10%. For such stations which cost nearly USD 160,000, a 10% utilization rate is not an economically feasible proposition. In addition, vehicles continue to be plugged in idly even after being completely charged, consuming space without creating revenue.
Due to these factors, even a modest daily target of a 20% utilization rate is difficult to accomplish, even in countries such as the U.S. where EV penetration is high. These factors will restrain the growth of the market.
To know how our report can help streamline your business, Speak to Analyst
Passenger Cars to Dominate the Market Owing to Increased Demand and Sales
By vehicle type, the market is segmented into commercial vehicles and passenger cars. In 2020, the passenger cars segment held the largest U.S. electric vehicle market share. Efficient batteries and faster charging have made long-distance travel using electric cars viable in the U.S. Furthermore, a growing number of commercial charging outlets have also led to the increased adoption of electric cars. These factors are fueling the dominance of this segment.
The commercial vehicle segment is also anticipated to exhibit a high CAGR during the forecast period. Several states, such as California, are partly funding deals for fully electric heavy-duty trucks to decrease pollution along congested delivery routes. The U.S. government is also aiming to replace delivery trucks in the federal workforce with electric vehicles. This will fuel major investments in battery production, charging infrastructure, and associated supply chains. Hence, these factors will propel the growth of the segment.
The share of electric vehicle models in new vehicle sales was about 2.4% in the year 2020 in the U.S., an increase from about 2% in 2019. EV model availability in the U.S. in 2020 was similar to 2019. The number of EV models with more than 1,000 sales increased to 31 in 2020 from 29 in 2019.
An increasing number of cities and states announced their vision for electric mobility, adopted zero-emission vehicle and clean car regulations and implemented more robust policies to upsurge infrastructure investment and electric vehicle market growth. In terms of sales share goals, New York City (NYC) has a goal of 25% of new vehicle sales to be electric by 2025, Houston of 30% by 2030, Boston of 23% by 2025, and San Francisco of 50% by 2025 and 100% by 2030.
These cities have developed comprehensive strategies to support the growth of the market. For instance, Boston’s strategy identifies 13 main actions that target infrastructure deployment, carsharing, car dealership engagement, electric ride-hailing, and micro-mobility programs, support for consumers’ charging rights at rental properties, and fleet procurement strategies. Hence, these factors will accelerate the growth of the U.S. electric vehicle sales during the forecast period.
Tesla is the Leading Player in Market Owing to Productive Partnerships and Industry-Leading Products
Tesla is the leading player in the U.S. market owing to successfully providing pure electric automobiles in the early stage of automotive electrification. In 2020, Tesla sold roughly a volume of 499,935 EV units worldwide. Moreover, the company’s Tesla Model 3 was the highest-selling electric car in 2020. Tesla is continuously improving its EVs with technological advancement and increasing its production capacity to cater to the increasing demand across the U.S. These factors are attributed to Tesla’s leading position in the market.
An Infographic Representation of U.S. Electric Vehicle Market
To get information on various segments, share your queries with us
The market research report covers a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. The report covers the U.S. electric vehicle market statistics from 2017 to 2028. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report delivers an in-depth market analysis of several factors that have contributed to its growth over recent years.
Volume (Thousand Units) & Value (USD Billion)
By Vehicle Type
Fortune Business Insights says that the U.S. electric vehicle market size was USD 24.03 billion in 2020 and is projected to reach USD 137.43 billion by 2028.
Registering a CAGR of 25.4%, the U.S. electric vehicle market will exhibit substantial growth in the forecast period (2021-2028).
The passenger car segment held the largest share of the U.S. electric vehicle market in 2020.
There is an increased emphasis on reducing the share of internal combustion engine-based vehicles that provide low fuel economy and produce high emissions. Furthermore, greater awareness among consumers regarding vehicles that utilize alternative fuels will drive the share of electric models in the car market.
Tesla, General Motors, and Toyota Motor Corporation are the major players in the global market.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry