U.S. Electric Vehicle Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Passenger Cars, Commercial Vehicles) and Regional Forecast, 2021-2028

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.

LATEST TRENDS

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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.

DRIVING FACTORS

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.

RESTRAINING FACTORS

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.

SEGMENTATION

By Vehicle Type Analysis

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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.

REGIONAL INSIGHTS

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.

KEY INDUSTRY PLAYERS

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.

LIST OF KEY COMPANIES PROFILED:

• Ford Motor Company (Michigan, U.S.)


• BMW Group (Munich, Germany)


• General Motors (Michigan, U.S.)


• Daimler AG (Stuttgart, Germany)


• Audi AG (Ingolstadt, Germany)


• Tesla, Inc. (California, U.S.)


• Nissan Motor Corporation (Yokohoma, Japan)


• Toyota Motor Corporation (Aichi, Japan)


• Volkswagen (Wolfsburg, Germany)


• Chevrolet (Michigan, U.S.)

KEY INDUSTRY DEVELOPMENTS:

• October 2021 – Toyota announced that it will invest USD 3.4 billion in automotive batteries in the U.S. through 2030. Specifically, the investment is for developing and localizing automotive battery production.


• September 2021 – Ford announced its plans to invest USD 11 billion to set up several plants to produce electric car parts. The company is planning to invest in new assembly plants to build all-electric F-series trucks and three battery plants, including factories in Tennessee & Kentucky.

REPORT COVERAGE

An Infographic Representation of U.S. Electric Vehicle Market

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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.

Report Scope & Segmentation