When will EVs become mainstream in the US? | Automotive Industry

Robert Blake, a tribal citizen of Red Lake Nation in Minnesota, watched for years as fossil fuel companies built pipelines through his homelands.

“How can we continue to resist the fossil fuel infrastructure?” thought Blake, executive director of Native Sun Community Power Development. “That’s when we noticed this grant opportunity for electric vehicle charging stations.”

In 2021, Native Sun received nearly seven million dollars from the US Department of Energy to build a network of charging stations between 23 reservations in Minnesota, South Dakota and North Dakota — states with some of the lowest numbers of charging stations in the country. The project, Electric Nation, also provided 15 electric vehicles to Red Lake Nation and Standing Rock, with more scheduled for delivery.

Globally, the electric car revolution is booming, according to a new report from the International Energy Agency. It predicts that surging demand over the next decade will remake the global auto industry and significantly reduce oil consumption.

In the US, electric vehicles are quickly moving from fringe to mainstream. Although the industry faces near-term challenges, the IEA report predicts almost one in five cars sold in the United States will be electric by 2030. A February report by Clean Investment Monitor found that, despite headlines suggesting a slowdown, 2023 sales in the US were at the top of the range of projections.

The shift to electric vehicles is fundamental to emission reduction goals in the US, one of the world’s largest greenhouse gas (GHG) emitters — second only to China. Transportation is the economic sector with the largest GHG emissions in the US, making up 28 percent of total emissions.

For Blake, encouraging the switch to EVs is one way to resist fossil fuels. “The oil company may get their pipeline built, and they may win the battle, but they’re not going to win the war,” he said.

EV trajectory is upward

There is no doubt that the US has lagged behind China, the EU and Norway in putting its pro-EV policies in place, but it is now following the same path as successful countries, explained Joel Jagger, senior research associate at the World Resources Institute’s Systems Change Lab.

“Overall, it’s going really well,” he said. “Even just last year, the US sold one million EVs for the first time.” Sales increased by about 50 percent from 2022 to 2023, which he called “eye-popping growth.”

Jagger attributes the growth to the 2022 Inflation Reduction Act, which provides renewable energy funding and tax credits, the 2021 Infrastructure and Investment in Jobs Act, which allocates five billion dollars from 2022 to 2026 to build charging stations, and new regulations this year from the Environmental Protection Agency.

The EPA projects the new pollution standards will result in two-thirds of new passenger vehicle sales being electric by 2032, while also improving air quality and preventing seven billion tonnes of carbon emissions. “Those are going to be really impactful,” Jagger said of the EPA regulations.

Although electricity demand will increase slightly as EVs become more widespread, the switch will reduce overall fossil fuel demand, Jagger said. “Demand would slightly increase for electricity with a percent of that coming from fossil fuels, but that would be heavily outweighed by the decrease in demand for gasoline, which is 100 percent fossil fuel,” he said. Over time, as the energy transition happens, the share of fossil fuels powering the grid will decrease.

For now, some carmakers face short-term hurdles. In April, Tesla reported that sales were down, leading to a 9 percent drop in revenue in the first quarter of 2024. Safety issues with its “Cybertruck” led to a recall, and it has struggled to compete with other EV companies entering the market.

While Tesla’s bad sales quarter is generating negative headlines, Jagger said it’s important to look at the big picture.

“Yes, there’s gonna be some bumps, but overall the trajectory is upward,” he said. “There’s a lot of ups and downs as these automakers try to beat each other in the new EV markets. There’s lots of ambitious plans, there’s lots of new EV models being released, and they’re not all going to be a smashing success right away.”

Short-term factors slowing the transition

Still, the EV transition faces hurdles. For instance, the IRA tax credits incentivise domestic production of batteries and minerals.

“Those domestic content requirements might be a bit of a slowdown in the short run, as manufacturers switch their supply chain and bring manufacturing onshore, but that’s ultimately going to help in the long run,” Jagger said. Domestic mining for lithium used in EV batteries has run into opposition from Native American communities who say it will desecrate sacred sites, harm endangered species and pollute the environment.

Possibly the biggest challenge is “range anxiety” and lack of charging stations.

Most people who own EVs are charging them at home, explained Tom Taylor, senior policy analyst at Atlas Public Policy. “EVs are really well-matched if you have a garage and you can just plug in a charger,” he said.

But people living in apartment buildings, or planning long trips, must rely on public charging stations, which are far from perfect — they may require adaptors for certain vehicles, may not charge fast enough, or they might not exist in certain places, Taylor said.

 

Another challenge on that front has come from Tesla in April as the company backed away from planned Supercharger locations.

Although EVs are becoming longer-range, Jagger agreed with Taylor, “If nothing is done to put up more charging infrastructure, that will continue to be a barrier,” he said.

Cost is another barrier. The IEA report says that the pace of the transition hinges on affordability; EV prices are dropping, but most are still more expensive than internal combustion engine vehicles.

The Inflation Reduction Act helps out by providing up to $7,500 in tax credits for buying an EV, Jagger pointed out. “Those tax credits extend until 2032, which creates certainty for the auto industry,” he said.

The cost of fuel and maintenance for EVs is generally lower. Taylor explained there may be “growing pains” sourcing parts for repair, but they have fewer moving parts than internal combustion vehicles. “That’s where the cost savings come in,” Taylor said.

The November election could also lead to a shift in climate policy. Republicans and fossil fuel industry groups have promised to fight the new EPA regulations, although laws like the Inflation Reduction Act will be harder to kill. “Policy in the US is pretty durable — when something is passed in Congress, it takes a higher threshold for it to be repealed,” Jagger said.

“I really do think that the transition to EVs is inevitable,” he added. “It’s more about how fast it’s going to go.”

When will EVs become mainstream?

The Biden administration’s goal is for EVs to reach 50 percent of light-duty vehicle sales around 2030. “This seems to me like an achievable goal, considering the tax incentives of the Inflation Reduction Act, the newly finalised EPA regulations on car emissions, and the trajectory that EV sales have taken in other countries,” Jagger said.

Taylor predicted there will be internal combustion engines on the road for years to come, but EVs will be a common sight on the roads by 2032, if the EPA’s pollution standards stay in place. “People will not blink an eye when you’re driving an EV,” he said. “In fact, it will be perhaps strange to be buying an internal combustion engine in 2032.”

In some states, the transition will happen much faster. EVs are already common in California, which has its own emissions regulations and is the leading state for EV sales and number of chargers.

Electric cars are only one part of decarbonising transportation. “Not everyone should have a car,” Taylor said. “It’s really important, as part of addressing climate change, that people have access to good transit.”

In remote areas with fewer charging stations, Blake expects drivers will be more likely to buy hybrids in the near term. But he is optimistic that electric vehicles will become common in Red Lake Nation by 2040 thanks to government funding, tax incentives, regulations and the technology becoming cheaper over time.

“That investment into the necessary infrastructure is going to really drive the adoption of EVs in these communities,” he said.