Although the epidemic has impacted many industries, the field of electric vehicles and charging infrastructure is an exception. Even the U.S. market, whose global performance is not outstanding, has started to soar.

Techcrunch, an American technology blog, predicted the U.S. electric vehicle market in 2023, saying that the Inflation Reduction Act (IRA) passed by the U.S. government in August has had a huge impact on the electric vehicle industry, and automakers are trying to transfer their supply chains and factories to the United States.

Not only Tesla and GM, but also companies like Ford, Nissan, Rivian and Volkswagen will benefit from it.

In 2022, the sales of electric vehicles in the United States were dominated by a few Model S, such as Tesla's Model S, Model Y and Model 3, Chevrolet's Bolt and Ford's Mustang Mach-E. In 2023, with the commissioning of the new factory, more new models will be introduced, and their prices will be more affordable.

It is predicted that by 2023, traditional automobile manufacturers and electric vehicle start-ups will produce as many as 400 new models.

Moreover, in order to avoid "falling off the chain" in charging pile infrastructure, in 2022, the United States announced that it would plan a budget of 7.5 billion US dollars to build 500,000 public charging piles, and the non-profit organization ICCT estimated the demand for public charging piles in the United States before 2030.

The quantity will exceed one million.

Growing electric vehicle market

The global electric vehicle market, including hybrid electric vehicles, Plug-in Hybrid Electric vehicle and Battery Electric vehicle, continues to heat up in the harsh environment of COVID-19 pandemic.

According to McKinsey's research report (Fischer et al., 2021), although the global automobile sales are generally sluggish, 2020 is a big year for electric vehicle sales. By the third quarter of that year, the global sales of electric vehicles actually exceeded the level before the COVID-19 outbreak.

Among them, sales in Europe and China in the fourth quarter increased by 60% and 80% respectively compared with the previous quarter, pushing the global electric vehicle penetration rate to a record high of 6%. Although the United States lags behind the other two regions, the sales of electric vehicles increased by nearly 200% between the second quarter of 2020 and the second quarter of 2021, helping to achieve a domestic penetration rate of 3.6% during the pandemic.

However, if we carefully observe the geographical distribution of electric vehicle registration in the United States, we will find that the increase of electric vehicle adoption rate does not occur evenly in all regions; It is closely related to the population density and prevalence rate in metropolitan areas, and it varies from state to state. Some states have higher registered number and penetration rate of electric vehicles.

One outlier is still California. According to the data from the Alternative Fuels Data Center of the U.S. Department of Energy, the number of light electric vehicles registered in California surged to 425,300 in 2020, accounting for about 42% of the national electric vehicle registrations. This is more than seven times the registration rate of Florida, which has the second largest number of registered electric vehicles.

Two camps in the charging pile market in the United States

Besides China and Europe, the United States is the third largest charging pile market in the world. According to IEA statistics, as of 2021, there are 2 million new energy vehicles in the United States, 114,000 public charging piles (36,000 charging stations), and the ratio of public vehicles to piles is 17: 1, of which slow charging accounts for about 81%, slightly lower than the European market.

Charging piles in the United States are classified into AC slow charging (including L1- charging for 2-5 miles in 1 hour and L2- charging for 10-20 miles in 1 hour) and DC fast charging (charging for more than 60 miles in 1 hour). At present, AC slow charging L2 accounts for 80%, and the main operator ChargePoint contributes 51.5% of the market share; DC fast charging accounts for 19%, led by Tesla, with a market share of 58%.

According to the report of Grand View Research, the market size of electric vehicle charging infrastructure in the United States in 2021 was USD 2.85 billion, and it is expected to grow at a compound annual growth rate (CAGR) of 36.9% from 2022 to 2030.

2022: Sales Year of Electric Vehicles

The U.S. electric vehicle market is expected to grow from USD 28.24 billion in 2021 to USD 137.43 billion in 2028. The forecast period is from 2021 to 2028, with a compound annual growth rate of 25.4%.

2022 is the year with the largest sales of electric vehicles in the United States on record. In the third quarter of 2022, the sales volume of electric vehicles continued to exceed that of gasoline-powered vehicles, and over 200,000 electric vehicles were sold in three months, setting a new record.

Tesla, the pioneer of electric vehicles, remains the market leader, with a 64% share, down from 66% in the second quarter and 75% in the first quarter. The share decline is inevitable, because traditional car manufacturers hope to catch up with Tesla's success and compete to meet the growing demand for electric vehicles.

Ford, GM and Hyundai are leading in this respect, because they have expanded the production scale of popular electric vehicle models, such as Mustang Mach-E, Chevrolet Bolt EV and Hyundai IONIQ 5.

Despite rising prices (not just electric cars), American consumers are buying electric cars at a record rate. New government incentives, such as the tax credit for electric vehicles stipulated in the Inflation Reduction Law, are expected to drive further demand growth in the next few years.

At present, the total share of the electric vehicle market in the United States has exceeded 6%, and efforts are being made to achieve the goal of 50% share by 2030.

Sales Distribution of American Electric Vehicle Market in 2022

2023: The share of electric vehicles increased from 7% to 12%

McKinsey's research shows (Fischer et al., 2021) that the sales of electric vehicles may continue to increase, driven by more investment from the new administration (including President Biden's proposal that by 2030, half of new car sales in the United States will be the goal of zero-emission vehicles), credit plans adopted at the state level, stricter emission standards, and more and more electrification commitments of major original equipment manufacturers in the United States.

Moreover, billions of dollars of proposed infrastructure expenditure can promote the sales of electric vehicles through direct measures such as consumer tax credit for purchasing electric vehicles and building new public charging infrastructure. Congress is also considering a proposal to increase the current tax credit for the purchase of new electric vehicles from $7,500 to $12,500, in addition to making second-hand electric vehicles eligible for tax credits.

In addition, through the bipartisan infrastructure framework, the government has promised to provide 1.2 trillion dollars for transportation and infrastructure spending within eight years, with an initial investment of 550 billion dollars. The agreement is being adopted by the Senate, including $15 billion to accelerate the adoption of electric vehicles and accelerate the electric vehicle market in the United States. The plan reserves $7.5 billion for building a nationwide electric vehicle charging network, and another $7.5 billion for low-emission and zero-emission buses and ferries to replace school buses that use diesel.

Mckinsey's analysis shows that, on the whole, new federal investment, more and more states providing incentives and tax rebates related to electric vehicles, and favorable tax breaks for electric vehicle owners will probably stimulate the adoption of electric vehicles in the United States.

Stricter emission standards may also encourage American consumers to adopt electric vehicles more and more. Several states on the east and west coasts have adopted the standards set by the California Air Resources Board (CARB), and more states are expected to join in the next five years.

To sum up, favorable regulatory environment for electric vehicles, increased consumer interest in electric vehicles, and the planned shift of automobile original equipment manufacturers to electric vehicles may all contribute to the continued rapid growth of electric vehicle sales in the United States in 2023.

It is estimated that the market share of electric vehicles in the United States will reach 12% next year, which is higher than the current 7%.

In McKinsey's most optimistic forecast scenario for electric vehicles, by 2030, the sales of electric vehicles will account for about 53% of all passenger cars. If the promotion of electric vehicles is accelerated, electric vehicles will contribute more than half of the sales of cars in the United States by 2030.