Latest US climate initiatives have sent the electric vehicle market into “overdrive.” In fact, the EV market in the United States increased by 6.7% from just 1.8% in 2019 in the first six months of 2022, as reported by Electrek. Interestingly, the latest data reveals that this is just the beginning.
BNEF suggests that “the US EV fleet will be over 20% larger by 2030 than previously forecasted” due to recent US climate initiatives.
Why does the US lag behind other countries in EV uptake?
BloombergNEF reported that North America has an anticipated 1.64 gigatonnes of carbon dioxide this year. Notably, it holds the highest transportation-related emissions worldwide.
However, the US has adopted EVs more slowly over the past few years than China and Europe have. For reference, approximately half (56%) of all EV sales worldwide in the first half of 2022 were attributed to China, with 28% coming from Europe.
Between 1H 2019 and 1H 2022, the market share of EVs in the following European nations proliferated:
It is important to note that other nations have deployed fast chargers (and EV chargers in general) considerably more rapidly than the US. Apart from that, stronger laws and regulations have also accelerated the transformation.
How does climate initiatives influence EV uptake?
The United States revised fuel economy regulations, and recent climate efforts are reportedly accelerating the EV market. For instance, the Inflation Reduction Act offers the following:
- a tax credit of about $7,500 for the purchase of a new light-duty EV
- $4,000 for the purchase of a second-hand EV
- $40,000 for the purchase of a heavy-duty commercial EV
According to a report by BloombergNEF, the US EV market prospects have significantly shifted in recent months:
“Recent regulatory changes in the US – the Inflation Reduction Act and revised fuel economy regulations – are expected to accelerate EV uptake in the country and bring it closer to the EV’ leaders.”
As opposed to 31% under the previous policy, BNEF predicts that 64% of EV sales during the first six months of 2022 qualify for at least a portion of the new EV tax credit.
The IRA bill also has competitive incentives to hasten local battery production. With 15 new EV battery factories or expansions, the IRA law has already brought in over $40 billion.
Furthermore, the National Electric Vehicle Infrastructure (NEVI) program provides $5 billion in funding to build a national EV charging network. This initiative is expected to encourage EV adoption throughout the country. Remarkably, plans to construct the network have now been approved for all 50 states.
EV sales are setting new monthly records, demonstrating how effective the latest initiatives in the United States are. Therefore, 2023 should be a significant year for EV adoption in most US states.