The US Inflation Reduction Act’s electric vehicle incentives can more than double the industry’s sales from the prior forecasts, according to S&P Global Mobility.
Forecast highlights
S&P Global Mobility updated its forecast for the US 2030 electric vehicle sales. According to its latest analysis, plug-in sales will reach more than 6 million per year by the end of this decade.
It further indicated that all-electric vehicles will account for more than two-thirds of the overall volume. As per the forecast, EV sales are now on track to surpass the 4.6 million mark by the same period.
This EV sales forecast is indeed a piece of good news for the country’s shift to electric mobility. However, it would also increase the pressure on the electrical grid.
“Given the forecasted increase in EV sales, electricity load is expected to increase, reaching 83 TWh by 2030. In addition to the increase in forecasted vehicle sales, a larger proportion of these will be fully electric vehicles, generating a higher electricity demand. It is widely recognized that an upgrade of the power grid will be required to ensure the charging network can support the intended sales growth.”
Suzanna Massingue, S&P Global’s low-carbon transportation analyst
Previous forecast
In retrospect, S&P Global initially forecasted the US to reach 2 million electric vehicle sales in 2030. It must be noted that this analysis was before the IRA took effect.
Therefore, the updated guidance of more than 6 million units demonstrates an increase of 4 million units.
As per the analysis, this significant adjustment is largely due to the IRA’s outcomes. Some of these include greater manufacturing investment and revised tax credits to qualify more EV models, as noted by Green Car Reports.
IRA boosts US EV uptake
President Biden’s IRA has significantly accelerated the US’ shift to electric vehicles. It encouraged global automakers to establish local production of EV models and batteries in the country to benefit from the tax credits of up to $7,500 per unit.
Established players invested millions of dollars to explore lithium reserves in the US. Motor1 indicated that these efforts advanced the US’ position as the second leading nation in the search for this critical mineral.
Market Intelligence’s data revealed that the US’ overall lithium exploration budget grew from just $48.4 million in 2021 to $93.5 million in 2022.
See Also:
- IRA boosts US Solar and Storage industry by more than $100B
- Local power battery production continues to expand, driven by a clause in IRA
- Tesla battery suppliers enjoy shares growth amidst IRA tax credits
- The IRA significantly boosts the EV supply chain in the US
- The IRA bill is expected to boost the US EV market by 20%
All that said, the US IRA undoubtedly plays a significant role in accelerating the country’s shift to clean and sustainable mobility. However, it must continue to improve and expand its nationwide charging network to accommodate the growing number of EVs.
