Charging Ahead: Taking Stock of the Electric Vehicle Market in the US

In the US, annual electric vehicle (EV) sales have grown by more than 1 million units over the last three years, amounting to a roughly 9% share of all new vehicle sales in 2023, but the recent slowdown in sales could threaten the country’s progress toward achieving its climate goals. This article provides an overview of the current state of the US EV industry and assesses how price stickiness, recent consumer hesitancy, and industrial policies have affected the market.

• Compared to some international economies, particularly China, EVs in the US are still relatively more expensive up front than their internal combustion engine (ICE) counterparts, making them less attractive for businesses and consumers.
• However, businesses that shift to EVs when replacing passenger and light duty ICE fleet vehicles can realize lower operating costs as well as reduced greenhouse gas (GHG) emissions over the lives of their vehicles.
• In the US market, EV price parity with ICE vehicles may be reached by 2027 due to increased price competition, more efficient manufacturing, and falling input prices owing to lower battery component costs.
• Supply chains and market access remain critical issues both for global EV manufacturers attempting to access the US market and US domestic producers securing critical minerals and components for batteries from overseas.