While the US has seen a significant increase in electric vehicle (EV) sales, with over 1.2 million sold last year and a new high of 10% market share in August, it still lags behind many other global markets. This recent boom appears to be driven by a rush to take advantage of a now-expired government tax credit of up to $7,500, leading automakers to predict a downturn in demand as the incentive disappears.
Carmakers like Ford and General Motors have acknowledged that EV sales are likely to decrease significantly following the end of this subsidy. This trend places the US behind countries like the UK, where EVs and hybrids made up nearly 30% of new sales last year, and China, the world’s largest auto market, where such vehicles accounted for almost half of all sales.
Analysts attribute the slower adoption in the US to less robust government support compared to other nations. While the Biden administration aimed for EVs to constitute 50% of US sales by 2030, introducing measures like stricter emissions rules and charging infrastructure investment, these efforts are being challenged by policies that favor traditional vehicles. Furthermore, high tariffs on cars manufactured in China have effectively excluded competitive, lower-priced options from the US market.
The average price of an EV in the US remains higher than comparable gasoline-powered cars, with the least expensive models costing around $30,000, compared to sub-£20,000 options in the UK. Carmakers are now facing the challenge of balancing these economic pressures, with some, like Hyundai, planning to lower EV prices to offset the loss of the tax credit, while others, like Tesla, anticipate increased leasing costs.
Experts anticipate a challenging year ahead for the EV sector in the US due to the combined impact of expiring incentives and existing tariffs. Some analysts also question whether EVs are the ultimate solution, suggesting it might be too early to definitively label the US as behind in a rapidly evolving industry.