In one fell swoop, battery health and data start-up Recurrent has attempted to debunk several negative headlines regarding electric vehicle sales being in the slow lane.
Citing a preliminary projection from Boston Consulting Group, Recurrent said that both battery electric vehicles and plug-in hybrids are on track to account for 50% of new car sales in the U.S. alone by 2030. The study is based on lithium-ion battery costs, influx of new and affordable models, government incentives and more.
That also indicates that a much-criticized goal of the Biden Administration—EVs reaching 50% of the market by the start of the next decade—may be more attainable than many critics thought, although this calculus now includes PHEVs as well.
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Many studies show positive EV growth
EV adoption has proven far more complex than previously thought. Some studies say half of the U.S. would remain deeply divided on EVs even in the long term, yet adoption rates are expected to skyrocket thanks to favorable policies, an influx of affordable new models and steady improvement in driving range and charging infrastructure.
Meanwhile, Tesla sales have slowed down recently, but the company is no longer singularly synonymous with EVs. Tesla’s rivals are witnessing double-digit percentage growth in their EV deliveries and the used market remains attractive for buyers seeking affordable EVs.
The projection will be finalized in the fall, so it’s subject to change, but it’s in sync with forecasts from the International Energy Agency and is only slightly more optimistic than projections from research firm BloombergNEF.
Lithium prices have plunged in recent years. Bloomberg said in a latest report that lithium iron phosphate (LFP) cell prices nosedived by 51% to an average of $53 per kilowatt-hour in China. “Battery cells at $50/kWh means the technology to decarbonize most of road transport globally is already here,” the news wire reported.
The more popular nickel-based chemistries used in long-range models are also reaching a point where EVs are becoming cheaper in China than equivalent combustion cars. Overcapacity and a spillover effect mean that similar trends are expected in other parts of the world, the U.S. included, according to the report.
To counter slowing growth rate and to get EVs off dealer lots, automakers began offering attractive lease and finance options in 2023. This resulted in an explosion of plug-in vehicle sales in 2023, with nearly 1.8 million units sold. Many of those three-year leases would end in 2026 and Recurrent expects an influx of EV lease returns that year, meaning relatively new models would be back on the secondhand market at presumably attractive rates.
In 2026, we’re also expecting a number of new affordable model launches, including Tesla’s affordable EVs, Ford’s “skunkworks” models, the next-gen Chevy Bolt EUV, Kia EV3 and more. This, Recurrent says, would lead to the start of a “Mass Adoption Phase” by the end of 2025.
Government incentives and the Environmental Protection Agency’s emissions targets are expected to further boost the U.S. EV market share to 50% by the end of the decade. The Biden Administration, through programs like the Inflation Reduction Act and the Bipartisan Infrastructure Law, has allocated hundreds of billions of dollars towards the construction of local battery plants, incentivizing charging stations and tax rebates.
Lastly, the EPA’s 2027-2032 emissions standards would compel automakers to increase the share of their BEV sales towards the end of the decade. The agency has proposed automakers to sell between 30-56% BEVs as a part of their overall production to meet the emissions targets.
Although this isn’t required, automakers can also meet the emissions criteria by selling a mix of HEVS, PHEVS and BEVs. Regardless of the mix, the criteria are designed to boost BEV adoption.
This is one study and a mere projection. We can’t say for sure, but the EV growth might get thwarted off-track next year if former President Donald Trump is reelected; he's become a prominent critic of the technology and is quite unlikely to offer as many green-focused subsidies and incentives as Biden. Moreover, software-dependent EVs being new, automakers are still undergoing a massive phase of learning.
It's a long and tedious road ahead, but a promising one to say the least.
Contact the author: suvrat.kothari@insideevs.com
