Electric Vehicle Trends in the US
KEY POINTS IN THE ARTICLE
- The electric vehicle boom in the US will continue in 2023 as EV manufacturers ramp up production.
- Tax credits and an expanding EV charging network will fuel EV adoption in the country.
- Key benefits of electric vehicles include cost savings and minimal maintenance requirements.
- Government agencies like the USPS intend to introduce EVs in their delivery vehicle fleets.
Most battery electric vehicle companies are all in on the EV boom in the US. State-of-the-art EV technologies are increasingly attractive to prospective automobile customers, pushing legacy automakers to shift away from traditional ICE vehicles gradually. For instance, Mercedes Benz just released their latest tech-packed EV model.
Let’s explore EV trends in the US and the factors driving the current EV explosion.
Reasons Behind the Growing EV Adoption in the US
Battery electric vehicle (BEV) sales reached approximately 800,000 in the US in 2022, an almost 100 percentage point increase from the previous year. Factors fueling the growing adoption of EVs in the US market include;
1. Tax Credits
The 2022 Inflation Reduction Act (IRA) spells out tax credits for EV manufacturers in the United States. EV manufacturers that build EVs in the United States and source crucial battery materials and parts locally are eligible for tax credits of up to $7500. Industry experts expect EV sales to spike in March 2023 when certain aspects of the Act’s tax credit guidelines come into play.
The tax credits will allow legacy automakers such as General Motors and Ford to lower the price of their electric vehicle models in the United States. The lower EV prices represent a marked shift from the higher EV prices of models from high-end manufacturers like Tesla. For example, the tax credits will enable General Motors to release a base model listed for under $25,000 this year.
2. Charging Stations
The federal government and governments in states like California are investing heavily in charging infrastructure. Adequate charging stations help eliminate range anxiety among EV drivers and encourage prospective EV buyers to choose an EV over a traditional ICE vehicle.
The growing network of DC fast charging stations across the United States is fuelling EV adoption. Even though Tesla dominates fast charging with its extensive Supercharger network, other industry players, including Electrify America and EVgo, are increasing their investments in DC fast charging networks. DC fast chargers enable EV owners to charge their vehicles to 80 percent in roughly 20 minutes.
Urban areas have better EV charging infrastructure than rural areas. The increased penetration of rural EV charging infrastructure in 2023 could incentivize rural residents to purchase electric vehicles.
3. Mass Production of Electric Pickup Trucks
The United States is the world’s largest pickup truck market, and revenue from the segment is projected to reach an estimated $74 billion in 2023. The market share of electric pickup trucks will increase as legacy pickup truck manufacturers ramp up production of the vehicles.
The demand for BEVs in the US continues to outstrip supply. For instance, Ford’s F-150 Lightning pickup truck has an estimated 200,000 pending orders, and the company only fulfilled 15,000 orders in 2022. The current market share for BEVs in the United States can triple if manufacturers ramp up production to satisfy demand.
Projections for Mass EV Adoption in the US
Industry experts project that mass EV adoption in the United States will happen as soon as electric vehicles achieve price parity with cheap ICE automobiles. Batteries account for anywhere between 30 and 40 percent of the cost of a battery electric vehicle. The completion of new battery manufacturing plants in Tennessee, Kentucky, and Texas and the expansion of Tesla’s Reno facility will result in higher economies of scale, lower battery prices, and ultimately cheaper BEVs.
EVs versus Traditional ICE Vehicles
EVs are the first generation of software-defined vehicles thanks to their reliance on technology, computing power, and software to perform wide-ranging tasks. On the other hand, some controls and mechanisms in traditional ICE vehicles are not computer powered.
Electric vehicles’ software and computing power make them safer and give drivers a better driving experience. Nonetheless, tech-packed BEVs are susceptible to hacks, glitches, and bugs that affect their performance. BEVs with optimized software packages can achieve full self-driving.
Benefits of EVs
1. Minimal Maintenance Requirements
Unlike traditional ICE vehicles that require owners to change spark plugs, clean carburetors, and change engine oil, EVs are easier to maintain and have low servicing costs in the long term. EVs rely on reliable electric motors that require little maintenance.
2. Environmental Benefits
BEVs do not emit harmful gases such as carbon dioxide since they depend on electric power to move. This helps reduce pollution-related illnesses, premature deaths, and the country’s carbon footprint.
3. Cost Savings
While the upfront cost of acquiring a BEV may be higher than that of an ICE vehicle, BEVs enable users to save fuel costs in the long run. EV drivers save anywhere between $1000 and $9000 annually on fuel expenses over an EV’s lifetime. EV owners can also expect to save approximately $4600 on repair costs over the vehicle’s lifetime.
EV Adoption Among US Government Agencies
United States Postal Service (USPS) intends to upgrade its fleet of delivery vehicles in 2023. While the agency initially intended for electric cars to make up less than 50 percent of the new fleet, public complaints pushed the agency’s management to revise the percentage higher. USPS needs a new rolling stock since its current delivery vehicles are over 30 years old and are increasingly more challenging to maintain.
USPS’s upgrade plan presents unique challenges since the electric vans the agency intends to acquire have larger dimensions than its current fleet. Limited spaces and loading docks for big delivery trucks at some USPS parking lots mean that multiple EVs will not have enough room. USPS must consider the bottlenecks of its upgrade plan, particularly for small towns.
Bottom Line
Industry experts project that the current EV boom in the US is expected to continue in 2023. Tax credits, expanding charging infrastructure, and the mass production of electric pickup trucks will fuel this explosion. EVs have minimal maintenance requirements and allow owners to save on wide-ranging costs.
