EV sales are booming. Here’s how America can stay in the race

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If you base your opinion on recent news, you might think that the electric vehicle industry in the US is in serious trouble. Headlines say carmakers are worried about EV growth, consumer demand is waning, and President Biden’s tax breaks haven’t helped nudge consumers toward EVs.

So this news may come as a surprise: EV sales increased 50% in the third quarter compared to a year earlier. Electric vehicles are actually selling faster than any other automotive segment, and total sales are expected to exceed 1 million this year for the first time.

According to S&P Global Mobility, about 67% of US citizens are ready to buy an EV. Yes, you read that right. They work on a societal level (they create jobs, reduce our dependence on foreign fossil fuels, and are vital in the fight against climate change) and on a personal level (they require less maintenance, are gas-free). Recognize the value of EVs. prices, and are incredibly fun to drive).

ev sales kelly blue book

Does this look like a market with declining demand? Image Credit: DVX Ventures using Kelley Blue Book data

The bottom line: American consumers want EVs.

The problem is that the US is already behind in the global EV race, and some are advocating for us to slow down even more. If we relax EV adoption now, it won’t mean fewer EVs; This would only mean a reduction in US-made EVs, resulting in fewer jobs in the country. Those politicizing EVs might want to consider the economic impact of their words.

We are lagging behind in the factors that will tip the scale: competitive prices, charging infrastructure, consumer choice and domestic supply chains. That’s why focusing only on consumer demand misses the bigger point about the ecosystem for EVs: whether we want to or not, America will have to adopt EVs, and to do so we have to foster a better environment.

The global market has already made up its mind on EVs. The best-selling car in the world, and not just the best-selling electric car, is the Tesla Model Y. In Europe, 21.6% of all new vehicle registrations in 2022 were EVs. In China, 50% of people said they were likely to buy an EV as their next vehicle. In the US, EVs accounted for 5% of new car sales for the first time in January 2023, and that number had increased to 7% by September.

The auto industry is going through one of the biggest technological transformations in its history. Europe and China saw this before us and invested heavily in EVs a decade ago. This is why the US finds itself lagging behind in battery technology and charging spaces today, and dependent on Korean and Chinese battery manufacturers.

As America’s largest manufacturing sector, the automotive industry is a nearly $2 trillion annual market, and accounts for 3% of our GDP. It is also responsible for more jobs than any other manufacturing sector. Despite all the talk about making sure we don’t lose our lead in chips and AI, the truth is that we can’t afford to lose our lead in automotive manufacturing technology.

There is cause for outrage, but it is not as dire as the news is making it out.

The reality is, we won’t see a seamless transition from gas cars to EVs. Demand for EVs has increased, but not as fast as U.S. automakers had hoped. And it’s true that all the automakers who had bet big on EVs had to delay investments and change plans for manufacturing.

This is because there are some real barriers to switching (pun intended).

EV infrastructure is still lacking in the US. Consumers have legitimate concerns about charging their car, and less than half of U.S. mayors said they feel ready to support widespread EV adoption. Our cities need more charging stations, more power sources, more electricians… the list is long.

Although prices have come down, they are still too high for some buyers. Today you can buy an EV for $30,000 (before tax credits), but options are still limited compared to gas cars: You can now choose from more than 40 different EV models, but if you buy a gas car , so you have hundreds of models to choose from. Plus, car dealers are often more amenable to helping buyers understand those options.

There’s no denying that these factors impact demand, but I don’t think any of these issues undermine the ultimate promise and potential of EVs.

Sometimes, when things become bigger, bigger problems emerge. This is not happening here. Barriers to adoption are solvable. These problems are already being addressed through myriad public and private partnerships, industry deals, and new companies. Through tax policies and CHIPS legislation, some of these barriers to entry are being broken.

In 2018, when I was president of Tesla, Piero Ferrari (yes, that Ferrari) came to visit the Tesla factory and raved about our electric sedan, which was faster than their supercars. He wanted to see with his own eyes what we were doing.

Fast forward to 2021, Ferrari introduced its first hybrid car to the market, and in 2025, Ferrari plans to sell its first fully electric car. Even a legacy, luxury sports car maker with the oldest and most successful F1 team recognizes consumer demand for EVs.

But it may be too little, too late for the Italian auto manufacturing industry. Italy once produced some of the most acclaimed and coveted cars in the world, but Italian companies and policymakers did not invest in growing the industry. In 1997, Italy manufactured 1.8 million vehicles; Last year, just under 800,000 thousand cars were produced in the country.

We passed To solve these problems.

As we enter the new year, we’re going to see a new round of EV sales figures. Sales may be better than we expected, or demand may grow a percent or two less than we expected. Whatever those numbers are, I expect skepticism will persist.

Still, we can’t lose sight of the bigger picture. If we want to remain a leader in this multi-trillion dollar industry, or keep manufacturing jobs, or stop relying on other countries for our cars, we have to stay on this path. We have to be aggressive in overcoming the obstacles we face and push for adoption. To do this, we need leadership and determination in both the public and private sectors.

before it’s too late.



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