Majority of US car sales will be electric by 2030, forecast says

MANILA: According to a report from BloombergNEF, over half of passenger car sales in the US by 2030 would be electric vehicles partly because of the customer incentives provided by the $374 billion in additional climate spending approved by President Joe Biden.

BloombergNEF analysts said that these incentives, which include a point-of-sale tax credit of up to $7,500 (approximately P437,000) for a new electric vehicle purchase, are expected to accelerate adoption. Before the Inflation Reduction Act was passed in August, forecasts for electric vehicle sales in 2030 indicated that 43% of the US market will be accounted for by electric vehicles. That projection was increased to 52% when the climate-spending policy was enacted.

According to the latest forecast from BloombergNEF, the US is on course to meet an important target set by President Biden last year, which is for 50% of all vehicles sold in the US to be battery-electric, plug-in hybrid, or fuel cell-powered by the end of the decade.

Less than 5% of new cars sold in the US in 2021 were electric vehicles, 9% lower than the global rate and much lower than the adoption rate in countries like China, where plug-in hybrid vehicles already make up about 24% of new car sales. Sales of electric vehicles surpassed those of ICE-powered vehicles for the first time in Norway last year. According to BloombergNEF’s updated forecast, the US will reach the global average in 2026 rather than 2028.

According to the report, Tesla, GM, and Ford stand to gain the most from the new law as the majority of domestic battery production is expected to come online in the near future. West Virginia Senator Joe Manchin proposed that the IRA confine the $7,500 credit to vehicles manufactured in North America, with extra phased-in thresholds for manufacturing batteries in the region.

BloombergNEF analysts stated in the latest report that these regulations will need more time to adhere to as carmakers deal with critical mineral and battery rules. However, it is anticipated that these obstacles would lessen over time, which could lower the cost of more electric vehicles.

“In the next year or so, there shouldn't be too much of a difference [in sales>,” BloombergNEF Electric Car Analyst Corey Cantor stated. “Later in the decade, we expect not only the EV tax credit but the battery production tax credit to drive a steeper decline in EV costs.”

Photo from Ford

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