Cruising to a Million: US EV Sales Near Key Milestone
Nov 30, 2023
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US EV sales are reaching 1 million this year. They discuss the Inflation Reduction Act, EV uptake in red and blue states, and whether Rivian can scale up. The podcast also highlights the impact of the UAW strike on EV companies and the potential impact of a provision on the US EV market. Lastly, they explore the polarization of EV adoption among different states and the appeal of Tesla's Cybertruck.
US EV sales are rising and expected to reach 1 million this year, indicating growth in the market.
Rivian's emergence as a potential competitor in the EV market and their success depends on scaling up production and avoiding major battery issues.
Deep dives
Overview of the US electric vehicle market
The podcast episode provides an overview of the current state of the electric vehicle (EV) market in the United States. While California has high EV ownership rates and a well-established charging network, the nation as a whole lags behind China and Europe in terms of EV sales and market share. However, recent data shows that EV sales in the US are actually rising. GM and Ford have delayed their near-term EV sales targets, but data suggests that overall EV sales in the country are up 55% year-on-year for battery electric vehicles (BEVs). The US recently reached a significant milestone of 1 million annual EV sales, although it still trails behind Europe and China in terms of market share.
Introduction of Rivian and its potential in the EV market
The podcast highlights the emergence of Rivian, an electric vehicle manufacturer, as a potential competitor in the EV market. Rivian recently ended its exclusivity deal with Amazon for commercial vehicles and is now entering the 'EV Valley of Death,' a phase where startups scale up to mass production. The company has seen significant sales and production growth, and its CEO has expressed optimism about their future prospects. Rivian's success depends on avoiding major battery issues and successfully scaling up production. Additionally, the podcast discusses the potential of Rivian's commercial fleet, which aims to contribute to reducing emissions in the commercial vehicle sector.
Impact of various factors on US EV sales
The podcast explores the impact of factors such as the recent strike by the United Auto Workers, dealership dynamics, and government policies on US EV sales. The strike and resulting wage hikes for union workers may have contributed to the delay of near-term EV sales targets by GM and Ford. The dealership model of selling vehicles directly to consumers varies by state, affecting the availability and prices of EVs. While some states allow direct sales, others have restrictions that limit consumer access. Furthermore, government policies like the Inflation Reduction Act (IRA) have both positive and negative implications for the EV market. The IRA offers tax credits and incentives for EVs but includes provisions that may restrict foreign entities' involvement in the US EV market.
Influence of California's policies on electric vehicles
California's policies have had a significant influence on the adoption of electric vehicles in the US. The state has implemented the Zero Emission Vehicle (ZEV) program, which encourages the sale of battery electric vehicles, fuel cell vehicles, and plug-in hybrids. Additionally, California's Advanced Clean Cars II program aims to phase out the sales of internal combustion vehicles by 2035, setting a pathway for reduced emissions. Other states, such as New Jersey, Massachusetts, and Maryland, have followed California's lead by signing on to these policies. California's progressive policies serve as an incubator for the rest of the country, shaping the future of the EV market.
The US has historically lagged behind mainland China and Europe for electric vehicle ownership, but is this about to change? If you believe GM and Ford, who cite falling demand for the delaying of their near-term EV sales targets, the logical answer would be no. But here at BloombergNEF, we’ve been crunching the numbers and what they show is not only are US sales of battery-electric cars rising, they are poised to cross the 1 million mark this year.
On today’s show, Corey Cantor from BNEF’s EV team returns to talk with Dana. Together they discuss how the Inflation Reduction Act has supercharged the US market, whether red or blue states have the highest EV uptake, and whether Rivian can cross the ‘EV valley of death’ to scale from a startup to mass production.
Complimentary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal, on bnef.com or on the BNEF mobile app.
