Bloomberg New Energy Finance (NEF) has published a report which claims that every second car sold in the US will be an electric car by 2030. In its previous publication, Bloomberg NEF had forecasted EV sales to be around 43 percent of the total passenger cars sold in the US by 2030. However after the Inflation Reduction Act was passed in August by the Biden administration, the estimate has been revised to 52 percent of the US market in the latest publication.
Corey Cantor, electric car analyst at Bloomberg NEF said:“In the next year or so, there shouldn’t be too much of a difference [in sales of EV v/s ICE]. 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.”
Bloomberg NEF credits the consumer incentives being offered under the Inflation Reduction Act for the accelerated adoption of EVs in the US. Presently in the US market, the price difference between an EV and its gas-powered counterpart is huge so the federal EV tax credits of $7,500 being given on a new EV purchase makes it somewhat a better deal. Another important thing to consider is that as the technology will mature with time the battery prices will come down and charging time will also shorten. Hence the overall price of the vehicle will come down and the experience of owning an EV will become more convenient. Which will eventually make it more competitive against gas-powered vehicles.
After the enaction of the Inflation Reduction Act, many automakers had declared to start producing their cars in the US to qualify for the federal EV tax credits. So manufacturing the cars locally will also allow the automakers to offer the cars at a comparatively affordable price. President Biden has also taken some initiatives to improve the EV charging infrastructure in the country, very recently at the Detroit Auto Show, a funding of $900 million was announced to build EV charging stations in 35 states across the US. A good EV charging network will eliminate the factor of range anxiety from the mind of owners and potential new EV buyers.
Last year President Joe Biden set an ambitious target that in the US by the end of the decade, half of the cars to be sold will be either battery-electric or plug-in hybrid electric or hydrogen fuel cell powered. And the latest report of Bloomberg NEF also points in the same direction that by 2030 every second car sold in the US will be electric. That means President Biden had hit a bullseye and the US market is all set to achieve the target.
The sales volume of electric vehicles in 2021 was even less than 5% in the US which is far below the global average volume of nearly 9%. Bloomberg NEF in its revised projection has said that instead of 2028, the US will now surpass the global average in 2026 itself. The biggest roadblock in the adoption of electric vehicles is affordability and charging infrastructure. On the other hand, the administration is making big developments to overcome the challenges therefore the EV sales volume will surely improve gradually.