It’s not just your perception — electric vehicles are all over the place.
Sales of EVs, and their presence on the road, have ballooned in recent years. That growth is forecast to continue as the United States, with the juiced-up tax credits from the Inflation Reduction Act, and other countries shower the sector with subsidies to incentivize more purchases.
Regulatory crackdowns on traditional internal combustion engine vehicles are also expanding in the U.S. between various federal and state rules. And automakers are getting moving on their own fleet conversions, pledging to go all-electric by this year or that.
So, just how much are EVs really growing?
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Multiple estimates put global EV sales above 10 million units sold in 2022. New sales were up by almost 56% last year compared to 2021, according to Rystad Energy.
“This increase comes largely on the back of growing EV sales in China, which accounts for almost 68% of global EVs sold,” Abhishek Murali, senior analyst at Rystad Energy, said in a recent market note.
The energy sector analytics firm estimated 14.5 million units will be sold globally this year, compared with about 2 million in 2018.
Sales in the U.S. have been consistently dwarfed by China, where more than 6 million new battery electric and plug-in hybrid electric vehicles were sold in 2022 alone. That’s double the total volume of BEVs and PHEVs sold in the U.S. in 12 years.
EV penetration in China and Europe both have outpaced the U.S. in recent years, but growth has been considerable otherwise.
Some 918,464 EVs were sold in the U.S. in 2022, close to a third of the total 3,268,828 that have been sold since 2010, per data gathered by the Department of Energy’s Argonne National Laboratory. Sales are expected to surpass 1 million vehicles in 2023.
“I think that in a lot of ways, this industry has defied most expectations,” said Alexander Laska, senior policy adviser for transportation at Third Way, a think tank. “Even with that higher upfront price tag, people understand now that they can have an EV that adapts to their lifestyle and not the other way around.”
EVs are an integral component of President Joe Biden’s policy agenda. Transportation beats out both the power and industrial sectors as the top source of greenhouse gas emissions, which Biden wants to limit sharply in the hope of slowing climate change.
Biden intends to help set the market on track so that half of all new vehicle sales are electric models in 2030. Even with the recent growth, the segment has a long way to go, making up some 5% of total new vehicle sales in 2022, up from about 3% in 2021.
The Inflation Reduction Act, Democrats’ massive green energy and healthcare spending bill, expanded subsidies for consumer purchases of EVs, which max out at $7,500 for new cars. Another credit extends the subsidy to light-duty vehicles purchased for commercial use.
The Treasury Department is still working out guidance that will determine how much flexibility automakers have to comply with strict manufacturing requirements and remain eligible for the full consumer credit.
The credit could knock models out of the running for the full subsidy, as it is designed to preference vehicles assembled in North America and those whose batteries are made with components sourced mostly from the U.S. or its free trade partners.
Other provisions of the new law, however, have opened up access for some models to the credit where it had been restricted in previous years.
The Inflation Reduction Act lifted a sales cap that had been limiting a handful of automakers’ models, including Tesla and General Motors, from being eligible for the clean vehicle credit previously. That cap was lifted on Jan. 1.
The Biden administration has also finalized tougher tailpipe emissions standards designed to facilitate EV penetration at a faster rate by requiring new models to be increasingly more fuel efficient.
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Even though average costs fell year on year, EVs are still pricier on average than traditional gas-powered vehicles, a major barrier to their expansion.
“There’s still a ways to go [on price], but we’re starting to get to the point where as battery costs decrease, the price of the EV is coming down as well,” said Laska. “It’s starting to get to a point where, particularly when you add in the tax credits, we’re going to get to a place where these are really within a lot of consumers’ reaches.”