In the short term, however, there are some signs that U.S. demand for electric vehicles is slowing.
7.8 million electric vehicles were sold globally in 2022, a 68% increase from 2021, the Wall Street Journal reported, citing preliminary research from automotive research groups LMC Automotive and EV-Volumes.com. The growth has helped electric vehicles capture about 10 percent of the global market share in the auto industry for the first time, according to the Wall Street Journal.
While 10% is only a small fraction of the overall market, the industry is growing faster than some have predicted. In 2021, for instance, the International Energy Agency projected that it would take until 2030 for the Electric Vehicle industry to reach between 7% and 12% of global auto sales.
Leading the way are Europe and China, where EVs already account for 11% and 19% of total vehicle sales, respectively, the Wall Street Journal reported, citing data from LMC Automotive.
“Last year, every fourth vehicle we sold in China was a plug-in, and this year it will be every third auto,” Ralf Brandstätter, the head of Volkswagen AG’s China business, told WSJ. “We haven’t reached the tipping point yet, but we’re expecting to get there between 2025 and 2030.”
Recent forecasts assume that the Electric Vehicle market will continue to grow in the coming years.
CBInsights Auto and Mobility Trends estimated that its global market share could reach 22% by 2030. Bloomberg New Energy Finance projected the industry’s market share could reach nearly 40% by the end of the decade.
The Biden administration, which provided a $7,500 tax credit for buying electric vehicles in last year’s Inflation Reduction Act, aims to make half of U.S. auto sales electric by 2030.
Despite the forecasts, there are signs that demand for electric vehicles is slowing, especially in the United States.
“Softening demand for the global Electric Vehicle market” is also contributing to the price cuts, Simon Moores, CEO of Benchmark Mineral Intelligence, a price reporting agency for the Electric Vehicle supply chain, previously said.
Business leaders have taken notice. In a KPMG survey of more than 900 auto industry executives released late last year, the median forecast was that electric vehicles would account for 37% of the U.S. market by 2030, up from 62% in 2021. KPMG attributed the decline to production issues and affordability concerns slowing the adoption of electric vehicles.
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