A narrative has emerged lately that US demand for electric vehicles (EVs) has hit a wall. In reality, EV sales grew 50% in 2023; the problem was that the industry had forecast 70% growth. As a result, inventory piled up and a “price war” ensued that dominated headlines. OEMs have since slashed production targets and delayed product launches. To add to the general sense of pessimism, customers continue to express concerns over high costs, unpredictable residual values, frustrating charging experiences, and poor range in colder weather.
These setbacks have left many people wondering what’s in store for EVs—particularly the next generation of vehicles, which are set to hit the market as soon as the next 12 to 18 months. Will these new vehicles be able to capture demand beyond early adopters and lay the path to a market share of more than 60% for EVs by 2032, as the Biden administration is currently targeting?
By our analysis, balanced regulation, broader vehicle-segment coverage, and a lower total cost of ownership compared with gasoline-powered vehicles support a scenario in which EV market share surpasses 40% by 2030. The big question is whether US consumers still want to go along for the ride.
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