Electric vehicle adoption in the United States is happening faster than expected

The adoption of electric vehicles in the United States is happening much faster than expected, according to a research observation from Recurrent Auto that focuses on transparency and trust in used electric vehicle transactions. The research directly contradicts and disputes a statement by Jack Hollis, executive vice president of sales at Toyota Motor North America.

According to Hollis, consumer demand is not sufficient for the mass adoption of battery electric vehicles to grow as quickly as everyone would like. He added that battery electric vehicles are too expensive and the infrastructure is not ready to charge batteries away from home.

“I don’t think the market is ready. I don’t think the infrastructure is ready. And even if you were willing to buy one, and if you could afford it… they’re still too high,” Hollis said.

Recurring Auto: Electric Vehicle Adoption Is Happening Faster Than Expected

In an interview with Teslarati, Recurring CEO Scott Case shared an observation from a Boston Consulting Group (BCG) study that published a market projection for EV adoption every year since 2018.

Scott told me that Recurrent noticed that BCG had repeated the same scan four times since 2018 and got it wrong each time.

“What we’ve seen every time they’ve done that is they just missed their forecast and went too low every time.”

He said what was really interesting was that they saw the BCG forecast and noticed that despite all the data and all the models, they had “systematically underestimated the rate at which vehicle adoption electricity was going to happen”.

Credit: Auto Recurring

The chart above shows how BCG’s EV sales projection for 2030 has changed each time it releases a report. According to BCG, projections for EV sales in the United States for 2030 have continued to grow to reach:

  • 21% in the 2018 report
  • 26% in the 2020 report
  • 42% in the 2021 report
  • 53% in the 2022 report

What Scott and the Recurrent team found odd was that in four years, projections for EV sales in the United States for 2030 have more than doubled, from about 21% to 53%.

Scott pointed out that BCG isn’t the only company that has consistently missed the speed at which the auto market is changing.

“Market adoption is happening faster than at any time in the past. It’s not about when we’ll get to finish it, or what the numbers are already. That’s what predict the best experts in the industry as to how quickly this will happen.

“We still have eight years between now and 2030. How many more times is this going to be predicted? Eventually they will succeed because we be in 2030 and we will know exactly how many cars sold are electric vehicles versus combustion engines. But there is clearly only one direction in which these adoption predictions are going.

3 major factors

Scott reviewed the three main factors used by BCG in their model.

“First of all, what are the projections for battery prices? It is a significant part of the cost of electric vehicles. Second, what the vehicle selection looks like and how many automakers are adopting different models. And the third is government policy changes. When you think about these three factors and over the 2018-2022 models, you can sort of understand what has changed.

Scott added that there was a 97% reduction in lithium-ion battery prices over the past three decades to 2018.

“Since 2018, the cost decline has stabilized, and even in the last year it has increased somewhat due to supply chain challenges and global issues. That’s not what’s happening. in this model. Changes in battery prices are not driving this forecast.

“I think what you see over that four-year period is the second factor. It’s vehicle selection and it translates to the number of automakers adopting and adding vehicles to their fleet. It depends on how automakers understand what consumers want to buy. I would say this is a true reflection of market demand and not government policy, whether it is a ban or a tax credit.

Scott pointed out that next year the Tesla Model Y will be the best-selling vehicle in the world without the help of any tax credits.

“You know what car that knocks down? It’s the Toyota Camry.

One thing the BCG forecast for 2022 did not include was the impacts of the Inflation Reduction Act that was signed into law last month. Something else not reflected in the 2022 forecast was California’s proposed ban on gasoline vehicle sales in 2034.

“California just passed a total ban on new ICE sales in 2035. The state of Washington where I live has – it’s not binding, but it’s a 2030 limit. I’m not I’m sure either of those will actually be needed, because I think the market is going to take care of the transition long before those sales projections materialize.

“The last run of the BCG estimate was in the spring. They ran the model in the spring and released it in June. By then the Inflation Reduction Act was dead. Everything the world thought the electric vehicle tax credit was dead and done that doesn’t even reflect the impact of that I would expect the next time this model runs in 2023 you have the impact of the electric vehicle tax credit, which is for ten years, and the ban on gasoline cars in California for 2035.”

He also said the bans are unlikely to be needed because of how quickly the market is shifting to electric vehicles before they take effect. The forecast will likely be even higher once it takes into account tax credits and changing government policies.

“There is room to grow here.”

Note: Johnna is a shareholder of Tesla and supports its mission.

Your comments are important. If you have any comments, concerns, or see a typo, you can email me at johnna@teslarati.com. You can also reach me on Twitter @JohnnaCrider1

Electric vehicle adoption in the United States is happening faster than expected

Electric vehicle adoption in the United States is happening faster than expected

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