US EV market share to jump to 41% by 2030, driven by IRA, investments

TROY, Michigan (ICIS)–US sales of electric vehicles (EVs) are poised to jump to 41% by 2030, driven by incentives in the US Inflation Reduction Act (IRA) and a huge ramp-up in EV-related investments by OEMs and suppliers, the head of the Center for Automotive Research (CAR) said on Tuesday.

The US IRA provides tax credits of up to $7,500 per passenger EV for vehicles made in North America and thresholds for battery components and critical minerals sourced from North America and countries that have free trade agreements (FTAs) with the US – 50% for battery components and 40% for critical minerals starting on 18 April 2023, and rising to 60% and 50% by 2024 and higher in out years.

It also provides incentives for used and commercial EVs as well as for component and mineral suppliers.

Automotive OEMs are leading the charge with record investments in North America, with EV and EV battery investments making up 87% of the total $134bn in announced projects across the region from 2019-2023 year-to-date, said Alan Amici, president and CEO of CAR.

Amici was speaking at the Plastics in Electric & Autonomous Vehicles Conference (EAV) hosted by the Society of Plastics Engineers (SPE) in Troy, Michigan, US.

2022 was a record year for announced North America automotive investment with over $50bn in projects, according to CAR.

“As a supplier, this reduces your risk, as the OEMs are putting big dollars in EVs. The EV transition is happening – there is no turning back,” said Amici.

For tracked suppliers, from 2020-2023, there have been $82.3bn in announced investments, with 75% going towards electrification, he said.

The forecast for the US reaching 41% market share for EVs – which includes battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) – is up from 30% in pre-pandemic 2019. During the pandemic and before the IRA, the forecast came down to just 21% on greater economic uncertainty, Amici pointed out.

Today, EVs comprise just around 6.9% of auto sales, according to CAR.

In the ‘optimistic’ scenario, the US EV market share reaches 62%. This would assume additional policy incentives and the inclusion of foreign-made vehicles, he noted.

While the percentage of plastics and composites in the material composition of vehicles has been relatively flat for five years at 8.9%, there is “a terrific opportunity” in this space as plastics play a key role in the challenge of reducing weight, said Amici.

A passenger EV is typically 500-1,000kg (1,100-2,200lb) heavier than a traditional ICE (internal combustion engine) vehicle, creating a host of challenges beyond driving range – tyre composition and design, braking, crash characteristics and suspension geometry, he pointed out.

The build-out of EV charging stations is lagging, presenting another challenge for EVs. However, $7.5bn in funds will be allocated to chargers across the US, with $5bn already deployed, he noted.

“The unprecedented investment in EVs across North America through 2023 should give comfort to suppliers,” said Amici, who emphasised the ramp-up in EV sales is coming.

“OEMs are looking for innovative solutions for reducing weight and cost,” he added.

Front page picture: Charging station for EVs in Rockville, in the US state of Maryland; archive image
Source: Sachs Ron/CNP/ABACA/Shutterstock

Focus article by Joseph Chang