Net-zero initiatives lead to a surge in EV adoption in US

The US electric vehicles (EV) market is growing leaps and bounds with the number of EVs turning out to be nearly 7 per cent of all vehicles in 2022 from just 1.8 per cent in 2018 and a move towards net-zero emission globally has contributed greatly to this.

 

North America is the region that has the highest pollution from vehicles globally, found a recent study.

A national charging infrastructure network
will be created in the US.  

In fact, it has been found that the US has been in the slow lane when it comes to electric vehicle adoption compared to China and Europe.

 

China drove nearly 60 per cent of global EV sales and the figure was 30 per cent for Europe in the first half of this financial year.

 

Many European nations have seen skyrocketing growth in EVs and an example would be Germany, which saw growth from 3 per cent to 27 per cent from H1 in 2019 to H1 in 2022, respectively.

The US was somewhat slower in this. The reason was that deployment of fast chargers had been slow in the US than markets in Europe. And, more stringent regulation in these countries have also led to the surge in the adoption of EVs.

But the US market is slowly hotting up. Climate change measures taken recently in that country is boosting the adoption of electric cars like never before.

 

The US provides tax credit of up to $7,500 for buying new light EVs, $4,000 for used EVs and $40,000 is allowed for heavy-duty commercial EVs.

During the last few years, the US market has seen a sea change. And, there have been regulatory changes in the US, that is, new fuel economy regulations and the Inflation Reduction Act that could spur an unprecedented EV adoption.

 

Nearly 65 per cent of EVs sold this year in the US qualify for the new tax credit and this compares to just 30 per cent under the old policy.

 

And, there is the IRA Bill that is pushing up the making of EVs. It has already attracted $40 billion with 15 new battery plants or expansions by companies.

 

And, the biggest booster dose is the plan to create the National Electric Vehicle Architecture or NEVI by the Biden government.

 

This paves the way for a $5-billion funding to create a national charging network and all the states have approved this plan. So, EV adoption would definitely see an acceleration in the US.

 

It is estimated that EV adoption by 2030 could grow by 20 per cent (on conservative estimates).

 

If the right environment and infrastructure are created, it would definitely lead to higher EV adoption as car buyers are aware that it is the only road ahead because sooner or later, they will have to abandon their gasoline or diesel vehicles.

 

With these interesting changes in the US, 2023 and 2024 would be the years to watch as to how net-zero leads to a surge in EV adoption, and if the acceleration is mind blowing, the 2030 target could even reach 50 per cent.