Will EV sales in the US reach 50% by 2030? 

Many revised projections still show a path to the 50% sales threshold by 2030. Recurrent’s internal market forecast suggests that we remain on pace for that target, which includes entering the 15% “Mass Adoption Phase” by the end of 2025. 

Boston Consulting Group (BCG) maintains a projection model that is published annually. It accounts for factors like battery costs, vehicle selection and government support. The team gave Recurrent an early look at their estimate in April 2024 ahead of several large industry shifts, including revised EPA targets and updated import tariffs. We placed an asterisk on the projection from 2024 since it will likely evolve before BCG publishes their report in the fall.  

This chart plots EV adoption using the annual projections from BCG. In this chart, “EV Market Share” represents new vehicle sales for both fully electric (BEV) and plug in hybrid vehicles (PHEV). 

The International Energy Agency (IEA) also forecasts EV adoption. It revised its 2024 projections upwards from the previous year based on the strength of 2023 sales. The IEA projections for 2030 increased by 13-14%, based on BEV sales only. This forecast would put BEVs at 50% of total car sales in 2030, before accounting for plug-in hybrid sales.  

Where are we today in 2024?

  • Battery costs have hit a new low and are projected to drop 40% from 2022 to 2025.
  • Vehicle selection is increasing each year with lots of new models on the horizon: BMW Neue Klasse, GMC Sierra EV, Hyundai Ioniq 7, Nissan Maxima EV, Rivian R2 series, and the VW ID.Buzz, to name only a few.
  • Governmental programs are working, including at the state level. At least 17 states have committed to aggressive zero-emissions timelines that surpass federal targets.
  • Used EV market is getting more affordable with nearly 60% of vehicle listings are priced under $30,000. 

Should we expect more plug-in hybrids? (PHEVs)

One of the biggest transportation headlines this year was the updated EPA target, which adjusted the nation’s timeline for lower emission fleets. Rather than EVs making up 67% of the 2032 national fleet, the target now allows for EVs to make up 30% to 56% of light vehicle sales from 2030-2032 model years. 

The EPA target is technology agnostic, and an OEM can use other low emission technologies to hit it. Nonetheless, incorporating electrification into an OEM’s mix of vehicles is the easiest and most market-ready solution. 

It is expected that PHEVs, which are first powered by a smaller battery before switching to a traditional gas engine, will comprise an increasingly large share of OEM vehicles. 

Why do carmakers like PHEVs?

  • PHEVs qualify for federal tax credits, meaning the PHEV version of a car is often the least expensive option for a shopper.
  • PHEVs present an EV entry point for range-anxious drivers, who are not limited to a single battery or recharging.
  • PHEVs use existing manufacturing facilities and supply chains, letting OEMs play to their strengths and use the plants they have already invested in. 
  • Less battery material is required for a PHEV than a BEV, meaning that more cars can be made with fewer critical minerals, and at a lower cost.

With this in mind, we think it's possible that BCG revises their 2030 projections to include PHEVs at 8% total vehicle sales, rather than the 5% they are currently forecasting. 

What are EV doubters saying?

EV doubters got plenty to bolster their arguments in Q1 2024 when Tesla sales dropped 16% YoY. However, overall EV sales were up 2.7% YoY, with major sales increases for other brands. 

  • Ford’s Mach E increased 77%
  • BMW’s lineup increased 63%
  • Hyundai’s lineup increased 100%

These strong numbers continued into Q2, with Hyundai’s all-electric sales jumping 42% in May, and the Ioniq 5 having its best sales month ever. Kia had the best month for EVs ever, with a 127% increase year-over-year, and Ford EV sales increased 64.7%. Tesla sales also bounced back in Q2.

What’s Next?

Our team’s Liz Najman explores the used vehicle trends in the EV Market Report. We will also update this article in the fall when BCG publishes their latest projections.