This, of course, is very good news as North America has the highest emissions from transportation globally and has been alarmingly slow off the mark in switching to electric vehicles, according to a new study from BloombergNEF.
The US has been slower than China and Europe when it comes to zero-emission electric vehicle adoption. China accounted for over half (56%) of global EV sales, while Europe accounted for 28% in the first half of this year.
Several countries in Europe have experienced explosive growth in EV market share from the first half of 2019 to the first half of 2022. For example:
Germany: 3% to 26%
UK: 2.2% to 24%
France: 2.8% to 21%
In the US, EVs accounted for about 3% of the total new vehicle market in 2021, says Reuters. EVs reached a paltry 6% of US auto sales in Q3 2022. Why has the United States lagged so far behind, you may ask? For one, the deployment of publicly available fast chargers (and EV chargers in general) has been much quicker in other countries, bolstered by stricter policies and fossil-fuel phase out mandates.
However, thanks to the Biden administration's recent climate initiatives and the updated US fuel economy standards, EV sales are now, finally, set to race to new heights. The Inflation Reduction Act, passed in August, provides very attractive tax credits of up to $7,500 for new light-duty EV purchases, $4,000 for used EVs, and $40,000 for heavy-duty commercial electric vehicle purchases.
The BloombergNEF study notes that the US EV market outlook has changed drastically over the past year: "Recent regulatory changes in the US – the Inflation Reduction Act and revised fuel economy regulations – are expected to accelerate EV uptake in the country and bring it closer to the EV ‘leaders."
On top of this, the IRA bill includes “powerful incentives” to speed up domestic battery manufacturing. The IRA bill has already attracted over $40 billion with 15 new EV battery plants or expansions.
Perhaps, more importantly, the National Electric Vehicle Infrastructure program, part of Biden’s Bipartisan Infrastructure Law, supplies $5 billion in funding to create a national EV charging network to promote EV adoption across the United States. All 50 states now have approved plans to build the network. (See The Great American Road Trip to be Fully Electrified.)
As a result of the recent US climate initiatives, Bloomberg predicts that the US EV fleet will be over 20% larger by 2030 than previously forecasted.
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