More Than Half of US Car Sales Will Be Electric by 2030

The $374 billion in new climate spending enacted by President Joe Biden will help make electric cars a majority of passenger cars sold in the US by the year 2030.

The point-of-sale tax credit of up to $7,500 is likely to boost the pace of adoption, according to the report. With the climate-spending measure in place, the estimates for EV sales in the US have been revised upwards.

Half of all cars sold in the US by the end of the decade will be battery-electric, plug-in hybrid or fuel cell powered, according to a new projection.

In 2021, electric vehicles accounted for less than 5% of sales in the US, below the global rate of nearly 9% and well below the adoption rate in countries like China. The US will surpass the global average in 2026 under the revised forecast.

According to the report, the three automakers with the most domestic battery production coming online in the near term are going to benefit most from the new law. The IRA restricts the full $7,500 credit to vehicles assembled in North America with additional phased-in thresholds for manufacturing batteries in North America.

The analysts noted in the new report that the requirements will take time to adjust to. The shift that could bring more electric cars into an affordable price range is expected to happen.

In the next year or so, there shouldn't be a big difference in sales of electric cars. The battery production tax credit is expected to drive a decline in electric vehicle costs later in the decade.

Kyle Stock assisted with the task.