Report

United States electric vehicle market is anticipated to witness a CAGR of 15.38% during the forecast period 2024-2031, rising from USD 191.44 billion in 2023 to USD 601.28 billion in 2031. The market has witnessed significant growth in recent years and is expected to maintain a strong pace of expansion in the forecast years, owing to an increase in the production of electric vehicles, a rise in per capita income, increasing awareness among consumers concerning sustainable environment, presence of giant market players, and favorable policies of the government. In 2023, in the United States, the total number of electric car registrations were 1.4 million, increasing by more than 40% as compared to 2022. Advancements in electric vehicle technology, enhancing the longevity of batteries, innovations in electric vehicle components, and investment by government and public entities in charging infrastructure are propelling the United States electric vehicle market demand. For instance, in January 2024, the U.S. Department of Energy (DOE) announced an investment of over USD 131 million for projected advanced research and development in electric vehicle batteries and charging systems, and funding for a group to meet essential priorities for the coming stage of widescale EV commercialization.
Moreover, the shift to electric vehicles is fundamental to emission reduction objectives in the United States, driving the United States electric vehicle market growth in the forecast period. The government in the country has efficiently identified the growth potential of the EV market trend and, thereby, has taken various initiatives to fascinate key OEMs to produce electric vehicles. Key companies in the United States electric vehicle market are significantly investing in advancing features of EVs and launching new products to address the rising demand for electric cars. Furthermore, key participants dropped their model prices to tackle market challenges and expand their consumer base.
For instance, in April 2024, Tesla, Inc. cuts prices in the United States for 3 of its electric vehicle models to face market challenges and sell its most popular model in the United States.
Establishment of EV Charging Stations to Drive Market Growth
The United States government is investing significantly in setting up EV charging stations and spreading awareness concerning a sustainable environment, driving the United States electric vehicle market growth. For instance, in March 2024, the U.S. General Services Administration announced USD 25 million for electrical vehicle supply equipment or EV charging ports as part of President Biden's investing in American agenda. In addition, an initial spend of more than USD 20 million through the Inflation Reduction Act will support 32 projected in 21 states at 33 federal buildings for 782 ports to help construct a reliable and convenient EV charging network for the federal government's EV fleet. In addition, the government is funding programs to advance EV chargers, cut battery costs, and others to fill gaps in the national network.
For instance, in January 2024, the US Departments of Transportation and Energy announced an investment of USD 325 million in three programs to increase the resilience and reliability of publicly accessible chargers, improve EV technologies, and assist workforce development for EV charging maintenance and deployment.
Advancement in Battery Technology Drive the United States Electric Vehicle Market Demand
Key participants in the market are efficiently enhancing the performance and durability of battery technology, accelerating the range of electric vehicles significantly. In the electric vehicle market, there is a range of batteries including solid-state batteries, lithium-ion batteries, and others. Whereas lithium-ion batteries have a significant advancement in technology that offers safe drive with great thermal stability and are one of the most sought-after technologies for their energy density and use case. Manufacturers of lithium-ion batteries are investing in advancing the performance of electric vehicle batteries, developing sustainable batteries to address the rising demand for the safety and reliability of lithium-ion batteries and growing environmental concerns.
For instance, in November 2023, Toyota Motor Corporation announced an investment of USD 14 billion to be one of the largest-ever investments in U.S. EV battery capacity and ramping EV and battery capacity across the country.
Government Rules and Regulations Accelerate Market Growth
The United States government is taking corrective actions to tackle the challenge of carbon emissions due to vehicle pollution. The government is offering different subsidies and incentives to encourage the adoption of electric vehicles coupled with making investments in zero-emission vehicles. In addition, the United States government is planning to invest in electric vehicle components and batteries to promote the production of electric vehicles and an increase in the adoption of electric vehicles. The government announced new commitments to expand its EV charging networks by establishing public charging ports and investments to accomplish EV charging goals. Legal authorities in the United States announced funds for research, development, and technology integration projected for zero-emission vehicles and mobility, and an improved battery research and development consortium.
For instance, in March 2024, the Biden-Harris Administration opened applications for USD 1.3 billion in funding to continue expanding the national electric vehicle charging network across the urban and rural communities coupled with designated interstates, highways, and major roadways.
Passenger Vehicles Dominate the Largest United States Electric Vehicle Market Share
Passenger vehicles dominate the largest market share in the United States market due to the increase in production of passenger vehicles, rise in per capita income, favoring government policies, and rapid technological advancement in passenger vehicles. Technological advancement and strong consumer adoption of electric passenger vehicles are driving the United States passenger vehicles market growth. Government policies and regulations offer subsidies and incentives for the purchase of electric cars, driving the United States electric vehicle market demand in the forecast period. Manufacturers of passenger vehicles are investing in advancing technologies and launching new vehicles to address the growing demand for electric vehicles and expand their footprint.
For instance, in March 2022, Ford Motor Company announced an increase in global investment in electric vehicles to USD 50 billion, landing it first in the United States and fourth among all automakers across the globe.
Battery is Expected to Hold the Largest Share in the United States Market
In the market, there are different varieties of batteries available to enhance the performance of electric vehicles and reduce carbon emissions. The advancement in battery technology and the development of batteries is one of the leading driving factors in the electric vehicle market. Key participants in the market are improving the performance of batteries by adopting sustainable practices in manufacturing and integrating effective components to contribute towards zero-emission vehicles. In addition, batteries promise to change the United States electric vehicle market into an attainable objective of eco-friendly transport with a reduced carbon emission or footprint. In addition, key companies are making heavy investments in battery technology to advance the performance of vehicles and reduce their carbon footprint.
For instance, in February 2024, Addionics Ltd announced an investment of USD 400 million in its United States manufacturing facilities as part of a multi-year roadmap to support the production of the EV batteries and address the rising demand for high-performance EV batteries.
Future Market Scenario (2024 - 2031F)
- Integration of advanced features and lightweight components in electric vehicles, drive the United States electric vehicle market growth.
- Rising awareness concerning carbon emissions and increase in per capita income are surging the adoption rate of electric vehicles.
- Surge in the production of electric vehicles, and supportive government policies are projected to propel the United States electric vehicle market growth.
- Expansion of EV charging infrastructure and investment in advancing features of electric vehicles are accelerating the United States electric vehicle market share.
Key Players Landscape and Outlook
Companies in the United States electric vehicle market are significantly planning to launch new electric cars to address the rising demand for electric vehicles and contribute to zero carbon emissions. Key participants in the United States market are effectively investing in different research and development activities to advance the performance and compatibility of electric vehicles. In addition, key participants in the market are adopting different strategies including partnerships, new product launches, collaborations, joint ventures, mergers and acquisitions, and others to expand their market presence and dominance in the United States electric vehicle market.
In May 2023, Fisker, Inc., a US-based EV maker announced partnership options with other companies to scale up their market share.