How Many Electric Cars Are on the Road in the United States?

Experts predict explosive growth in the near future.

Nissan Leaf charging in a parking garage.

Drew Angerer / Getty Images

Electric vehicles represent less than 1% of vehicles on American roads today. However, their numbers are increasing. Within the next decade, EVs may dominate the American car market.

How Many EVs Are On the Road Today?

At the end of 2021, just over 10 million vehicles on the road worldwide were battery electric vehicles. While overall vehicle sales declined worldwide by 16% in 2020, the number of electric vehicles registered globally increased by 30%, with over 2 million vehicles sold.

EV Growth and Adoption

Electric vehicles are a relatively new technology, but their growth curve in America has already been tremendous. Since 2010, annual sales of EVs in the United States have grown over 19,000%, from only 1,191 vehicles sold in 2010 to 231,088 in 2020.

Electric Vehicle Sales in Select Markets, 2010-2020

David Kuchta / Treehugger

Disruptive technologies, like electric vehicles, typically follow an S Curve of growth and adoption. As the graph illustrates, unlike other parts of the world, the United States has yet to reach this explosive stage. This suggests that the American EV market is poised for rapid expansion.

As new technologies go, the electric vehicle is still in its early adopter stage, even though its market share is improved. While the U.S. new car sales grew by 36% between January and April 2021, EV car sales in the U.S. increased by 95%.

EV Brands in the US

The U.S. EV market is dominated by a single player: Tesla. In 2020, Tesla sold more electric vehicles in the United States than all other manufacturers combined. Their sales accounted for nearly 79% of all new EVs registered in the United States. However, their market share may decline due to cost. Teslas are expensive, and the $7,500 federal tax credit for Tesla vehicles ended in December 2019. Other brands, that haven't yet sold 200,000 vehicles, still offer federal credits to buyers.

A row of Tesla charging stations.

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Buyers' options for electric vehicles are expanding, with 25 new models from 2021 now on the market. Legacy automotive companies like Ford, Volkswagen, and GM have committed to increase the development of EVs or even stop the production of gas-powered vehicles. General Motors intends to stop making gas-powered vehicles by 2035. Volkswagen has a goal of producing 1.5 million electric vehicles by 2025. Volvo aims to have half of its global production volume be electric by 2025. Ford intends to sell only electric cars (in Europe) by 2030.

Many of these pledges are aspirational, and some are limited by region or vehicle type. But the market trend towards EVs is clear, and options will improve as more players offer EV models.

Which State Has the Most EVs?

California accounted for 41% of all U.S. EV sales in 2020. With an expanding market, EV sales in California constituted 8% of all new vehicle sales.

This growth is partially based on incentives. California's EV incentives are the highest in the country, higher even than those of the federal government, with a $1,500 upfront discount through its Clean Fuel Reward program, and up to $7,000 from the Clean Vehicle Rebate Project. Additionally, the state's electricity utilities also offer incentives. It is possible to buy a Tesla Model 3 in California for $25,000, making the vehicle cost-competitive with gas-powered vehicles.

Why Are EV Sales Slower in the US?

While buyer education and charging infrastructure obstruct EV adoption, car dealerships represent a key obstacle to EV sales. This is, in part, due to EV superiority.

Electric vehicles are cheaper to maintain than traditional gas-powered cars. However, maintenance and parts represent more annual profits for dealers than new car sales. This de-incentivizes dealers from selling EVs.

Despite statements from the National Automobile Dealers Association saying that dealers are “all in” on electric vehicles, to date they have dragged their feet in promoting electric vehicles and upheld legal roadblocks to EV sales.

In many states, long-standing laws prevent auto manufacturers from selling vehicles directly to customers, which would require EV startups to establish expensive dealerships in every state—a barrier to entry into the market.

Only 22 states allow direct sales, while 11 others make an exception for Tesla, which had to negotiate with these states individually. In states with laws prohibiting direct sales, dealers have fought hard to keep them on the books.

Beyond Electric Cars: The Future for Net-Zero Transportation

The anomalous success of Tesla and of EVs in California are hopeful signs for the EV market in the United States, since they demonstrate that superior technology sells and that government incentives work. Still, the road is a long one to a world of net-zero transportation.

BloombergNEF predicts that by 2025 EV sales worldwide will more than quadruple, from 3.1 million in 2020 to 14 million in 2025. By 2040, EVs will represent over 60% of all new car sales worldwide, including nearly 75% of new car sales in the United States.

In order to support EVs in the United States, transportation infrastructure will need to adapt. From electric vehicle charging networks to increased federal incentives, the future looks promising, even inevitable. But the question remains on how quickly the United States makes the transition.

View Article Sources
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