EV sales are rapidly accelerating, which could bring on an epochal shift in the auto industry over the next decade, according to a new report from the Environmental Defense Fund.
The Electric Vehicle Market Update, the fifth in a series of reports tracking EV growth, notes that the electric vehicle sector has especially gained momentum in the past year, despite supply chain issues that have affected the entire auto industry, as well as materials concerns. According to the report, global and United States EV sales were up 40% and 4% year over year, respectively.
2022 Mercedes-Benz EQS production at plant in Sindelfingen, Germany
That momentum will continue, the report predicts, noting that the National Academies of Sciences, Engineering, and Medicine have declared that “the period from 2025-2035 could bring the most fundamental transformation in the 100-plus year history of the automobile.”
That transformation will be driven by falling battery costs, allowing EVs to achieve price parity with internal-combustion cars and achieve market dominance by 2035, according to the report.
Automakers will spend more than $515 billion through 2025 developing new electric passenger vehicles and battery manufacturing infrastructure, it forecasts.
That includes $75 billion 13 companies plan to spend in the U.S. on battery plants in six states, the report said. That will likely require a jump start of work on the American supply chain; the Biden administration, for instance, recently announced that it will use the Defense Production Act to support EV battery production.
2022 GMC Hummer EV pre-production at Factory Zero plant in Detroit, Michigan
By 2025, more than 100 EV models will be available in the U.S., spanning many different market segments, according to the report.
Last year’s EV sales figures were impressive indeed. Global sales tripled from 2019, and U.S. sales set records. Tesla also delivered a record number of EVs in the first quarter of 2022 despite continuing supply chain issues.
But not all analyses are as optimistic about continued EV sales growth. Swiss tech firm ABB, which sells equipment used in battery plants, has argued that there won’t be enough battery factories to support EVs’ predicted rise past internal combustion in the 2030s. Other analyses have pointed out that high raw-materials prices could put off anticipated decreases in battery costs for time being.