North America Electric Vehicle Market Outlook, 2027

In North America, the adoption of electric vehicles has gained traction in several regions/countries due to increasing fuel prices. Electric vehicles act as a substitute for petrol and diesel vehicles and are powered by lithium-ion batteries that offer a hybrid charging facility. These vehicles are eco-friendly and do not cause any pollution. They do not emit harmful greenhouse gases while operating. The cost of electricity is much lower than the cost of fossil fuels. This reduces the cost of operation of electric vehicles as compared to other petrol and diesel vehicles. Thus, the rising crude oil prices and the depletion of fuel reserves are expected to drive electric vehicle demand.

According to the report titled North America Electric Vehicle Market Outlook, 2027 the market stood at around USD 32 billion in 2021, which is anticipated to grow at more than 23% CAGR for 2022-2027. Commercial e-models are more eco-friendly, quieter, and efficient than ever before, but they cannot travel as far on a single charge as those with a combustion engine. Larger batteries would be needed to deliver a greater range. Recharging buses and trucks also takes longer than refueling them, and the charging infrastructure is not yet ideal. This has made the passenger vehicle hold a marginally unstable share with a clear dominance with a higher CAGR. The yearly consumption of the vehicle varied, thus portraying an unsteady market share. However, the BEV's market share remained high throughout the period, with the PHEV segment expected to exceed USD 25 billion by the end of the forecasted period.

The USA leads the market with a larger market share in terms of value in the year 2021. A new regulation by the US government requires electric motors to make an audible noise when travelling up to 19 mph. By September 2019, manufacturers have to equip all new hybrid and electric vehicles with sirens that meet the new safety standard. Mexico’s climate legislation targets emissions cuts of 50% by 2050 (from 2000 levels) and 35% renewable energy by 2024, which is to support the market over the forecast period and propel higher market growth. Developed countries in the region, including the USA and Canada, have invested a fortune in the development of highly advanced charging infrastructure, directly resulting in the increasing demand for EVs. Currently, the USA has the highest charging plug-ins at a count of 77358, followed by Canada and Mexico with 11657 plug-ins. The demand for long-range electric vehicles has been increasing in the North American region. This is because of the unavailability of charging stations for passengers traveling on highways in remote areas. Manufacturers have focused on improving the range of their products by increasing battery capacities.

Further, Tesla pioneered the concept of EVs and is developing cost-effective but high-performance vehicles to leverage the adoption in the region. The company hopes that the initiative will spur consumer acceptance and create a network of charging stations and service centers. The high cost of ownership, coupled with a lack of adequate charging infrastructure in the region, is the major challenges that the market could face in the forecast period. Favorable government initiatives, subsidies, and tax rebate programs to promote EV adoption will drive market growth. Additionally, several advantages of electric vehicles over conventional vehicles in terms of cost will also favour market growth over the forecast period. A decline in battery pack prices is also another factor expected to create significant growth opportunities for players operating in the market. According to a research paper published by the international council on clean transportation, battery pack prices in the U.S. are expected to drop from USD 11,500 in 2018 to USD 8,000 during the forecast period.

Electric vehicles are amongst the most prominent technologies that contribute to reducing air pollution. Thus, governments across the globe have proposed tax rebate programs to promote the adoption of electric vehicles. For instance, in the U.S., under the Clean Vehicle Rebate Project (CVRP), qualified applicants would be provided a rebate from the State of California, effective for applicants received on or after April 23, 2021. After meeting the eligibility requirements, the applicants would be eligible to receive cashback on a new electric vehicle based on the type selected. The applicant will receive a cashback of USD 2,000 on the purchase of a new battery electric vehicle and USD 1,000 on the purchase of a new plug-in hybrid electric vehicle.

The market has grown as a result of increased attention toward sustainable development and greater awareness of the negative consequences of using traditional automobiles. Furthermore, local authorities from several regions are providing subsidies to encourage the sale of electric vehicles in anticipation of overall infrastructural development. Increased investments from public and private entities in electric charging infrastructure such as Tesla superchargers, Volkswagen Electrify America, and others, as well as an increase in the number of electric charging stations across the United States, are helping to build customer trust and alleviate range anxiety (range anxiety is the fear of driving an electric vehicle and running out of power without being able to find a charging station in time to recharge the battery).The government of the United States has set a net-zero greenhouse gas emission target for 2050, aligned with significant impacts and enforced rigorous standards of CO2 emission limits for motorized vehicles. This acts as a driver for the market as automobile manufacturing companies are compelled to adopt, develop, and sell electric vehicles in the future.

Electric Vehicles (EVs) are more expensive and require a larger investment than internal combustion engines (ICEs). The cost difference between an electric automobile and a comparable internal combustion engine vehicle is as much as three to four times, making EVs a less tempting option for the average customer. This large gap in EV upfront prices is due to factors such as high research and development costs involved in battery production, a fragile raw material supply chain, and insufficient economies of scale. The cost of a lithium-ion cell is predicted to drop to USD 100 per kWh by 2021, according to General Motors Company (US). Falling component prices and the use of sophisticated technologies to increase the battery capacity are just a few of the factors driving down the prices. A lower price of lithium-ion cell makes electric vehicles cheap when compared to current prices, and this makes them more affordable to customers. The reduction in the cost of production of lithium-ion batteries will create a great opportunity for the larger adoption of these vehicles in the forecast period.

Several companies are focused on ultra-high-power charging systems due to the growing need to produce new electric passenger vehicles, e-bus, and e-truck models. For instance, in 2019, Tesla, Inc. (U.S.) introduced the third generation of its superchargers, called the ultra-fast Supercharger V3, with a power output of up to 250kW. The supercharger allows for fast charging, reducing charging time by an average of approximately 50%. The growth of this market is attributed to supportive government policies and regulations, rising environmental concerns, and increasing adoption of electric mobility.

General Motors, a U.S.-based automotive company, has announced its plan to launch electric vehicles for personal use in the next few years. By 2025, the company will launch 30 EVs worldwide, and around two-thirds of them will be available in North America.

However, leading investors have planned to double their investments in autonomous vehicles that can positively impact the electric car market in the forecast period. For instance, in March 2020, Waymo, Google’s self-driving car project, raised $2.3 billion from investors such as Silver Lake, Andreessen Horowitz, and AutoNation. In November 2020, California authorized paid robotaxi services by Waymo, one of the ride-hailing services in the state. In January 2019, Magna, a Canada-based auto supplier, partnered with Waymo to build a factory for manufacturing self-driving cars in southeast Michigan. The facility produces autonomous versions of the Chrysler Pacifica Hybrid minivan and Jaguar’s I-PACE electric SUV with Level 4 autonomous driving.

Truck manufacturers, such as Daimler, Tesla, and Navistar International Corp., are racing to overcome the challenges of replacing diesel engines with batteries, as international organizations have been improving and implementing stringent exhaust emissions and fuel economy norms. As a result, governments of different states and commercial vehicle makers are planning to invest in charging infrastructure development. For instance, in May 2021, a public engagement session conducted by the Minnesota Department of Transportation focused on improving the charging station facilities that can aid the services of electric delivery and freight trucks.

The market is highly competitive with the presence of several global as well as regional players. In 2020, the market was dominated by Tesla, General Motors Company, Toyota Motor Corporation, Nissan Motor Company, and Volkswagen AG. Organic growth remains the key strategy for the overall industry, focusing on product launches to expand product offerings and meet consumer demands. For example, in September 2020, Volkswagen AG announced the launch of ID.4, a fully electric-driven SUV generating zero local emissions. The company had planned to launch the car in the compact SUV segment.

Market players also focus on joint ventures and partnerships to increase the adoption of electric vehicles. For instance, in July 2020, General Motors partnered with EVgo to accelerate widespread adoption in the U.S. The company’s planned to add over 2,700 new fast chargers to expand the public fast-charging network over the next few years.

Recent Developments

• In June 2021, Tesla announced the rollout of the first production Tesla Model S Plaid. It’s a four-door electric car with an estimated range of 390 miles. The Plaid is the top-of-the-line Model S, with 1,020 horsepower and a 0-to-60-mph time of 2 seconds. The Plaid charges faster at Tesla superchargers, has a more spacious back seat, and a better entertainment system.
• In March 2022, Tesla announced the opening of its Tesla Gigafactory in Texas. The Gigafactory Texas is located near Austin and will manufacture Tesla Cybertruck, Tesla Semi, Model 3, and Model Y for the eastern United States market. The factory is the second-largest factory in terms of size in the U.S. and the second-largest in terms of volume.
• In June 2022, Volkswagen AG announced the operation of its North American battery engineering laboratory in Chattanooga. The company invested USD 22 million in developing and constructing the new flagship facility, and its main purpose is to test EV batteries and conduct high-voltage engineering activities.
• In May 2021, South Korean automotive company Hyundai Motor Group announced plans to invest USD 7.4 billion in the U.S. by 2025. The investments are aimed at producing electric vehicles, upgrading production facilities and furthering its investment in smart mobility solutions. Hyundai's investment plan comes as the administration of US President Joe Biden prioritizes strict regulations for electric vehicles, with the goal of replacing the 650,000 vehicles in federal fleets with US-made electric vehicles.
• The Canadian government is investing in EVs and charging infrastructure to build a clean energy future to strengthen the economy, creating job opportunities and promoting support for workers in the natural resource sectors. Natural Resources Canada (NRC) will provide USD 2.3 million to the British Columbia Hydro and Power Authority in June 2021 to help decarbonizes the environment by installing 47 EV fast chargers across the province. This fund was initiated through the Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (AFIDI) of the NRC. Additionally, the Government of British Columbia is investing USD 1.2 million through the CleanBC Go Electric program towards the AFIDI initiative. These investments and initiatives are propelling the adoption of EVs in North America.

COVID-19 Impacts:

The COVID-19 pandemic severely impacted several sectors, including the automotive sector, with major manufacturers shutting down their operations completely or operating at reduced capacities following the directives issued by their respective governments. Uncertainty regarding the duration of the lockdown and supply-chain disruptions made it more difficult for players to anticipate the industry's recovery. This crisis caused structural shifts that had significant implications for the market. During COVID-19, the U.S. was hit severely, causing significant life, resource, and economic damage. The adoption of EVs fell in the first and second quarters of 2020, while a slight growth was witnessed post-second quarter. Consumer behavior has changed significantly since the pandemic. People avoid shared mobility and public transit to reduce the risk of infection, while the distance travelled is also decreased due to remote working. This negatively affected the adoption of EVs. However, leading investors have planned to double their investment in autonomous vehicles that positively impact the EV market in the forecast period.

The COVID-19 pandemic negatively impacted the North American EV market growth in 2020. Electric passenger car and light truck sales in the United States totaled over 200K units in 2020, significantly less than the units recorded in 2019, registering a year-on-year decline of more than 5%, owing primarily to the pandemic. According to the data published by Electric Mobility Canada (EMC), electric vehicle sales in Canada witnessed a decline in the second quarter of 2020, with only over 8,000 units sold between April and June. The results represent a drop of over 50% from the units sold during the same period in 2019. However, the overall sales of electric passenger cars and light trucks in Canada remained the same in 2020 compared to 2019.

Companies Mentioned:

Arrival Limited, Beijing Automobiles Industry Holding Corporative limited, Bentley Motors Limited, Blue Bird Corporation, BMW Group, BYD Company Motors, Citroen, Daimler AG, Ford Motors, General Motors, Hyundai, Irizar, Micro Mobility, NFI Group, Nikola Motor Company, Nio, Nissan Motor, PoleStar, Proterra, SAIC, Tata Motors, Tesla, Toyota Motor Corporation, Volkswagen, Workhorse Group, Yutong, Zacua, Zhejiang Geely Holding Group.

Considered In the Report

• Geography: North America
• Base year: 2021
• Historical year: 2016
• Estimated Year: 2022
• Forecasted year: 2025

Countries covered:

• USA
• Canada
• Mexico

Aspects Covered In the Report

• Market Size By Value for the time period (2016-2027F)
• Market Size By Volume for the time period (2016-2027F)
• Market Share by Vehicle Type (Passenger & Light Commercial)
• Market Share by Propulsion Type (BEV & PHEV)
• Market Share by Sales Channel (2016, 2021 & 2027F)
• Market Share by Charging Type (Normal & Fast)
• Market Share by Country

Key Points Covered in this report:

• Market Evolution through value and volume CAGRs at different verticals
• Detailed discussion on the market dynamics that influence the market and the possible opportunities
• In sights on the market leader's performance including market shares, strategies, products, financial positions, etc

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to the electric vehicle industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.