A few years ago, it seemed like things were going in the right direction for electric cars in America. Car companies were investing billions of dollars in electric vehicle technology, and tax credits were helping to drive sales. However, with the change in administration and the withdrawal of federal regulatory support for electrification, the outlook for electric vehicles in the US has become less optimistic.
A new report from BloombergNEF on the future of the global electric car industry highlights the damage caused by the policy whiplash. The report states that the full withdrawal of federal regulatory support for electrification in the US is the biggest factor contributing to the reduced outlook for electric vehicle adoption.
View Price on AmazonIn 2024, BloombergNEF projected that by 2030, 47.5% of cars sold in the US would be either fully electric or plug-in hybrid. However, this forecast was slashed in 2025 and again this year. Now, the company expects that around 17% of US car sales will have a plug by the end of the decade. The US EV market is expected to shift into reverse in the short term, with the plug-in share of sales landing at 8.4% and 9% in 2026 and 2027, respectively.
The lack of regulation is a significant factor contributing to the gloomier outlook. In the US, much of the electric vehicle growth has been driven by government policies, and many of these have been severely hobbled or vaporized over the last year and a half. Congress gutted existing fuel economy rules and sunsetted the $7,500 EV tax credit several years early.
Another significant driver of this year's downgrade is the climate policy known as the California waiver. Last year, the Senate ripped up the state's ability to set its own emissions rules that are stricter than the EPA's. One such rule would have required auto companies to increase their plug-in sales until they hit 100% of the market in 2035. Now, that's off the books, although California and many other states that adopted the state's playbook are challenging the decision in court.
Car companies are also backtracking on their electric vehicle plans due to the lack of regulations and lower EV demand without the tax credit. Several electric models have been canceled, including the Volkswagen ID.4, Nissan Ariya, Hyundai Ioniq 6, Volvo EX30, and Ford F-150 Lightning. Stellantis pulled all of its plug-in hybrids, like electrified versions of the Jeep Wrangler and Chrysler Pacifica minivan. Honda's "0-Series" sedan and SUV are among the many planned EVs that have been delayed or scrapped entirely.
Source: insideevs.com
