United States Now Second Largest EV Market After China

Tesla Model Y vehicles sit on the lot for sale at a Tesla car dealership in Austin, Texas on May 31, 2023. Tesla's Model Y was the world's best-selling car in the first quarter of 2023. Brandon Bell/Getty Images

The United States is now the second-largest electric vehicle market behind China after years of falling behind Europe in terms of use.

Americans had been slower than other advanced nations to accept electrified transport, but the EV market has gained momentum due to political pressure and government subsidies.

Every state now has plans to construct a network of EV charging stations with funding from the Biden administration’s Infrastructure Investment and Jobs Act (IIJA).

The U.S. auto industry is also investing millions to build new EV manufacturing plants alongside battery production and EV component processing infrastructure, which was spurred by financial incentives from Inflation Reduction Act (IRA).

EV Sales Jump

Counterpoint reported that U.S. EV sales jumped 79 percent year-over-year in the first quarter of 2023, according to the latest research from Counterpoint’s USA Passenger Electric Vehicle Model Sales Tracker.

This led to Americans surpassing Germany as the world’s second-largest buyer of electric cars.

The surge in sales was caused by the introduction of EV tax credits of up to $7,500, which has encouraged the domestic car industry to embrace battery-operated cars.

EVs saw huge gains in the last quarter, while combustion engine car sales remained flat, according to Counterpoint.

Tesla cars recharge at a Tesla Supercharger station in San Francisco, Calif., on Feb. 15, 2023. Justin Sullivan/Getty Images

Tesla, the world leader in EV design, controlled 62.7 percent of the market in the quarter, with the Model Y and Model 3 being the top-selling cars.

General Motors was a distant second, with the Bolt EUV and regular Bolt making up 7.6 percent of sales.

Volkswagen had 6.3 percent share of the market thanks to sales of its ID.4 electric-powered SUV.

At the same time, plug-in hybrids, like Stellantis Jeep’s PHEV Wrangler, Grand Cherokee models, and the Chrysler Pacifica minivan, hold 43.9 percent of that market.

BMW was the next largest seller of hybrid cars at 16.1 percent with the X5, with Toyota’s RAV4 at 15.4 percent.

The Biden administration’s rules culled the list of EVs that qualify for tax credits, mainly benefiting domestic over foreign-built models.

Increasing domestic production of some EVs, such as Volkswagen ID.4 and the production of Hyundai models in Georgia, should expand the range of cars eligible for tax credits, reported Counterpoint, which is optimistic about American EV sales going forward.

Workers assemble Chevy Bolt EV cars at the General Motors assembly plant in Orion Township, Mich., on Nov. 4, 2016. Joe White/Reuters

Electric Push

Biden’s Environmental Protection Agency (EPA) has proposed new vehicle emission standards for nearly all vehicle classes in order to gradually eliminate combustion engine vehicles and impose a long-term transformation of the market that will affect millions of Americans nationwide.

The EPA wants 67 percent of all light and medium vehicle sales in 2032 to be EVs, despite the cheaper cost and wider popularity of gas and diesel-powered transport.

Meanwhile, Democrat-run states like California and New York will require that all new passenger car sales be electric by 2035.

Those two states cover about 20 percent of the current U.S. population.

American automotive giant General Motors, like the White House, said it was also committed to an “all-electric future” by 2030 when it plans to abandon its traditional base of vehicles for EVs in the United States, reported CNBC.

The move is part of its plan to become carbon neutral by 2040, using “science-based targets” for its efforts, according to Engadget.