CCC News & Insights

June 14, 2022

Challenges Facing Electric Vehicles in America

by Chris LaffertyField ConsultantAmericans are seemingly more aware of our environmental footprint than ever before. The question facing auto manufacturers is, will Americans fully embrace Electric Vehicles (EV)?Many challenging obstacles are facing the future of EVs. They can be summed up in six key areas: customer acceptance, charging infrastructure, chip shortages, battery shortages, reliance on rare earth materials (lithium, tin, graphite, nickel, etc.), and the ability to have multiple owners.By now, almost everyone is familiar with Tesla and its all-electric fleet. Tesla makes up about 80% of the EV market. Tesla has recently adapted to the chip shortage and delivered close to its forecasted number of vehicles. Tesla delivered 310,000 vehicles in the first quarter of 2022, up approximately 68% from the same period in 2021. Interestingly GM and Honda announced they would partner together to build a $30,000 EV.Virtually all manufacturers have announced plans to continue developing EVs in the short- and long-term. GM and Honda will be sold under separate labels. lso, Maserati announced plans to offer an EV version of all their models by 2025 and a target date of 2030 for their entire fleet to be electric.This makes us wonder about the proliferation of Electric Vehicles, the challenges manufacturers face in producing them, and the future. With EVs the high cost of the battery components and other materials makes producing a profitable yet affordable vehicle a major challenge. The average price for a new EV in February, according to Edmunds, was $60,054 compared to $45,596 for a non-EV.What does the future look like? Currently, fewer than 1% of the country’s 250 million vehicles are electric. The U.S is aiming to get that number to 50% by 2030. This year, the government announced a bi-partisan $1.2 trillion infrastructure bill to help overcome the challenges outlined here. It is yet to be seen if these goals are realistic or not.Americans are tuned in and are closely following the market.