Worldwide Electric Vehicle Investments Will Grow to More Than $626 Billion By 2030 – New Report

(Washington, D.C. – September 27, 2022) Automakers and battery manufacturers worldwide will spend more than $626 billion through 2030 to develop new electric cars, passenger trucks, freight trucks and buses, according to the latest report by ERM for the Environmental Defense Fund. That’s an increase of about 20% -- more than $110 billion – from projections in the last edition of the report six months ago.

“This report shows that we are moving forward rapidly toward the zero-emitting vehicles that will protect people’s health and wallets, safeguard our climate, and create economic growth and jobs,” said Peter Zalzal, EDF Associate Vice President for Clean Air Strategies. “The findings in this report also underscore the enormous opportunity and urgency for EPA to move forward with protective and equitable standards for light, medium and heavy-duty vehicles that put our nation on a pathway toward eliminating harmful pollution from these cars and trucks.”

The September 2022 Electric Vehicle Market Update is the seventh in a series that tracks the current status and projected growth of the U.S. electric vehicle industry over the next five to ten years. The original report was released in May of 2019. While previous editions of the report focused primarily on light-duty electric vehicles (passenger cars and trucks, this version also provides an in-depth discussion of medium and heavy-duty electric vehicles (such as freight trucks, semis, buses, garbage trucks and delivery vehicles). 

The transportation sector is the largest source of climate pollution in the U.S. and is a main source of other pollutants that cause smog and damage human health. This report comes at a time when EPA is considering future “Tier 4” standards for passenger cars and trucks for model years 2027 as well as stronger standards for model year 2027 to 2029 medium and heavy-duty vehicles. The report’s findings underscore the importance of EPA moving forward swiftly with protective standards in order to slash climate and air pollution, improve the U.S. economy by creating new jobs, strengthen national security by reducing dependence on imported oil, and help families save money on fuel. 

The latest edition of the report finds momentum for electric vehicle development and production is continuing to grow at dizzying speeds both in the U.S. and globally. In the U.S. that growth will be turbocharged by several important federal and state actions, including passage of the Inflation Reduction Act and California’s approval of its Advanced Clean Cars II program. The Inflation Reduction Act, which was signed into law by President Biden in August, offers consumers up to $7,500 in tax credits for the purchase of a new clean car, up to $4,000 for a used clean car, and up to $40,000 for a new commercial vehicle, as well as billions in other grants and tax incentives to spur zero-emission vehicle manufacturing. California’s Advanced Clean Cars II standards require that all new passenger cars and trucks sold in the state will be zero-emitting by 2035 (four other states – Massachusetts, Oregon, Vermont, and Washington – have already announced plans to adopt those standards within the year).

Major automakers are also embracing electrification as evidenced by the increased number and variety of electric models offered, as well as commitments to sales targets and manufacturing investments.

The latest report finds:

• More electric cars and passenger trucks are on the road now than ever before – globally, more than 16 and a half million at the end of 2021. 
• In the first nine months of this year, over 15 automakers and EV battery manufacturers announced new or additional U.S.-based investments in clean vehicles – a combined total of $51 billion, which will lead to jobs for more than 41,000 people. Most of these investment announcements were made before the Inflation Reduction Act passed, which will catalyze even greater levels of investments in the future.
• In the U.S., 187 models of electrified cars and passenger trucks are expected to be for sale by the end of 2025 – an increase of 78 models from the expected number in the last version of the report.
• 15 of those U.S. models are available for less than $40,000 as of 2022. With the newly expanded federal incentives, 10 models will be less than $30,000.
• In the U.S., the median EPA estimated range of electric passenger cars and trucks for model year 2021 exceeded 230 miles. Some model year 2022 vehicles are offering a maximum range of more than 500 miles.
• The cost of battery packs for electric vehicles has fallen dramatically, from more than $1,000 per kilowatt-hour in 2010 to approximately $132 dollars per kilowatt-hour in 2021. Prices are expected to continue falling to as low as $61 per kilowatt-hour by 2030. That trajectory could be slowed by ongoing supply chain disruptions but could also be alleviated by provisions in the Inflation Reduction Act.
• The cost of battery packs for electric vehicles has fallen dramatically, from more than $1,000 per kilowatt-hour in 2010 to approximately $132 dollars per kilowatt-hour in 2021. Prices are expected to continue falling to as low as $61 per kilowatt-hour by 2030. The Inflation Reduction Act includes significant, reinforcing incentives to support U.S. battery manufacturing.

The newest report also finds significant growth in the electric medium and heavy-duty market:

• In 2019, there were only 20 models of Class 2b-8 zero-emission trucks available for purchase in the U.S.; now, there are more than 136 models available.
• The number of available models of zero-emitting commercial trucks and buses is expected to increase almost 26% globally from 2020 to 2023, up to 544 models.
• Roush Industries found that upfront costs for electric heavy-duty vehicles are expected to drop by as much as 44% by 2027. When considering Inflation Reduction Act funding, Roush found the purchase price of many medium and heavy-duty vehicles (including refuse trucks, shuttle buses and delivery trucks) will be the same or less than their diesel counterpart as early as 2023.

You can read the full September 2022 Electric Vehicle Market Update here. Read other recent EDF reports: Clean Cars, Clean Air, Consumer Savings here and Clean Trucks, Clean Air, American jobs.