A recent report from EY reveals that the United States has climbed to third place in its readiness for an electric vehicle (EV) future. This ranking surpasses countries like the United Kingdom, Sweden, and Germany, all of whom are recognized as sustainability leaders. China and Norway claimed the top two spots, known for their friendly regulations and high demand for EVs. The US’s rise in rankings is attributed to the introduction of new EV models, increased investments in battery manufacturing, and the availability of more affordable EV options.
One significant factor contributing to the improvement of EV affordability in the US is regulation. The country’s comprehensive policy measures aimed at developing a domestic EV supply chain have boosted its position. These interventions are considered some of the most robust globally, driving significant investment activity. The US has also witnessed substantial growth in its global EV supply chain and consumer market, bringing it closer to joining the ranks of sustainability leaders.
EY’s report evaluated the top 20 vehicle markets based on various criteria, including supply, demand, and regulation, to assess their preparedness for the electric vehicle era. The US has seen positive developments in this area, thanks to government initiatives such as the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, which have allocated billions of dollars towards the expansion of EVs and EV-related technologies.
Key regulatory factors highlighted by Gaurav Batra, EY’s global advanced manufacturing and mobility analyst leader, include $7,500 purchase incentives for EVs, among the highest globally, $3 billion in competitive grants for battery facilities, as well as state grants offered to consumers who purchase EVs, providing rebates and other incentives.
Despite these advancements, China remains the global leader in EV readiness. Its control over the supply chain and battery manufacturing capabilities have contributed to its dominance. In 2022, China accounted for 74 percent of the global investment in battery manufacturing. Additionally, Chinese consumers are more willing to adopt EVs, with nearly 60 percent stating that their next vehicle would be an EV compared to 41 percent in other markets.
The US is rapidly expanding its EV battery manufacturing sector, with investments of $73 billion planned in 2022 alone. These investments are projected to increase EV battery manufacturing capacity by 20 times by 2030. Norway, renowned for having the highest EV adoption rate in the world at 81 percent, claimed the second spot in the ranking. Conversely, the UK saw a drop in its ranking due to a slowdown in investment from battery manufacturers and automakers, influenced by the growing market dominance of the US and China.
Sources: EY