Electric vehicles (EVs) are becoming more common throughout the U.S., with millions now cruising on roadways alongside their gas-powered counterparts. As more companies join EV giants like Tesla, competition for the burgeoning EV market share is likely to intensify. For many domestic and foreign automotive manufacturers, there’s more at stake in pursuing alternative fuels than just breaking technological ground.
We at the MarketWatch Guides team will uncover striking insights into the EV market, from competition among the most prominent stakeholders to the increasing market share. Our findings highlight the factors contributing to growing EV popularity and explore whether making the move away from gas-powered vehicles is a worthwhile investment.
Key Findings
All-electric vehicles (also known as battery electric vehicles or BEVs) are powered by an onboard battery that stores electrical energy, according to the U.S. Department of Energy’s Alternative Fuels Data Center. Unlike conventional gas-powered or hybrid vehicles, EVs rely solely on electricity for propulsion. The Environmental Protection Agency (EPA) classifies EVs as zero-emissions vehicles due to the lack of exhaust or tailpipe emissions expelled.
Rather than fueling, an EV requires its users to recharge its battery, similar to charging your smartphone, laptop or other electronic device. Current battery technology limits how far EVs can travel, especially compared to gas-powered vehicles. However, extensive research and development continue to identify methods to lengthen this range and improve efficiency to accommodate market demands.
Electric car sales have taken off in the U.S. since 2020. About 1.6 million EVs were sold in the U.S. in 2023 — a 60% increase from the 1 million sold nationwide in 2022. The U.S. accounted for 9.7% of all new EV registrations worldwide in 2022. Globally, EV sales topped 10 million for the first time in 2022. In the first quarter of 2023, over 2.3 million electric vehicles were sold worldwide, a roughly 25% year-over-year increase.
China, Europe and the U.S. represent the three most significant global EV markets. Over half of 2022 EV sales were finalized in China, although the U.S. saw a 55% increase in sales that same year. A whopping $52 billion was sunk into North American EV supply chains between August 2022 and March 2023, according to the International Energy Agency (IEA). About half of the investment went to battery manufacturing, while an equal 20% went to both battery components and EV manufacturing.
Many automakers have publicly announced their green intentions. For instance, Jaguar announced its aim for a full electric lineup by 2025. Mitsubishi joined in with goals of 50% electrification by 2030 and 100% just five years later. Some of the biggest hurdles continuing to delay or deter progress include supply chain constraints and volatility in critical mineral prices. However, according to the IEA, EVs are set to replace six million barrels of oil used daily by 2030 at the current pace.
As of October 2023, Tesla made up more than half of the U.S. EV market share. Chevrolet ranked as the second-largest EV brand in America at 5.9% market share, with Ford close behind at 5.8%.
Volkswagen, Rivian, BMW and Mercedes-Benz EV registrations are rising, though Hyundai, Kia and Nissan are struggling to gain ground in the market, according to Automotive News. Experts point to recent changes in the EV tax incentive requirements, which limit eligible vehicles based on the manufacturer’s suggested retail price (MSRP) and the country of final assembly. However, non-Tesla EV registrations rose 151% in the first few months of 2023, while Tesla saw a drop in market share from 72% to 58% early in the same year.
The average price of a new EV comes in just over $60,000. Federal and state tax incentives also influence final EV ownership costs. Some of the most popular and affordable electric vehicles include:
Due to their lower emissions and energy efficiency, EVs are generally better for the environment and have a smaller carbon footprint than their gas-powered counterparts. Because there are many misunderstandings about how EVs work and their impact on the environment, the EPA recently dispelled some common EV myths:
Fact: Producing EVs (specifically the battery) requires additional energy compared to what’s needed for a 12-volt battery. However, EVs claim zero tailpipe emissions and an overall smaller carbon footprint than their gas-powered siblings, including the electricity used during charging.
Fact: While EV manufacturing can create more carbon pollution than creating gas-powered vehicles, the overall carbon footprint of EVs is still smaller than those of gasoline cars — even accounting for the carbon pollution required during the manufacturing process.
Additionally, recycling EV batteries can reduce emissions by reusing materials and components. However, challenges remain in developing the technology necessary for efficient recycling practices.
Fact: Despite concerns of overloading the power grid, California claims charging more than 1 million EVs represents less than 1% of the grid load for the entire state, including during peak hours. Charging at night can help reduce the impact on the power grid, and it’s cheaper as well.
Fact: Over 60,000 EV charging stations serve the entire nation, and they’re becoming more accessible thanks to government initiatives and the rise in EV popularity. EVs can also be easily charged at home.
Fact: The typical person drives less than 50 miles daily on average, but most EVs exceed 200+ miles in range. However, temperature fluctuations can reduce EV range by up to 40%.
Fact: In light of the extreme power held within an EV battery, manufactured battery packs must meet specific standards, including safety features that render the electrical system harmless should a short circuit or impact occur.
California, Florida, Texas and Washington lead the charge in the number of total EV registrations. California accounts for 36% of that total, with nearly 1.2 million light-duty EV registrations in 2023 alone, a year-over-year increase of 33%. However, a stark divide exists among states adopting all-electric vehicles and those that are not.
In 2022, the states embracing the EV movement most with the highest numbers of EVs per 10,000 residents included:
| State | EV Registrations | Per 10,000 Residents |
|---|---|---|
| California | 903,600 | 232 |
| Hawaii | 19,800 | 137 |
| Washington | 104,100 | 134 |
| Oregon | 47,000 | 111 |
| Nevada | 32,900 | 104 |
| Colorado | 59,900 | 103 |
| New Jersey | 87,000 | 94 |
| Arizona | 65,800 | 89 |
| Utah | 28,000 | 83 |
In contrast, the following states lack the same momentum:
| State | EV Registrations | Per 10,000 Residents |
|---|---|---|
| Mississippi | 2,400 | 8 |
| North Dakota | 600 | 8 |
| West Virginia | 1,900 | 11 |
| Louisiana | 5,900 | 13 |
| South Dakota | 1,200 | 13 |
| Wyoming | 800 | 14 |
| Alabama | 8,700 | 17 |
| Arkansas | 5,100 | 17 |
| Kentucky | 7,600 | 17 |
As the 2024 election takes shape, EV policy plays a big role in the candidates’ respective platforms. The table below outlines the nominees’ stances.
| Trump Administration | Harris Administration | |
|---|---|---|
| Quotes suggesting stance | “Cancel the electric vehicle mandate [that makes EVs more accessible] and cut costly and burdensome [environmental] regulations.” | “The future of transportation, in our nation and around the world, is electric.”
“The auto industry is clearly moving toward electric. We need to make the shift faster and make sure it is driven by the United States.” |
| Previous sentiments and actions regarding electric vehicles | The Inflation Reduction Act, which provides electric vehicle tax credits, benefits the wealthy only
Electric vehicles increase our reliance on China for minerals and materials Invited Lordstown Motors Corporation to bring their electric pickup to the White House |
Investigated oil corporation Exxon Mobile for misleading the public about fossil fuel’s negative impact on climate change (2011 to 2017)
Prosecuted against Volkswagen in the “Dieselgate” scandal, in which the corporation was untruthful about its cars’ harmful diesel gas emissions (2016). Adoption of Green New Deal, which seeks to guide the U.S. toward 100% clean, renewable energy by 2030 Proposed the Climate Plan For the People during her presidential run in 2019 to achieve a clean economy by 2045 Introduced the Build Back Better Act as VP in 2021 to reduce electric vehicle prices and offer tax credits for used electric vehicles Introduced the Bipartisan Infrastructure Law and Electric Vehicle Charging Plan with President Biden in 2021 to create a network of 500,000 electric vehicle charging stations |
| Current campaign policies and statements regarding electric vehicles | Has hinted at ending current $7,500 in electric vehicle tax credits
Says EVS have a smaller market due to cost and limited range Condemns Environmental Protection Agency’s emissions standards, which he says are restrictive Supports EVs as an option for some people, but doesn’t think they should be the only option |
Biden/Harris Administration pledged $100 million in May 2024 to help small and medium-sized auto parts manufacturers gear up to produce electric vehicles |
| Potential supporters | Elon Musk | United Auto Workers union |
The Clean Vehicle Tax Credits embody the available EV tax credits in the U.S. The Inflation Reduction Act of 2022 extended the credit through 2032, with broader eligibility requirements to include a greater number of eligible vehicles. With these federal tax credits, EV owners can offset ownership costs at tax time.
Previous eligibility for federal EV tax incentives included limitations on how many EVs were sold and the purchased EV’s weight. Plus, only original owners were eligible. Vehicles placed into service after Aug. 17, 2022, were required to be finally assembled in North America to maintain eligibility for these tax credits.
EV tax incentive rules for 2023 through 2032 include several requirements:
Consumers can now receive tax incentives on used EVs, specifically the lesser of 30% of the sales price or $4,000. Additional eligibility requirements apply, such as income thresholds, MSRP limits and final assembly stipulations. Individual states may also offer additional EV tax incentives.
New updates regarding electric vehicle tax credits went into effect on July 5, 2024, according to the Taxpayer Advocate Service. The sellers of new electric vehicles — typically automotive dealers — have three calendar days to furnish buyers with a Clean Vehicle Seller Report, which confirms the vehicle’s eligibility for tax credits through the IRS. Those seeking to claim the used electric vehicle tax credits must purchase the car for personal use and must be the second owner, having taken ownership after August 16, 2022. Taxpayers can only claim the used electric car tax credit once within a three-year span and cannot be claimed as a dependent.
There are four categories that encompass the most common types of electric batteries, including:
Recycling these batteries requires various processes depending on the type being recycled. Smelting, direct recovery and intermediate processes can help recover various components to increase the recycling process efficiency. However, further research is required to determine the best methods for material recovery, including how battery design and standardization can positively influence recycling efforts.
Charging an EV can take anywhere from a few minutes to several hours, depending on the type of charger:
Several other factors, including charger availability and charging rates, can affect charging times. Most EV owners now use Level 1 chargers at home overnight or plug into Level 2 chargers at work. The Tesla Supercharger network incorporates DCFC chargers that are available to the public.
The cost of replacing an EV battery rivals and may even exceed the cost of transplanting a new powertrain into a gas-powered vehicle. Below are the costs to replace an EV battery in some models, according to RepairPal:
The true cost to maintain or replace an EV battery remains unknown, as most batteries are only now reaching end-of-life. Experts predict that current EV batteries will last well beyond the standard manufacturer warranty of eight years or 100,000 miles, but those theories have yet to be proven. Several factors affect an EV battery’s lifespan, including:
The lack of robust aftermarket support also drives EV battery replacement costs sky-high. Although EV owners can extend the life of these batteries by avoiding extreme temperatures, limiting the use of fast-charging stations and fully depleting the battery before charging it again, battery replacements can still cost several hundred dollars per kWh.
The steps below can help you calculate the cost of charging an EV at home:
MarketWatch Guides Tip
Note that electricity rates vary by region and fluctuate with the time of day and year you charge your EV.
Public charging stations vary widely when it comes to prices and options, but they typically cost more than charging at home. Some employers and shopping centers provide the benefit of discounted or free charging. Generally, public charging stations are Level 2 or DCFC chargers and incorporate a premium to account for installation and upkeep.
The prices you pay at public charging stations vary based on current electricity prices, the charging method, the type of EV you have, the location of the charger, the company that operates it, the time of day and time of year you’re charging, and more. Some also offer different options for charging either by minute or by kWh, which can influence what you pay.
To give you a sense of how much public charging may cost, we took a look at current pay-as-you-go rates at EVgo charging stations in cities across the U.S. All of these costs are for 100 kW chargers and include a 99-cent session fee on top of the total cost of charging.
| EVgo Charger Location | Cost per kWh |
|---|---|
| Portland, Ore. | $0.43 |
| Charlotte, N.C. | $0.45 |
| Dallas | $0.52 |
| Denver | $0.52 |
| Philadelphia | $0.52 |
| Newark, N.J. | $0.59 |
| Columbus, Ohio | $0.59 |
| Los Angeles | $0.60 |
| Phoenix | $0.65 |
Determining whether an EV is right for you and which models may best suit your lifestyle can be challenging. Consider your driving needs, budget, federal and state tax incentives, charging options and vehicle availability for starters. You may also ask yourself the following questions:
Many potential EV owners opt to lease an EV before making the purchase. Consider looking into an EV lease at a dealership near you to test available models. Car subscription services can also offer extended test drives with shorter terms than leases.
Another industry that’s seen changes along with the rise of EVs is auto insurance. The average cost of full-coverage car insurance for gas-powered vehicles is $2,681 annually, according to data gathered from Quadrant Information Services. For EVs, that cost rises to $3,520 annually for full-coverage car insurance — an increase of 31%.
What exactly contributes to higher EV car insurance premiums? The following factors may give us a clue:
Tesla launched its own car insurance company in 2019 and currently offers coverage in 12 states. Tesla’s usage-based insurance relies on computer models to determine personalized premiums based on:
While Tesla may not necessarily be reducing car insurance rates for EV owners, it joins many of the largest auto insurance carriers in forging new paths in EV insurance coverage.
Read more: Tesla Car Insurance
Consumers may ask themselves this question in light of the popularity of EVs. A thoughtful answer requires considering the advantages and disadvantages of EV ownership as they apply to your situation.
The transportation sector accounts for 70% of the nation’s petroleum consumption and 30% of total energy needs, according to the Alternative Fuels Data Center. Much of the electricity produced within the U.S. comes from nuclear energy, natural gas, coal, wind, solar and hydropower. In such a climate, EVs offer the following benefits:
The National Renewable Energy Laboratory (NREL) estimates today’s EV batteries will last between 12 to 15 years in moderate climates or eight to 12 years in climates with extreme temperature changes. Most EV manufacturers offer an eight-year, 100,000-mile warranty on electric or hybrid batteries and related components, and aftermarket vehicle service contracts and extended warranties provide similar coverage.
However, certain doubts exist about the future of electric cars and what’s holding us back:
For many, EVs have quite a bit of ground to make up in proving their worth and earning a place in the family garage. All benefits aside, cost can deter even the most eco-conscious consumers with an eye on their bottom line.
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