Illuminating Issues

America’s Cleaner Vehicle Market: Opportunities and Challenges

Fall 2024

Content First examined the cleaner vehicle market, a tiny, but emerging segment of the U.S. automobile industry. This report looks at the sector by sales, domestic production, and a few other key factors affecting future supply and demand for electric vehicles (EVs). Content First also analyzed the likely effects of major policy efforts aimed at adding more domestic capacity to the EV supply chain, especially in battery production and cleaner vehicle assembly.

Key Findings

• Cleaner vehicle sales and registrations in the United States are growing, but EVs still account for a small share of all light-duty vehicles (LDVs) on U.S. roads.
• Cleaner vehicle registrations rose more than 25% in 2023 accounting for 4.3% of total LDV registrations.
• Domestic production of cleaner vehicles has expanded, with more EVs assembled by domestic and international automakers in the United States, including Tesla, Ford, GM, BMW, Hyundai, and Toyota.
• U.S. government-directed policies such as the clean vehicle provisions of the Inflation Reduction Act have bolstered EV production and sales.
• Advantages of cleaner vehicles manufacturing include positive environmental effects and new jobs, and disadvantages include the loss of some jobs in conventional car production and fewer unionized auto plants.
• Continued growth of the cleaner vehicle market could be hampered by the upcoming presidential election if a second Trump Administration dismantles President Biden’s programs to promote EV production and sales.
• The U.S. pivot to cleaner vehicles, though strong in recent years, remains uncertain. Obstacles affecting future sales include a lack of affordable EVs, a comprehensive charging network, wary consumers, and domestic policies and politics.
• If America fails to develop an EV market, it may cede a vibrant industry to automotive competitors in China, Japan, and South Korea.