Electric Vehicle Adoption Outlook Weakens

The pace of electric vehicle adoption in the United States is expected to slow significantly over the coming years as federal incentives and regulatory support are rolled back, according to new projections from BloombergNEF (BNEF).

The research firm lowered its forecast for U.S. electric vehicle penetration for the second consecutive year, now estimating that EVs will account for approximately 17% of passenger vehicle sales by 2030. The revised outlook is sharply lower than the firm’s previous forecast of 27% and well below projections published in 2024.

BNEF said the weaker U.S. outlook is also expected to influence global adoption trends. Worldwide sales of electric passenger vehicles are now projected to reach 35.6 million units annually by 2030, roughly 3.4 million fewer vehicles than forecast a year ago.

The revision reflects a changing policy environment in the United States. Recent federal actions have reduced several measures that previously supported EV adoption, including efforts to modify fuel-efficiency requirements, challenge state-level electric vehicle mandates, and phase out consumer tax incentives for EV purchases.

According to BNEF, rising trade barriers and tariffs have also increased challenges for automakers seeking to expand electric vehicle sales in the U.S. market, potentially slowing the industry’s transition toward electrification.

Automakers have already begun adjusting their strategies. The report estimates that production plans for at least 27 current or future EV models have been delayed, scaled back, or canceled over the past year. Several major manufacturers, including Ford, General Motors, Honda, and Stellantis, continue to reassess investment priorities as demand growth moderates.

Despite the more cautious outlook in North America, electric vehicle adoption continues to expand globally. Industry data cited by BNEF show that registrations of battery-electric and plug-in hybrid vehicles increased approximately 3% year-over-year in May, reaching around 1.8 million units worldwide.

Europe remained a key driver of growth during the period, while demand softened in both China and North America.

China is expected to maintain its position as the world’s largest electric vehicle market, accounting for roughly 62% of global EV sales this year. However, growth in the country is also projected to moderate as subsidy programs evolve and market penetration increases.

While electric vehicles are expected to gain market share throughout the decade, BNEF’s latest forecast suggests that policy decisions, trade dynamics, and consumer incentives will play a critical role in determining the speed of the global transition away from internal combustion engines.

Source: BloombergNEF (BNEF), reported by Seeking Alpha.