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US EV market sales to rise to 6.9 million units by 2025: Frost & Sullivan

Highlights

Five-fold growth from 2020

Incentives, exemptions offered across 39 states

Over 90% of states offer EV charging incentives

London — The US electric vehicles market is expected to reach 6.9 million unit sales by 2025, up from 1.4 million unit sales forecast for 2020, due to government incentives driving EV ownership, Frost & Sullivan said Nov. 19.

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The consulting firm gave its forecast in its recent analysis report, Transitory Trends in the Electric Vehicle Ecosystem in the United States, 2025, which examined various trends in EV sales since 2010, factors contributing to growth, the current charging infrastructure, the road ahead, among other factors.

Frost & Sullivan industry manager, mobility practice, Prajyot Sathe said that over 90% of states offered incentives for setting up EV charging infrastructure, although only a few offered the usage of high-occupancy vehicle lanes.

"However, meaningful quality of life incentives and exemptions are offered across 39 states in the US, including easier payment plans for the purchase of EVs, limited-time incentives to accelerate EV adoption/conversion and lack of requirements for emission inspections across several states," Sathe said.

Sathe said Frost & Sullivan forecast that mild hybrid EVs (MHEVs) and fully hybrid EVs (FHEVs) would account for the maximum market share of 89.6% combined in the EV market by 2025, with an almost equal split between them.

"Additionally, battery electric vehicles (BEVs) will witness impressive sales, followed by plug-in hybrid electric vehicles (PHEV) sales over the forecast period," he said.

The consultancy's research determined that FHEVs were expected to remain the most popular hybrid EV (HEV) model, with these accounting for 41.7% of all EV sales in 2020 and expected to climb to 44.6% by 2025, boosted by changes in the charging infrastructure and state incentives.

The consultancy added that MHEVs, which were launched in 2018, had gained popularity in the US market, primarily due to their 48V architecture.

"OEMs should launch models on the 48V MHEV platform to gain significant market share in a competitive market," it said.

It also said that BEVs were likely to see increased demand to 2025, mainly due to EV ownership incentives, such as being exempt from state motor vehicle emissions inspections in Massachusetts and Colorado.

Frost & Sullivan found that, while PHEV sales were expected to almost double by 2025, they would be the slowest-growing EV segment and this was unlikely to change unless better incentives were offered.

It added that the majority of the US OEMs were likely to reduce PHEV models and introduce BEV models in their product lines, with over 450 models, including 300 BEVs and 150 PHEVs, available for sale in 2020.