Can Tesla, GM, Ford, & Others Deliver On Biden’s 50% EV By 2030 goal?
Headlines all over the EV, cleantech, and normie media are highlighting Biden’s new EV plan. The big question becomes: is it feasible? Let’s look at some data and numbers and do a bit of projecting.
First off, what is the White House actually promising?
“… to make half of all new vehicles sold in 2030 zero-emissions vehicles, including battery electric, plug-in hybrid electric, or fuel cell electric vehicles.”
Yeah, that’s not 50% of all vehicles being all electric, that’s 50% of all vehicles having electrified drivetrains, even if there’s a motor in there generating electricity for a PHEV.
About 14.5 million light vehicles — cars, crossovers, SUVs, and pickups — were sold in the US in 2020. The announcement is pretty skimpy on what they mean by ‘truck’, and I’m assuming that they mean light trucks, e.g. big SUVs and pickups, along with panel vans and the like. So the target is roughly half of that, call it 8 million electric light vehicles with some growth of the overall market.
In 2020, Tesla sold 235,000 electric cars in the US alone. That’s 3% of the 2030 target, and Tesla is still growing. Did you know that in July of 2020, Tesla accounted for 3.6% of all light vehicle sales in the US? The annual monthly average was obviously lower.
Other vendors sold another 27,000 pure electric cars in 2020. There were also 17,600 PHEVs sold, and 454,890 non-plug in hybrids.
235,000 + 27,000 + 17,600 + 454,890 = 734,490 electric drivetrain vehicles sold in 2020 in the US.
We’ll ignore the dead end of fuel cell vehicles as they moved less than a thousand units in 2020, understandably collapsing completely as EVs quite rightly dominate the low- to zero-emissions market. It’s remarkable to me that FCEVs even appear in the White House announcement, but politics is weird.
That’s one in 11 vehicles sold in the US in 2020 with an electric drivetrain. The biggest number last year was from hybrids — no plugs — but that market is going to collapse as more and more vendors bring pure electric and PHEV vehicles to market.
There are 19 models of pure electric vehicles for sale from 14 automotive brands for sale in the US in 2021. Sales this year are expected to be much higher than 2020 sales.
Q2 2021 sales of electric-only cars were in the range of 110,000 units, suggesting annual sales of 400,000–450,000, or around a 60% year over year increase of pure electrics.
That’s about 5% of the 2030 target by itself just from pure EVs in 2021. EV sales have been increasing by similar percentages for each of the past five years, so this is not an unusual increase.
Most of the major vendors have committed to multiple fully electric models on the market in the next couple of years, in addition to the 19 models already available. PHEVs are there too. Over the next 9 years, virtually all of the hybrid models will become PHEVs with organic improvements to the product lines and the superiority of the PHEV model.
If we wanted to say it was just pure electric cars, all they’d have to increase sales by annually is 40% per year compounding through 2030 to hit the target, less than the 2020–2021 year-over-year. If we include PHEVs and hybrids and assume PHEVs displace hybrids, then the annual growth of electrified drives trains only has to be 25% per year, well under the observed growth rate of pure electric vehicles.
Biden’s EV plan involves several chunks and comes with some fortuitous tailwinds, all of which are going to drive sales of electric cars.
The first tailwind is China. That country has been leading in electric vehicles for a decade, with 50% of all EVs sold globally sold in China and a 15% market share this year so far. As it’s been the fasting growing market for global car brands, they have all been in China partnered with local companies to deliver electric vehicles into that market. That means that the available electric car models is much higher than the US market currently sees, and that the global EV market is more than big enough to grow at the levels needed for 50% electrified drivetrains in the US by 2030.
The second tailwind is Tesla. Not only is the car a massively desirable car in the US, it also has the best network of highway-side high speed chargers and destination chargers. That’s great for Tesla, but Tesla also just announced it will open up its charging network to other vendors’ cars with a special connector and an app. That automatically makes traveling by EVs in the US vastly better.
But Biden is also going to build a nationwide network of non-Tesla charging stations, making the Tesla connector an option, and massively increasing the availability of charging when traveling.
And Biden and Harris are turning the US federal rebate into a point-of-purchase rebate — that’s the plan, anyway. That eliminates one of the key barriers to EV ownership by reducing the cost of purchase immediately, not months or a year later with a tax refund. Further, they are removing the 200,000 vehicle cap which was in the previous rebate, one that Tesla and GM had run into in the US already. The rebate will be up to $12,500 on vehicles up to $80,000 built in plants with union workers. The $80K will put a lot of Tesla’s models in the rebate range, but as Tesla is famously non-unionized, they still might not qualify for the full amounts. Tesla pays pretty well, and the majority of people working there assert that they are well compensated, but still, not unionized. It will be interesting to see that play out. For more details on the proposed changes, see this article.
Biden is also pushing the legacy US automotive vendors to catch up to Tesla, which conspicuously isn’t going to be part of the public event related to this. It’s understandable, as Tesla doesn’t really need as much help, and there are an odd bunch of Americans who don’t get that it’s a massive US success story and American car company. Avoiding triggers makes a lot of sense.
Is the 50% of light vehicles by 2030 possible? Easily. And almost inevitably.
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