Electric vehicle (EV) registrations reached 1.8 percent of the market in 2020, the highest level recorded, as more models like the Ford Mustang Mach-E are introduced, according to new analysis from IHS Markit, an information and analytics firm which operates an office in Southfield.
But numerous challenges persist before broader market adoption occurs. EV range anxiety, slow charging times, a lack of a national charging network, and a steep drop in resale values challenge the market. The batteries, once they reach their end life, also are difficult to recycle.
December 2020 represented the highest monthly share for EV new registrations, at 2.5 percent of the industry — a record monthly level since IHS Markit began tracking new vehicle registration data by fuel type. For the purposes of the analysis, EVs reflect those vehicles only powered by electricity and no other power source.
IHS Markit forecasts EV sales in 2021 will surpass 3.5 percent nationally, and continue to increase to more than 10 percent in 2025. Across the automotive spectrum, a wave of new EV products and brands all point to support EV trends in 2021 and beyond. More than 100 new EV offerings are expected between 2021 and 2025, the company reports.
“Consumer acceptance of electric vehicles is increasing, though at a modest pace, and now is at record levels,” says Tom Libby, associate director of industry analysis at HIS Markit. “We continue to see significant contrasts in EV adoption across different regions of the country, led by the two coasts.”
From a regional perspective, EV market share is highest in the Western Region, where 4.8 percent of all new vehicles registered are electric vehicles. The San Francisco DMA’s EV share of 11 percent far exceeds that of any other major DMA in the Western Region.
EV market share is 1.6 percent in the Northeast, the second highest region on this metric, and the New York City DMA’s share of 2 percent is driving the Northeast. In the Southeast, just 1.1 percent of 2020 new vehicle registrations were electric vehicles, and the Washington, D.C., DMA is leading the way at 2.5 percent during the same time period.
The Southwest Region EV share was just 0.9 percent in 2020, while Austin was the top DMA with a 2.1 percent EV market share. The Midwest region had the smallest EV market share in 2020 at just 0.8 percent. Chicago led all other Midwest DMAs with a 1.5 percent EV market share.
In addition, EV owners are returning to market for another EV at record levels as well, and this is expected to continue, according to IHS Markit. More than half of EV households that return to market acquire another EV, up substantially from prior years.
“Record high EV loyalty rates imply consumer acceptance for the entire electric vehicle concept,” Libby says.