Despite potential policy shifts from the current administration, electric vehicles (EVs) are poised to become a significant part of the nation’s automotive landscape, according to industry experts and researchers.
“There’s not an automaker out there that I have spoken with, or a supplier out there, who said that electrification in some form or fashion isn’t going to be part of the future,” asserted Todd Cassidy, a managing director at Brown Gibbons Lang & Company, an investment firm focused on the automotive market. “It’s just how soon it’s part of the future and how big of a part of the future it’s going to be.”
The previous administration, under President Biden, implemented policies to encourage EV adoption, allocating billions through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. These funds aimed to incentivize consumer purchases, expand charging infrastructure, support government EV purchases, and boost manufacturing and supply chain programs. A non-binding goal to have half of all new vehicles be electric by 2030, was also set to help reduce the U.S.’ carbon emissions.
However, one of the first actions of the current administration was to sign an executive order repealing what was termed an “electric vehicle mandate” by the previous administration, a move that instead promoted “consumer choice.” The order also seeks to eliminate subsidies and some state emissions waivers, such as California’s.
Further, the current administration paused a $3 billion project to expand the network of electric vehicle charging stations. These actions echo similar steps taken earlier, which involved rolling back emissions standards previously set by President Obama.
Cassidy noted that while the current administration’s policies will influence the EV industry’s development, the auto industry has a long “gestation period.” Projects can take years to move from the planning stages to the consumer market, so companies already invested in electric vehicles won’t easily change course, he explained. Automakers are also strongly incentivized to compete in the global EV production market regardless of federal support.
EV Growth in the US
Jim Rampton, a lecturer at the University of Michigan’s School of Information, described the three primary vehicle types currently on the roads. Internal combustion engine (ICE) cars, powered by gasoline or other petroleum-based fuels, make up the majority. Electric vehicles use rechargeable batteries, while hybrid cars use both battery power and combustion engines.
By mid-2024, hybrid and battery-powered vehicles accounted for 19% of new vehicle sales, and electric-only vehicles comprised 7% of the total, according to the U.S. Energy Information Administration. EVs had a much larger share of the luxury vehicle market, with 33% of sales. In the summer of 2024, the average price of a battery-powered electric vehicle sat at $56,371.
Alan Taub, a professor of mechanical engineering and director of the Electric Vehicle Center at the University of Michigan, explained that auto manufacturers have been pursuing wider adoption of electric vehicles for decades, despite the recent rise in commercial popularity. EVs were considered as early as the 1900s, but existing battery and motor technology at the time did not offer the long-haul capabilities of ICE vehicles.
The introduction and production of rechargeable lithium-ion batteries in the 1990s made practical EV production possible. Taub stated that research and development from major auto manufacturers has increased substantially in the last decade.
“The industry had been trying to make that work,” Taub noted. “These new battery chemistries really offered the ability to package the vehicle to deliver what the consumer wanted.”
Taub, who is has previous experience as an executive at General Motors and as a researcher at Ford and General Electric, considers EVs a “better vehicle,” because of their fewer parts, faster acceleration, a lower center of gravity, and their quieter operation compared to ICE vehicles.
According to Rampton, a lot of the innovation in EVs comes not only from battery technology but also from the software that controls the car.
“There are more lines of code right now in a car than there are across the internet,” Rampton said, “And most of what electric vehicles are managed by are just giant computers.”
Taub’s team at the Electric Vehicle Center is working with major auto companies to identify current shortages in the labor market. While some worry about job losses with the shift toward EV production, Taub explained that it will mostly lead to upskilling of various positions.
“Battery electric vehicles have fewer moving parts, but with the expected continued growth in the number of vehicles, productivity is always there in any manufacturing plan,” he said. Currently, there is a shortage of electrical engineers, a widespread issue the tech industry faces. Taub is optimistic that the US, particularly Michigan, will remain competitive in the global market as EV research, development, and manufacturing create numerous jobs.
Environmental and Economic Incentives
EVs are mostly incentivized by their environmental impact, because they drastically reduce carbon dioxide emissions compared to ICE vehicles. Transportation is currently the largest contributor to greenhouse gas emissions in the U.S.
Usha Haley, the W. Frank Barton distinguished chair in international business at the W. Barton School of Business at Wichita State University, stated that a shift to electric vehicles could reduce U.S. emissions by 50%, since consumer cars are the leading emitters of carbon monoxide.
Haley noted that EVs have environmental costs as well: lithium mining for batteries is challenging, and battery disposal is difficult. Electric vehicles also shift resource strain to energy grids rather than oil supply. She indicated that there is a “real benefit, a tangible benefit,” to the environment as technology improves and more research goes into the batteries.
Mark James, the interim director of the Institute for Energy and the Environment at Vermont Law and Graduate School, added that the growing demand for EVs also pushes manufacturers to produce more fuel-efficient ICE cars, further reducing pollutants.
While their environmental advantages are clear, EVs remain more expensive to purchase than gas-powered vehicles, typically costing about $10,000 more, James said.
The previous administration included a tax credit of up to $7,500 for new electric vehicle purchases in the Inflation Reduction Act. Policy experts suggest that a new executive order may not necessarily roll back funding already allocated by Congress, making the future of these tax credits unclear under the current administration.
Individual states may pursue their own initiatives, James suggested. California set its own emission standards years ago, and many states have followed suit. While electric vehicles have a higher initial cost, current research shows comparable costs to gas-powered vehicles over time. States aiming to reduce greenhouse gases could maintain their own financial incentives through tax or grant programs to encourage residents to switch to electric cars, according to James.
Industry Growth vs. Federal Support
Researchers and industry professionals believe that electric vehicles are “here to stay,” even if the current administration rolls back tax incentives, cuts federal spending on charging locations, and removes EV production goals.
Taub projects that the cost of owning a battery electric vehicle will be on par with or less than a gas-powered car by 2030. Taub also believes that although the current administration may take a reduced role with the industry, the government still has responsibility in supporting the transition to EVs in terms of CO2 reduction and the global race for auto leadership.
“Can the government completely step away from supporting that transition in a global world? No,” Taub said. “What form that takes can be different in different administrations. So it’s important to keep driving the research and development, both in the companies and in academia and the national labs.”
Rampton believes infrastructure responsibility for charging will shift to automakers. He anticipates that the industry will see more partnerships between car companies. This can be seen in the 2023 agreement that gave Ford customers access to Tesla chargers.
“I think EVs are definitely here to stay, and I think they definitely have a very, very strong future,” Rampton said. “It’s just now more pressure we put on automakers to make that happen.”
