The North American electric vehicle (EV) market is experiencing a period of uncertainty despite significant investments from both native and foreign carmakers. The Trump administration’s recent reversal of legislation designed to support localized EV manufacturing and incentivize sales in the US has sent mixed signals through the industry. According to the International Energy Agency, the market share of EVs in the US jumped from 0.2% in 2011 to 4.6% in 2021, with similar adoption rates seen in Canada and Mexico. However, this growth has stagnated in recent years, with only a small increase from 7.5% to 8% between 2023 and 2024.
Despite this slowdown, automakers have continued to invest heavily in the EV space, driving innovation throughout the value chain. Experts at the Finished Vehicle Logistics North America conference expressed optimism about EV forecasts and the steps taken by North American companies to reinforce EV and battery production. Thomas Shannon, GM’s finished vehicle operations manager for ports and logistics EV, emphasized that “batteries, batteries [and] batteries” are the most critical components of an EV.
Legislative Challenges
The Biden administration’s Inflation Reduction Act (IRA) and the Chips and Science Act had previously encouraged domestic EV production and consumer adoption. However, President Trump’s halt on IRA benefits and introduction of tariffs on Chinese and other foreign battery parts have created uncertainty. A recent bill introduced by the House of Representatives seeks to remove several tax credits associated with EVs, including the Commercial Clean Vehicle Credit.
Nearshoring and Investment
In response to these challenges, automakers are increasingly turning to nearshoring to strengthen their battery supply chains. GM has committed to building a battery facility in Michigan, while Ford plans to reshore battery production for several EV models. Rivian has announced a $120m supplier park project attached to its EV production facility in Illinois. Foreign carmakers such as Toyota and Hyundai are also investing heavily in North American EV production, with Toyota opening its first battery manufacturing plant outside Japan in North Carolina and Hyundai establishing a metaplant in Georgia.
Future Outlook
The International Council on Clean Transportation has downplayed concerns about battery material supply disruptions, citing over 100 lithium mining and refining projects underway in the US and its trade partners. The Global EV Outlook forecasts that US plug-in car sales will double to 20% market share by 2030. However, industry leaders remain cautious, citing charging infrastructure and battery costs as critical challenges. Patrick Manzi, chief economist at the National Automobile Dealers Association, noted that “uncertainty is the only constant right now,” but believes that careful planning could mitigate these challenges.
As the North American EV market continues to evolve, it remains to be seen how these factors will impact the industry’s growth and development. One thing is certain, however: the future of EVs in North America will be shaped by a complex interplay of technological innovation, legislative developments, and shifting consumer demand.
