Global awareness of environmental issues and humankind’s role in the changes is growing. Electric vehicles are not the solution to all the pollution problems created by combustion cars, but they can help reduce emissions from urban and rural mobility. As with most things, there are advantages and disadvantages to the tech. But the world is shifting in that direction, some places faster than others.
Among large economies where the auto industry is a key driver of wealth is the United States. EV growth has been slow in this region compared to others, relegating the electric segment to that of a minor player in the industry. Sales simply aren’t taking off as some automakers expected. Why is that? There are four main reasons to consider.
Big Cars, Big Roads, Big Infrastructure:
SUVs and pickup trucks were born in America. The need for more cargo and cabin space to traverse the vast rural landscapes outside cities has made them very popular among US consumers. Americans like everything big, and that goes for horsepower as well. Having a large vehicle with plenty of power isn’t necessarily about going fast, but simply having the guts to cover long distances without breaking a sweat. As such, there isn’t another country in the world with more large vehicles than the United States.
Checking out the numbers, we see the average weight for an SUV in the US was 4,969 pounds in 2023. Trucks were even heavier at 5,840 pounds. As you might imagine, it takes a lot of fuel to move those vehicles. However, the vast energy resources available in the US allow consumers to travel without worrying about filling up. The American economy is heavily based on the oil and gasoline industry. This is why muscle cars, pony cars, trucks, and SUVs have grown more in the States than anywhere else.
It takes time to shift from fossil fuels to electric power, both physically given the sheer size of the country, and culturally. Installing a reliable charging infrastructure to cover all areas will be a years-long effort. Getting drivers to transition from big engines to smaller electric motors could take longer.
Price At The Pump
The availability of energy sources in the US has a direct—and favorable—impact on fuel prices throughout the country. Gasoline and diesel costs remain much lower than those in many regions where government policies encourage less driving and electric alternatives through higher fuel taxes.
In France, for example, the average price of a gallon of gasoline was $7.50 in February 2024, compared to just $3.49 in the United States. Due to the relatively low costs of operating an ICE vehicle in the States, there is currently no strong financial incentive for consumers to go electric.
Import Laws Make EV Production A Challenge
As a result of growing competition from China and its global expansion plans, the US government has taken measures to promote localized production with the Inflation Reduction Act (IRA). Despite good intentions for the American economy, the regulations can have negative effects on battery-electric vehicle producers within the country. By trying to cut China out of the equation for battery manufacturing and metal suppliers, companies like Tesla, General Motors, Ford, and Stellantis may have a harder time building products locally once supply chain constraints are considered.
The lack of competitive raw materials could make IRA an obstacle for American automakers in producing BEVs. This is another reason consumers are delaying the switch from ICE to electric vehicles.
| 2023 | 2024 | 2025 | 2027 |
| 40 percent of the battery raw materials must come from the United States or countries with which America has a free trade agreement. | Do not use battery components made in China. | No battery metal mined or processed in China. | 80 percent of the battery raw materials must come from the United States or countries with which America has a free trade agreement. |
A Political Controversy:
US citizens are preparing for the electoral campaign that will decide the next president. The most likely candidates are Donald Trump and Joe Biden, and electric vehicles are set to become a key issue in the battle for the White House. On one hand, there is the current administration that tries to assert the country’s interests with the IRA. On the other, there is a strong rhetoric that automatically links BEVs to China. Political uncertainty is forcing some automakers to delay their electrification plans, sending a negative message to potential electric vehicle customers.
The author of the article, Felipe Munoz, is an Automotive Industry Specialist at JATO Dynamics.
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