The market for electric vehicles (EVs) in 2021 is off to a hot start with many moves being made by automotive OEMs planning to make the switch to EVs.
However, 2020 was a good year for EVs as well with registrations in the U.S. reaching a record market share of 1.8% due to increased consumer interest, according to research from IHS Markit. In December, it was the highest monthly share for EV new registrations at 2.5% of the industry, a record level since IHS began tracking new vehicle registration by fuel type.
While the overall registrations for vehicles was down across the industry because of the COVID-19 pandemic, the 2.8% registration for EVs in December more than tripled the EV retail share of three years ago and shows the rise in EV acceptance with recent OEM announcements of substantial investments in electrification.
IHS said even further growth in the EV share is expected in the U.S. in 2021 given the OEM commitment to the technology. In fact, IHS forecasts EV sales in 2021 will surpass 3.5% nationally and continue to increase to more than 10% in 2025. This will be due to more than 100 new EV options expected between 2021 and 2025 as well as continued consumer acceptance and demand as combustion engines are displaced by EVs.
“Consumer acceptance of electric vehicles is increasing, though at a modest pace, and now is at record levels,” said Tom Libby, associate director of industry analysis at IHS. “We continue to see significant contrasts in EV adoption across different regions of the country, led by the two coasts.”
In the U.S., the Western region saw 4.8% sales of vehicles registered were EVs and in San Francisco alone, EV share was 11%. EV market share in the Northeast was 1.6% in 2020 and in New York City the share was 2%. In the Southeast, just 1.1% of 2020 new vehicle registrations were electric and in Washington D.C. EV share was 2.5%.
IHS said that consumers who buy EVs are more likely to buy another EV as their loyalty to the vehicles is growing. More than half of EV households that return to the market acquire another EV, up substantially from prior years, the market research firm said.
“Record high EV loyalty rates imply consumer acceptance for the entire electric vehicle concept,” Libby said.