E-mobility is one of the fastest-growing sectors in the tech world. In the first half of 2022, a study from Canalys found that nearly 2.4 million EVs were purchased by consumers in mainland China, accounting for 26 percent of new car sales in China and a whopping 57 percent of global EV sales. By comparison, the United States accounts for only 6 percent of the global EV consumer market but is the home base of Tesla, which enjoys a 64 percent share of the market. Moreover, in the United States, EV sales only accounted for 5.6 percent of new cars purchased in 2022, according to reporting from Inside EVs.
However, despite the lackluster performance in e-mobility to date, the United States has set an aggressive and very serious goal of occupying 50 percent of the global EV market by 2030. Reaching such a lofty goal will require a significant evolution in the US market over the next seven years.
Several trends will dictate how this sector continues to grow including expanded charging infrastructure, improved battery technology and the emergence of smaller vehicles such as e-scooters and e-bikes.
Improving Charging Infrastructure
One of the biggest challenges facing the mass adoption of EVs in the United States is the lack of comprehensive charging infrastructure. According to the International Council on Clean Transportation, greater availability of workplace and public charging infrastructure is directly linked to an uptick in consumer willingness to invest in EVs.
Research from Fortune Business Insights found that the 10 cities with the best adoption rates of EVs in the US had on average 935 public chargers per 1 million residents. By comparison, the same study found that half of the U.S. population lives in areas serviced by just 20 percent of the EV charging infrastructure available in those top 10 cities.
For the U.S. to reach its goal of accounting for 50 percent of the global EV market by 2030 a commitment to implement charging infrastructure is required. To that end, the Biden administration has earmarked over $7.5 billion to build 500,000 public charging stations across the country by 2030.
In February, the White House released a comprehensive list of requirements needed to receive federal funding. The most notable of these mandates dictate that funding be earmarked only to universal chargers that serve all brands of EVs. Furthermore, out of the 2.5 billion earmarked for charging station deployment in the next five years, $700 million has been set aside for the first round of funding, which is expected to begin rolling out new charging infrastructure in 2023.
Investment in Battery Technology
The pandemic-fueled supply chain meltdown of 2020 and 2021 exposed America’s crippling reliance on China for critical technological components. As a result, 2022 was a monster year for U.S. EV battery manufacturing. Without getting too bogged down in the nitty-gritty details, battery manufacturing companies such as Panasonic, LG Chem, Samsung and SK Innovation have partnered with a series of major automotive OEMs such as GM, Honda, Ford, Volkswagen, and BMW to invest nearly $73 billion in battery manufacturing projects in the United States, according to research from the Atlas Public Policy think tank.
These planned investments are projected to take North American lithium-ion battery manufacturing from 55 gigawatt-hours per year in 2021 to a whopping 1,000 gigawatt-hours per year by 2030. According to CNBC, this uptick in North American battery manufacturing is projected to support domestic output of between 10 million to 13 million EVs every year.
These changes to U.S. EV manufacturing capabilities won’t be immediate
; iIn fact, they aren’t projected to be felt in force until 2025. Moreover, as anyone who has ever worked in the construction industry knows, projects are rarely as simple as they seem – just look at Tesla’s problems expanding its gigafactory outside of Berlin.
However, despite this touch of skepticism, one fact remains undeniable: money speaks, and the smart money is on EV production ramping up within the next two to three years.
E-bikes and e-scooters have burst onto the scene over the last five years with the emergence of highly successful ride-sharing fleets such as Lime, Spin, and Bird. These sustainable micro-mobility options are set to take over urban settings where owning a car can be cumbersome and extremely costly.
Not only are e-bikes and e-scooters significantly cheaper than cars, but they provide a fun and engaging way for urban-dwelling young professionals to cover short daily commutes and can be used in a variety of courier or delivery applications. A 2019 study commissioned by the e-scooter-sharing platform Lime found that nearly 50 percent of all riders fell between the ages of 25 and 44, with only 25 percent of riders exceeding 36 years of age.
Understanding the target demographics of these micromobility options is important since it reveals that the market acts as a supplementary mobility option to EVs instead of behaving as a direct competitor. According to research from Mordor Intelligence, the North American e-bike market is valued at roughly $800 million and is expected to be worth nearly $1.62 billion by 2028. By comparison, according to P&S Intelligence, the e-scooter market is worth $620 million and is expected to reach $2.35 billion by 2030.
How Retailers Can Benefit
Due to improving charging infrastructure, battery manufacturing capabilities, and increasing micro-mobility options, the U.S. e-mobility market is set to grow rapidly over the next two to five years. Overall, according to Fortune Business Insights, the U.S. EV market projects to grow from $28.24 billion in 2021 to $137.43 billion by 2028.
While growth may feel insulated to the automotive sector, the reality is that such market changes will provide a series of opportunities for CE retailers. As our cars begin to look and behave more similarly to computers, consumers will likely turn to CE retailers to provide accessories to trick out their rides and improve the at-home charging experience. Retailers would also do well to install EV chargers outside of brick-and-mortar locations and begin featuring micromobility options such as e-bikes and e-scooters on the show floor.