The US electric vehicle (EV) market was valued at US$17.54bn in 2021. Maximise Market Research estimates that total revenue could grow at a CAGR of 37.1% from 2022 to 2029, reaching a value of US$219 bn by 2029. “Competition and technology are driving industry transformation in the US market,” says Seraph’s President, Thomas Kowal. Seraph is a global enterprise consulting firm with on-site industry experience in the automotive, private equity, defense, energy infrastructure, and engineering sectors.
“The transition to EVs creates a portfolio-planning challenge and brings more complexity for OEMs,” he says. The Biden Administration has put forward the aspiration that approximately 35% of vehicle production in the US will be EVs by 2030. Kowal believes that its success will depend on “operational planning and workforce preparation for an increasingly automated future.”
Supply chain shortages and battery material scarcity
The road ahead for developing EVs is not straightforward. Factories in the US produced 7.4 million cars and trucks in the first half of 2022, but only 323,000 of them were electric, according to Bloomberg. “There are many challenging obstacles facing the future of EVs. They can be summed up in five key areas: customer acceptance; charging infrastructure; chip shortages; battery shortages; and reliance on rare earth materials such as lithium, tin, graphite and nickel,” says Kowal.
35% of the vehicles will be an EV in seven to eight years, which will cause even more pressure for OEMs and suppliers to be able to meet this requirement
With EVs, the high cost of battery components and other materials makes producing a profitable but affordable vehicle challenging. Furthermore, according to project management software provider Production Net, suppliers are now 30% less efficient compared to pre-pandemic levels.