Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles, and Opportunities

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This paper identifies and quantifies major determinants of future electric vehicle (EV) demand in order to inform widely-held aspirations for market growth. Our model compares three channels that will affect EV market share in the United States from 2020–2035: intrinsic (no-subsidy) EV demand growth, net-of-subsidy EV cost declines (e.g. batteries), and government subsidies. Geographic variation in preferences for sedans and light trucks highlights the importance of viable EV alternatives to conventional light trucks; belief in climate change is highly correlated with EV adoption patterns; and the first $500 billion in cumulative nationwide EV subsidies is associated a 7 to 10 percent increase in EV market share in 2035, an effect that diminishes as subsidies increase. The rate of intrinsic demand growth dwarfs the impact of demand-side subsidies and battery cost declines, highlighting the importance of non-monetary factors (e.g. charging infrastructure, product quality and/or cultural acceptance) on EV demand.