Revised EV growth forecasts count on incentives to boost sales

In its latest E-Vision Intelligence Report, J.D. Power cut its 2024 and 2025 EV market share forecasts to account for slower-than-expected growth in the first half of 2024.

Driving the news: Now, they're projecting EVs will grab 9% of the market in 2024—down from an earlier 12% forecast—which equals about 1.2 million BEV sales.

• Further down the line, they expect EVs to hit 36% of the market by 2030 and 58% by 2035.

Why it matters: Competition from plug-in hybrids (PHEVs) and concerns about public charging are holding things back.

• PHEVs have gained traction, jumping from 0.6% of sales in 2020 to 1.8% today, with 45 models now on the market. While BEVs and hybrids (HEVs) still dominate, the growth in PHEVs adds pressure on EV adoption.

• But, this surge might be short-lived. PHEVs score lower than BEVs in 9 of 10 satisfaction categories, including battery range and cost of ownership.

• Public charging is still one of the biggest challenges of owning an EV. Yet, satisfaction with Level 2 and DC Fast Charging options for two straight quarters.

The good news: Tax breaks, rising incentives, and leasing deals have made EVs cheaper and more accessible, which could turn into actual sales soon.

• Consumer interest in EVs is climbing, with 28% of new-car shoppers "very likely" to consider a BEV—the highest this year.

• The $7,500 Clean Vehicle Credit for leased EVs has pushed 86% of premium BEV sales (excluding Tesla) and 72% of mass-market BEV sales into leases. Only 11% of Tesla's sales are leases.

• With 94% of current BEV lessees open to another EV, we may see a big sales jump as these customers return.

What to watch: Lower prices, more models, and better leases may boost EV sales, especially as more car buyers return to the market.

The bottom line: J.D. Power’s revised forecast shows that consumers face mixed signals on the road to EV adoption. Incentives and new models have some momentum. But, the next few years are crucial and will determine if the market meets its long-term goals.

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