Half of US households to have EV by 2035

Half of American households are set to own an EV by 2035, according to a new report from equity firm Deepwater Capital Management.

But the report warns that EV uptake may be slower than many expected over the next two to three years.

"In our view, EV adoption is bumping into some resistance in the transition from early adopters to the early majority, a standard curve with any new technology," it says. "Despite a step-up in new EVs, most Americans we surveyed continue to want their next car to be gas-powered."

With many industry forecasts projecting a downturn in EV demand growth for 2024, many commentators have sought explanation for the slowdown in the logic that EVs are between two tranches of adopters.

A survey of consumers by the firm showed that 20pc of consumers will buy an EV for their next vehicle. Assuming that most of those surveyed will buy a new car in the next four years, this suggests that the market share of EVs will reach 22pc by 2028, up from around 9pc today.

Under current US law, all new vehicles sold by 2035 must be zero emissions. But while OEMs and lobby groups typically cite the EV share of new vehicle sales as evidence of adoption, a recent report from the European Automobile Manufacturers Association emphasises that the industry should benchmark itself on its share of cars on the road.

Demographic and geographical factors materially affect consumer attitudes to EVs, Deepwater finds, with young affluent males twice as likely as the average to be considering a battery vehicle for their next purchase.

The Northeast US is the region where someone is the least likely to say their next car will be an EV, the survey finds, "potentially due to cold weather and impact on batteries", according to Deepwater.

Price war may reward OEMs

As OEMs – including Stellantis, Renault and Tesla – continue to aim for lower prices on their EVs, Deepwater finds that targeting affordability over margins is the route to gaining market share.

That said, nearly twice as many higher income car buyers say their next car will be an EV when compared with those earning below $100,000. And of those who said their next car will be an EV, 50pc of Deepwater's survey respondents say a Tesla — hardly a budget option — is their first choice.