US electric vehicle sales are slowing amid policy shifts: BNEF

Sales are still growing, but policy changes in the United States are significantly slowing the country’s adoption of electric vehicles, BloombergNEF said Wednesday in its annual global outlook for the sector.

This “is the first year where we have reduced both our near-term and long-term passenger EV adoption outlook,” BNEF said in its 2025 Electric Vehicles Outlook. “Policy changes in the US are the biggest factor, with national fuel-economy targets being rolled back, supportive elements of the Inflation Reduction Act either being removed or under threat, and the potential removal of California’s ability to set its own air quality standards.”

Electric vehicles set global sales records last year, and adoption rapidly increased in emerging markets across Asia and Latin America, according to Colin McKerracher, lead author of the report and BNEF’s head of clean transport and energy storage.

“Despite these positive tailwinds, we see slower EV adoption in the short and long-term due in large part to the changing landscape in the US,” McKerracher said in a statement. “This shift in global adoption will also have major impacts on the battery industry, leading to overcapacity in manufacturing.”

BNEF now expects passenger EV sales in the United States to rise from 1.6 million this year to 4.1 million in 2030, to make up 27% of total passenger car sales by the end of the decade. In last year’s report, the firm had anticipated EVs would make up 48% of sales by that time.

“It results in cumulative EV sales between now and 2030 being 14 million units lower,” according to the report.

The impact on battery supply is significant, according to BNEF.

The firm’s global battery demand outlook between 2025 and 2035 “fell 8% compared to last year’s, equating to 3.4 [TWh] fewer batteries — a majority of which (2.8 TWh) can be attributed to decreasing passenger EV sales in the US, where demand is 42% less than in last year’s outlook,” the report said.

This dynamic is leading to continued overcapacity, “driving battery costs lower and intensifying market competition. In China, average utilization of battery plants is now below 50%,” BNEF said in a statement. “Despite a near-term slowdown, the long-term growth for battery metals remains strong as EVs are adopted more quickly across all segments.”