E-Vision Intelligence Report August 2023 | JD POWER

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from J.D. Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

ARTICLE/INSIGHT

America Grows Increasingly Divided on EV Adoption

 Executive Summary

To the long list of literal and figurative lines of demarcation that illustrate the sharp geographic, political, socioeconomic and cultural divisions between states in the United States, we may now add the EV adopters and the EV holdouts. 

• According to the latest data from J.D. Power, EV adoption in America is growing increasingly divided, with the most active states for EV adoption already on the path to parity with internal combustion engine (ICE) vehicles and 
• Consumers steadily pulling back on EV purchases in the least-active states.

How will that trend play out in the next decade, and which states are leading the EV charge and which ones are slow to transition? 

Key Findings

• Divided States of EV Adoption: Nationwide, electric vehicle (EV) adoption is up 1 index point through the first half of 2023 vs. the same period a year ago. At the state level, however, a stark division is emerging between the top 10 states for EV adoption, where EV adoption rates are growing steadily, and the bottom 10 states for EV adoption, where year-over-year average adoption rates are declining. 
• 2035 Forecast Shows Increasingly Uneven Adoption Rates Across U.S.: New J.D. Power EV Retail Share Forecast captures granular EV sales, consideration, pricing, infrastructure growth and other census and demographic factors to project state-by-state EV adoption rates through 2035. California is projected to reach 94% EV share in that time, while North Dakota may not even break the 20% threshold and Michigan will reach just 41%.
• Affordability Skewed by Aggressive Tesla Pricing: Overall EV affordability is up 15 index points through the first half of 2023 but that number is being skewed by heavy discounts on Tesla vehicles. During the next several months, as we see an influx of new EV SUVs and trucks from the likes of Chevrolet, Cadillac and Tesla, we expect to see a great deal of volatility in overall EV affordability scores.

EV Sovereignty Across the United States

On a nationwide basis, EV adoption rates have continued to rise steadily, with EV sales now representing 8.6% of the total new-vehicle retail market. On a year-over-year basis, overall EV adoption is up 1 point on our 100-point index, bringing the total Adoption score to 21. What’s underneath that nationwide score, however, is significant variation on a state-by-state basis.

Increasingly, the U.S. is being split into two camps when it comes to EV adoption: those states who’ve been aggressive about offering incentives and building infrastructure to support EVs and those that have not. Accordingly, the top 10 states with the highest overall EV adoption rates—California, Washington, Hawaii, Oregon, Nevada, Maryland, Arizona, Colorado, Utah and Massachusetts—have continued to see EV adoption rates grow steadily, climbing year-over-year through the first half of 2023. Meanwhile, the states with the lowest levels of EV adoption—Michigan, Iowa, Kansas, Arkansas, Mississippi, Wyoming, Louisiana, South Dakota, West Virginia and North Dakota—have gone in the opposite direction, with adoption rates declining on average in the first half of 2023. 

2035 Forecast Puts California EV Share at 94%, Michigan, not So Much

J.D. Power has just introduced a new EV Retail Share Forecast, which captures granular EV sales, consideration, pricing, infrastructure growth and other census and demographic factors to project state-by-state EV adoption rates through 2035. Updated twice per year, the forecast projects EV adoption rates by segment by state and designated market area (DMA) and offers insights into the specific variables contributing to projected growth rates. 

At a nationwide level, the EV Retail Share Forecast anticipates a baseline estimate of 70% EV market share by 2035. In line with the state-level trends discussed above, however, those projections vary considerably by state. California, for example, which currently has the highest EV adoption rate in the nation, is projected to reach 94% market share by 2035. North Dakota, by contrast, which currently has the lowest EV adoption rate, is projected to have a 19% EV market share by 2035. Similarly, South Dakota is projected to reach just 35% share and Michigan is projected to reach 41% share by 2035.

Luxury EVs Still Wield Outsize Influence on Affordability

While true parity between the EV and ICE vehicle markets will only be achieved when manufacturers produce more mainstream EVs, the recent news cycle has been dominated with updates on luxury SUVs and trucks like the new Escalade IQ from Cadillac and the Tesla Cybertruck. Even among current EV sales, total affordability scores are being heavily influenced by the Tesla models, which have recently undergone a series of price cuts that has increased their overall affordability. Industry-wide, Tesla currently accounts for 63% of all EV sales year to date.

Driven largely by Tesla, the luxury market skew that currently exists in the EV market has resulted in overall affordability scores improving 15 (on a 100-point scale) through the first half of this year. However, as buyers make their way through this growth phase of the EV marketplace, we expect to see continued volatility as new models are introduced and manufacturers continue to put their marketing budgets behind high-priced, halo EVs.

Methodology

This J.D. Power E-Vision Intelligence Report is based on data and insights from the J.D. Power EV Index and the J.D. Power EV Retail Share Forecast. The J.D. Power EV Index is an analytics tool to benchmark the growing EV market in the United States. 

• It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with ICE vehicles in the U.S. 
• Each month, the J.D. Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace. 

Find out More

This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The J.D. Power E-Vision initiative is a company-wide program focused on maximizing J.D. Power industry-leading EV data, analytics, insights and solutions. 

Media Contacts

Shane Smith; East Coast; 424-903-3665; ssmith@pacificcommunicationsgroup.com

Geno Effler, J.D. Power; West Coast; 714-621-6224; media.relations@jdpa.com 

Please contact us at the numbers above to connect with the authors or to learn more about the underlying research.