The U.S. is falling further behind China and Europe in EV production

US President Joe Biden tests the new Ford F-150 Lightning Truck during a visit to the VDAB at the Ford Dearborn Development Center in Dearborn, Michigan, May 18, 2021.

Leah Millis | Reuters

According to a new study by the International Council on Clean Transportation, the US lags behind China and Europe in domestic production and adoption of electric vehicles – and that gap widened from 2017 to 2020.

According to the study, more than 10 million electric cars were produced worldwide between 2010 and 2020. By the end of 2017, US-based automakers had produced 20% of global stocks. By 2020, US automakers represented only 18% of the cumulative number of electric vehicles produced since 2010, while the share of production in China and Europe increased.

According to ICCT, the government’s policy of promoting electric vehicles has made all the difference.

“The growth in electric vehicle manufacturing is happening where there are strong national guidelines designed to move the market forward,” said Nic Lutsey, program director at ICCT, in a statement. “Hundreds of billions of dollars are on the table and the United States hasn’t even bothered to pull up a chair.”

From 2010 to 2020, researchers found that China was the largest manufacturer of electric vehicles geographically, accounting for about 44% of all electric vehicles manufactured with about 4.6 million units in both production and sales during that decade.

Europe produced 25% of the world’s electric vehicles from 2010 to 2020, producing 2.6 million and selling 3.2 million, making the region a net importer.

Tesla China-made Model 3 vehicles are seen during a delivery event at its plant in Shanghai, east China, Jan. 7, 2020.

Aly song | Reuters

In the last year alone, U.S. automakers produced at least 450,000 electric vehicles, with Tesla accounting for about 85% of that production for the year. Annual exports of electric vehicles from plants in the United States exceeded 215,000 in 2020, most of any single nation.

Stronger overseas demand than the US is making it necessary for electric vehicle manufacturers like Tesla to ship and set up stores outside of the US. Companies tend to sell their electric vehicles relatively close to the plants where they are assembled.

Electrics, including hybrids and all-electric vehicles, accounted for just 2.3% of new vehicle sales in the U.S. in 2020. Meanwhile, 10% of new car sales in Europe were electrics and 6% were electrics in China.

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This demand abroad creates a kind of network effect. Automakers have invested more money and are planning more aggressive plans to build new plants and sell a wider variety of electric vehicles overseas than in the US, the ICCT study finds.

For example, Volkswagen is expected to have the largest total production of electric vehicles by 2025, based on the company’s previously announced plans and investments, with no all-electric vehicle plants in the US, but several all-electric vehicle assembly plants in Europe and China.

Only two of 44 vehicle assembly plants in the US were dedicated exclusively to manufacturing electric vehicles in 2020, the ICCT report said. Three GM plants are slated to move to production-only electric vehicles in 2021, and Tesla and Lucid Motors each have a new all-electric vehicle plant under construction. That would be seven of the 44 U.S. vehicle assembly plants that the company plans to manufacture exclusively electric vehicles by 2025.

Policy “focused on a transition to zero-emission vehicles” or the lack thereof has driven these global trends, the ICCT researchers concluded.

In Europe, the study found, automakers have introduced dozens of new electric models and have greatly increased the number of electric cars they make or want to build in recent years compared to the US. This step largely serves to comply with regional vehicle emission standards.

In China, both “demand- and supply-side measures” helped increase the production and acceptance of electric vehicles, according to the study. China has expanded and tightened a variety of consumer incentives that restrict internal combustion engine vehicles and instead make it easier to buy, register, and drive electric vehicles.

Meanwhile, some efficiency standards for vehicles were withdrawn in the United States under former President Donald Trump. And state incentives to buy electric vehicles began to be phased out for automakers with the highest volume of electric vehicles like Tesla and GM.

A new bipartisan infrastructure plan in the United States provides $ 15 billion for electric vehicle, electric bus, and mass transit infrastructure – a fraction of President Joe Biden’s earlier proposal to spend $ 174 billion to boost the electric vehicle market.

Read the full study here.

Correction: This story has been updated to reflect that the companies’ plans are for seven of the 44 U.S. vehicle assembly plants to manufacture all-electric vehicles by 2025.

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