EV U.S. Sales Lag Will Reprieve ICE, Boost Hybrids

Every other new car bought by Americans in 2030 was supposed to be electric, but as the Trump Administration clears away EV incentives and targets, the total is likely to be less than half that and offer a lifeline to gas powered vehicles and hybrids

That represents an unexpected new lease of life for the likes of GM , Ford, and Stellantis brands like Chrysler, Dodge, Jeep and Ram and their combustion technology. They were highly dependent on internal combustion engines and were either slow or reluctant to embrace EVs.

A combination of tax credit rollbacks, emissions standards delays and the removal of the Biden Administration and its call for a 50% share for EVs in the new car market in 2030 is a boost for ICE. Manufacturers will also be busily raising production of hybrids, plug-in hybrids, and extended range electric vehicles*.

Consultants Roland Berger put it this way in a recent report.

“Delayed adoption of BEVs (EVs) will have cascading effects on the entire automotive value chain, prolonging profitability challenges for electrification-focused players and extending the window of opportunity for ICE-focused legacy players,” the report said.

Analysts have been scrambling to slash their forecasts for U.S. EV sales in 2030. Investment bank UBS says EVs will only reach 24% of the new car market or 2.7 million vehicles. Four months ago UBS was predicting 32%. U.S. EV market share is currently around 10%. BloombergNEF now predicts 27%, down from almost 48%. Investment researcher Jefferies is even lower at about 20% along with Roland Berger. Roland Berger was projecting around 40% under Biden’s watch.

EV sales forecast for 2030 halved

“Actions taken by the Trump administration to loosen light vehicle emissions standards have effectively halved our forecast for U.S. electric vehicle adoption by 2030 – We now only expect about 20% BEV sales by 2030,” said Brandon Boyle, Senior Partner and Americas Automotive lead at Roland Berger.

This compares starkly with Europe’s ambitions. The European Union has decreed EV sales shall reach about 80% of new vehicle sales by 2030 on the way to 100% by 2035. Given current market share is barely 20% in Europe, some major humble-pie eating is on the cards.

“The U.S. market has different dynamics (than Europe): more rural driving, less dense urban cores, and a political environment that could shift depending on the 2028 (Presidential) election,” said Curt Hopkins, CEO of MCQ Markets . MCQ Market says it is a FinTech firm making high-value assets accessible and investable.

“I wouldn’t call it a comeback for ICE, but it’s not going away overnight either. Hybrids and plug-in hybrids are still very much part of the transition-especially for consumers who aren’t quite ready for a full battery-electric experience. Expect those to play a meaningful but gradually shrinking role through the decade,” Hopkins said.

Bernstein Research analyst Daniel Roeska said at some point EV demand will accelerate again. Maybe after the 2028 election or after 2030.

“It (the expectation) won’t be 50% for a long while,” Roeska said in an interview.

“(General Motors, Ford and Stellantis) agreed that U.S. electrification will take a lot longer. Even if the target picture of high EV share in the U.S. has not changed, (manufacturers) are waking up to the fact that they must improve EV profitability without significant volume growth and maintain investments into legacy products for longer,” Roeska said in a recent report.

^{Hard to bet against Tesla}

Tesla is the current EV market leader and despite a huge increase in competition and lower expectations for the overall market, is expected to retain its ascendancy, said MCQ’s Hopkins.

“It’s hard to bet against Tesla. They’re vertically integrated, have a dominant brand, and continue to lead on software and over-the-air updates. As long as they maintain that pace of innovation, they’ll likely still be the U.S. leader in 2030,” said Hopkins.

According to Kelley Blue Book , the Tesla Model Y led the U.S. EV market in 2024 with sales of 373,000 and a market share of 28.6%, the Tesla Model 3 was next with 190,000 (14.6%). Then came the Ford Mustang Mach-E with 52,000 or 4.0%.

“That said, keep an eye on some dark horses. Chinese automakers like BYD and NIO are getting serious about international expansion, and if trade policy allows, they could become a factor in the U.S. by the end of the decade.”

“Among the legacy automakers, Ford, GM, and Volkswagen have all shown real progress. Their ability to scale EV production and leverage existing dealer networks could help them close the gap, especially as more affordable models hit the market,” according to Hopkins.

Twice the power, half the weight, half the cost

He doesn’t expect any game-changing battery technology before 2030, just incremental improvements in battery design. The long- promised solid-state battery revolution – twice the power, half the weight, half the cost – isn’t close as researchers stumble over mass production techniques.

And the trouble is that as consumers hear about this huge, imminent improvement, they are likely to be wary of buying an EV, and risk having its residual value torpedoed by game-changing technology. That could put the skids on EV demand as 2030 approaches.

More bad news for EV makers came this week, courtesy of a survey of 15,000 drivers around the world by oil-giant Shell. The survey showed drivers in America are becoming more reluctant to switch to EVs from ICE vehicles. Those considering switching fell three percentage points to 31% compared with a year ago. In Europe, the reluctance was more ominous given the massive EV targets set for 2030. According to the survey, 41% said they would consider switching to an EV, down from 48% last year. Shell operates 75,000 charging points around the world including the U.S., Europe and China.

*(Hybrids use computer power to combine for maximum efficiency with gasoline engines, and have relatively small batteries. They provide maybe 1 mile of electric-only driving. PHEVs have bigger batteries which can be charged independently and can provide up to 75 miles of electric-only transport. EREVs, like the Mazda MX30 R-EV, use small combustion engines to charge the battery. The MX30 R-EV is always powered by electricity.)