The share of electric vehicles in U.S. light vehicle sales has reached the “hockey stick” moment analysts have been predicting for decades, said Christine Zicek of the Federal Reserve Bank of Chicago. The 29th Annual Automotive Insights Symposium will be held on Wednesday.
Despite the pandemic and supply chain challenges, EVs’ share of new car sales rose to about 6%. Investment from automakers and policy makers, along with incentives from the Inflation Reduction Act, could be a way to boost EV sales, said Zicek, a policy adviser to the Federal Reserve Bank of Chicago’s Division of Research, Policy and Public Engagement. said.
The Inflation Reduction Act “gives us a lot of incentives … they are very substantial and have the potential to bring about significant changes in the battery component and mineral supply chains and their adoption in EV production, and these So do many state incentives to lock our investments into communities,” she said. she said.
Despite the potential of EVs, many challenges lie ahead, including uncertain demand, labor shortages, supply chain issues, rising commodity prices, regulatory changes and union negotiations, Dziczek said. . Experts will highlight these hurdles and other issues at a symposium on Wednesday and Thursday.
Automakers have invested millions of dollars to expand EV production. Dziczek said manufacturing plant capacity remained below 80% on average, which is usually a measure of profitability. Three-quarters of her factories that make EVs have factory utilization below her 80%, she said.
“My concern is that as the number of battery electric vehicles increases, utilization rates at these factories will be very low,” says Dziczek. “As EVs dominate the market, we will lose capacity utilization at our ICE plants. Union bargaining issues are certain.”
The U.S. is far behind in the transition to EVs compared to other countries such as China, Zicek said. Several other countries are seeing more EV production, higher penetration, more battery factories, and more control over the battery supply chain.
“The regulatory phase of the Inflation Control Act, which we are still working on, will be very important in determining how it will be implemented for interested foreign organizations,” she said.