FYI: J.D. Power has revised its EV sales forecast for 2025 from 12% to 9%, citing concerns about charging infrastructure and rising interest in plug-in hybrid vehicles.
J.D. Power Revises EV Sales Forecast for 2025
J.D. Power has adjusted its electric vehicle (EV) sales outlook for 2025. The renowned analytics firm now anticipates that only 9% of new car sales will be electric, a reduction from its initial projection of 12%. This adjustment highlights the growing complexity of EV adoption, influenced by concerns over charging infrastructure and the appeal of alternative gasoline-alternative models such as plug-in hybrids (PHEVs).
Factors Influencing the EV Sales Forecast
Charging Infrastructure Challenges
One primary factor affecting EV growth is the perceived inadequacy of public charging infrastructure. While home charging remains popular, public charging facilities for both Level 2 and DC fast charging still receive poor satisfaction scores. Although improvements have been noted this year, moving the experience from "terrible" to "bad" hasn’t been enough to significantly boost consumer confidence.
Rise of Plug-in Hybrid Vehicles
Another significant factor is the rising interest in plug-in hybrid vehicles (PHEVs). Despite their current share being just 1.8% of retail sales, up from 0.6% in 2020, PHEVs have caught consumer attention. This increase is primarily due to the perception of them as a middle ground between traditional gasoline-powered vehicles and fully electric vehicles (BEVs). However, J.D. Power suggests this trend may be temporary, as PHEVs tend to score lower in user satisfaction and running costs compared to BEVs.
Market Affordability and Incentives
On a positive note, the affordability of EVs has improved, partly thanks to manufacturer incentives and the $7,500 cash incentive from the Inflation Reduction Act. These factors have led to about 72% of all mass-market EVs being leased, making them an attractive option for new buyers. Additionally, 66% of drivers are now in a position to opt for a viable EV alternative instead of their gas-powered cars. Encouragingly, 94% of BEV owners surveyed expressed a high likelihood of purchasing another electric vehicle in the future.
Long-Term Outlook and Challenges
While J.D. Power has downgraded its 2025 forecast, the long-term outlook remains optimistic. The firm predicts that by 2030, EV sales will comprise 36% of new car sales, with that number increasing to 58% by 2035. Despite the current hurdles, continued improvements in charging infrastructure and sustained affordability will be crucial for maintaining this growth trajectory.
However, it’s worth noting that many automakers are scaling back their full EV plans due to financial pressures and profitability challenges. The issue of low-cost EV production remains contentious, particularly with Chinese automakers like BYD and Xpeng producing affordable models that may not be well received in the U.S. market.
Conclusion
In summary, EV sales are indeed on the rise, but the pace is slower than initially anticipated. As challenges around charging infrastructure and the economic viability of EVs from established brands persist, the industry continues to adapt and evolve.
For ongoing updates and insights, reach out to us at tips@automotive.fyi or follow us on Twitter @automotivefyi.
William Kouch, Editor of Automotive.fyi
