The United States is the third-largest electric vehicle (EV) producer behind China and Europe; a new study from the International Council on Clean Transportation (ICCT) finds that the gap has widened. The ICCT study finds that the United States’ share of cumulative global EV production decreased from 20% to 18% since 2010 and only 15% of the approximately $345 billion in global automaker EV investments are flowing to the US.

Cumulative electric vehicle sales and production from 2010 through 2020, in major regions (based on EV-Volumes, 2021). Source: The ICCT

Based on company announcements through 2020, about 5% of this global total is actively being invested in local US assembly plants. Just seven of the 44 major US vehicle assembly plants are slated to be making all EVs by 2025.

Comparatively, EV manufacturing has increased at a faster rate in China, which made up 44% of global EVs manufactured through 2020, up from 36% in 2017. Similarly, European manufacturing accounted for 25% of global EVs through 2020, up from 23% in 2017. In terms of annual EV production, Europe’s 1.1 million nearly matched China’s 1.27 million in 2020, followed by 450,000 in the US and about 110,000 each in Japan and South Korea.

The research on electric vehicle uptake around the world is clear: electric vehicle manufacturing growth happens where there are strong national policies designed to spur the market forward.

—Nic Lutsey, Program Director at ICCT

Of the 10 million cumulative EVs sold globally, 80% were produced in the same region in which they were sold. The US market has remained steadily behind with fewer than 360,000 EV sales annually from 2018 through 2020, whereas Europe saw explosive growth from 390,000 to more than 1.3 million and China grew from about 1 million to more than 1.25 million over the same period.

Recent policy action focused on the transition to zero-emission vehicles is responsible for the latest EV trends, the report concludes. In Europe, automakers deployed dozens more new models—and with greatly increased volume compared to the US—to meet the vehicle emission standards. China has the most comprehensive system of demand- and supply-side policies and has extended its consumer incentives and is implementing stronger EV regulations.

Similarly, of the automakers’ announcements that together total 22 million annual EV sales by 2025, about 2.3 million (or about 10%) are slated to be manufactured in US. Automakers based in China and Europe have made more substantial commitments to EVs.

Estimated global light-duty vehicle production through 2025, by automaker. Source: The ICCT.

About 33% of General Motors’ $27-billion EV commitment is being invested in specific US assembly plants. While Ford has pledged to offer all-electric variants for every model it sells in Europe by 2030, it has not made similar commitments in the US, and only about 6% of its $30-billion EV investment is actively being made in US plants.

Great promotional events and bold aspirational statements by the domestic auto industry can’t mask the facts. This is a huge missed opportunity. Continuing on this path would hurt the domestic US auto industry’s prospects for decades.

—Nic Lutsey

Of the seven US EV-only assembly plants, representing about 16% of US vehicle production and capacity, three are owned by General Motors, two by Tesla, and one each by emerging EV companies Rivian and Lucid Motors. Five automakers (Ford, Fiat Chrysler, Toyota, Honda, and Nissan) that each produce about 900,000 to 1.5 million vehicles annually in the US have not announced plans for EV-only assembly plants.

There is global competition among countries to seize the economic benefits from the transition to electric vehicles. Despite the United States lagging through 2020, major automakers appear to be well-positioned to transition if guided with the right policy signals. This research points to several critical areas for further investigation: how the transition to electric vehicle assembly plants is occurring faster in China and Europe, the US risks and opportunities related to electric vehicle imports and exports, the prospects for US battery manufacturing and other supply chain growth, the workforce implications, and broader potential for direct and indirect economic benefits. Such research would help in understanding the potential for a growing role for the US automotive industry as the world continues to transition to electric vehicles.

—“Power play: Evaluating the US position in the global electric vehicle transition”