Not long ago, EVs were the hottest thing around since the advent of smartphones 15 years earlier. Consultants and analysts were falling over themselves with outlandish projections of surging EV sales over the next several decades. Boston Consulting Group went as far as to forecast that EV and hybrid vehicle sales would top 50% of total cars sold in the US by 2030. Auto consultancy JD Power estimated that America’s EV sales would grow to a more modest 36% of total car sales by the turn of the decade. Now, most forecasts of US EV sales have been slashed to between 20% and 25% of total US car sales by 2030.
Headline writers have been too harsh on electric vehicles (EVs) lately. The once high-growth business is chugging along more slowly than boring old utilities that supply power to AI data centres. Things took a turn for the worse in early July when the US Congress passed the tax and spending cuts-laden “One Big Beautiful Bill Act”. The legislation slashes a US$7,500 ($9,600) incentive for new and plug-in hybrid vehicles as well as rebates for EV batteries, reopening the on-again, off-again feud between US President Donald Trump and EV pioneer, Tesla Inc CEO Elon Musk, the world’s richest man who not long ago was being touted as America’s co-president.
Trump and his supporters contend that Musk, who spent US$290 million of his own money to help the president get elected last November, has turned against the administration because the bill takes away subsidies for EVs, his flagship business. Musk, for his part, argues that Tesla no longer needs any rebates and that he opposed the “insane spending bill” because it backs old industries at the expense of new cutting-edge technologies, apart from adding another US$3.3 trillion to the burgeoning US$36 trillion budget deficit over the next decade.
