Summary:
- Electric vehicles (EVs) are slowly taking over the U.S. automotive fleet
- EVs are growing rapidly in North Carolina
- North Carolina is well-positioned to benefit from the shift to EVs
The future of the open road is electric.
Back in 2022, the United States crossed a major threshold in electric vehicle (EV) sales. For the first time, EVs officially surpassed 5% of all new cars sold in the United States, according to Cox Automotive – and then, they kept going. This summer, just one year later, EVs accounted for 7.2% of all new auto sales. Consumer adoption of EVs is accelerating, fitting a pattern that has been observed in several other large, industrialized nations, while the market for traditional gasoline engine cars is now in structural decline.
North Carolina is no exception to the rule. New data from the State Department of Transportation shows that EVs are the fastest-growing segment of auto sales in our state. Carolina Forward projects that EVs will cross the significant 1% threshold of North Carolina’s entire automobile fleet later this very year.
It’s clear by now that EVs are the future of America’s, and the world’s, auto fleet. Thanks to some leaders’ savvy positioning, North Carolina is positioned to benefit greatly from this shift.
Growing popularity
Reflecting the national trend, EVs are the most popular form of new vehicles sold in North Carolina today. In May of 2023, the last month for which data is available, over 66,000 EVs were registered in the state, about three-quarters of which were pure EVs (the rest being plug-in hybrids). That represents a whopping 64% year-on-year growth since May of 2022, and that rate is accelerating:
EVs have transformed from a novelty item into a clear consumer preference. Consumer Reports found that one third of American consumers plan to buy an EV as their next car, while Ernst & Young found that over half plan to do the same. Whatever the true number is, the consensus in the automotive industry is that the market for traditional gas-powered cars likely peaked in 2017, and is now in structural decline as a combination of energy costs, consumer preferences and lifestyle changes make them less appealing. Even here in North Carolina, the same NCDOT data shows that registrations for gas-powered cars is essentially flat (or even falling) over the same period as EVs are expanding.
That’s good news for the climate. While EVs produce slightly more greenhouse gases during production compared to traditional gas-powered cars, researchers find they more than make up for it during their lifetime of driving. MIT’s Climate group found that EVs are significantly better for the environment, meaning in total greenhouse gas emissions, than gas-powered cars, even taking into consideration their manufacturing. Just how much better depends a lot on how the driver’s grid electricity gets produced (ex. coal, nuclear, natural gas, renewables, or other). But even with a 100% coal grid, EVs still performed better.
How North Carolina benefits
Under Governor Roy Cooper’s administration, North Carolina has positioned itself well to benefit from this gigantic shift in the auto industry. By focusing on clear economic trends, and ignoring partisan critics, the Governor’s administration has racked up several important wins related to the EV shift.
First, the Governor’s economic development team landed a massive Toyota EV battery manufacturing plant, which is currently under construction in Randolph county. Since announcing the plant in 2021, Toyota has since doubled down on its ambitions, and now plans $6 billion in direct investment the plant, bringing several thousand new, high-paying jobs.
Then, the real bombshell: after decades of North Carolina leaders trying unsuccessfully to entice a major auto manufacturer to set up shop in the state, Governor Cooper’s team landed VinFast, a giant Vietnamese conglomerate with large ambitions of entering the U.S. EV market. The company broke ground on its Chatham county manufacturing site in June, with hopes to begin production in 2025. The company plans to hire several thousand workers directly at the plant, which analysts expect to stimulate several thousand more in indirect job creation.
The U.S. automotive market is undergoing a tectonic shift of not only technology, but its very market basis. North Carolina can take an advantage by continuing to secure investments by leaders of the automotive market of the future, and not pretending – as some less critics would like – that EVs are some sort of short-lived fad. The trends are clear for anyone to see – but only for those who want to look.
