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Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles and Opportunities

Author

Listed:
  • James E. Archsmith
  • Erich Muehlegger
  • David S. Rapson

Abstract

This paper identifies and quantifies major determinants of future electric vehicle (EV) demand in order to inform widely-held aspirations for market growth. Our model compares three channels that will affect EV market share in the United States from 2020-2035: intrinsic (no-subsidy) EV demand growth, net-of-subsidy EV cost declines (e.g. batteries), and government subsidies. Geographic variation in preferences for sedans and light trucks highlights the importance of viable EV alternatives to conventional light trucks; belief in climate change is highly correlated with EV adoption patterns; and the first $500 billion in cumulative nationwide EV subsidies is associated a 7-10 percent increase in EV market share in 2035, an effect that diminishes as subsidies increase. The rate of intrinsic demand growth dwarfs the impact of demand-side subsidies and battery cost declines, highlighting the importance of non-monetary factors (e.g. charging infrastructure, product quality and/or cultural acceptance) on EV demand.

Suggested Citation

  • James E. Archsmith & Erich Muehlegger & David S. Rapson, 2021. "Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles and Opportunities," NBER Working Papers 28933, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28933
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    Cited by:

    1. Epstein, Lucas & Muehlegger, Erich, 2024. "Ideology, Incidence and the Political Economy of Fuel Taxes: Evidence from California 2018 Proposition 6," Institute of Transportation Studies, Working Paper Series qt6k58771s, Institute of Transportation Studies, UC Davis.
    2. David Rapson & Erich Muehlegger, 2023. "Global Transportation Decarbonization," Journal of Economic Perspectives, American Economic Association, vol. 37(3), pages 163-188, Summer.
    3. Nico Brinkel & Thijs Wijk & Anoeska Buijze & Nanda Kishor Panda & Jelle Meersmans & Peter Markotić & Bart Ree & Henk Fidder & Baerte Brey & Simon Tindemans & Tarek AlSkaif & Wilfried Sark, 2024. "Enhancing smart charging in electric vehicles by addressing paused and delayed charging problems," Nature Communications, Nature, vol. 15(1), pages 1-10, December.
    4. Kristoffersson, Ida & Pyddoke, Roger & Kristofersson, Filip & Algers, Staffan, 2024. "Access to charging infrastructure and the propensity to buy an electric car," Working Papers 2024:4, Swedish National Road & Transport Research Institute (VTI).
    5. Kear, Sarah & Marangon Lima, Luana M. & Kittner, Noah, 2025. "Charging forward: A greenhouse gas emissions analysis of New York State's electric vehicle and clean energy goals," Energy Policy, Elsevier, vol. 201(C).
    6. Muehlegger, Erich & Rapson, David S., 2022. "Subsidizing low- and middle-income adoption of electric vehicles: Quasi-experimental evidence from California," Journal of Public Economics, Elsevier, vol. 216(C).
    7. Yazhi Song & Yin Li & Jingjing Jiang & Bin Ye, 2025. "The industrial prospect of electric vehicles—time delay stochastic evolutionary game evidence from the U.S., China, the EU, and Japan," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-17, December.
    8. Andri Ottesen & Sumayya Banna & Basil Alzougool, 2022. "Attitudes of Drivers towards Electric Vehicles in Kuwait," Sustainability, MDPI, vol. 14(19), pages 1-16, September.
    9. David S. Rapson & James B. Bushnell, 2022. "The Electric Ceiling: Limits and Costs of Full Electrification," NBER Working Papers 30593, National Bureau of Economic Research, Inc.
    10. Akhtar, Muhammad Usman Saeed & Asfand, Faisal & Mishamandani, Arian Shabruhi & Mishra, Rakesh & Khan, M. Imran, 2025. "Hydrogen as a sustainable combustion fuel: Performance, challenges, and pathways for transition to low-carbon propulsion systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 223(C).
    11. Winikoff, Justin B., 2024. "Economic specialization, infrastructure, and rural electric vehicle adoption," Energy Policy, Elsevier, vol. 195(C).
    12. Akhtar, Muhammad Usman Saeed & Asfand, Faisal & Khan, M. Imran & Mishra, Rakesh, 2025. "Assessment of geometric variations on efficiency and emissions of a Hydrogen–Diesel dual-fuel engine using CFD approach," Energy, Elsevier, vol. 335(C).
    13. Askill H. Halse & Karen E. Hauge & Elisabeth T. Isaksen & Bjørn G. Johansen & Oddbjørn Raaum, 2025. "Local Incentives and Electric Vehicle Adoption," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(1), pages 145-180.
    14. Gøril L. Andreassen & Jo Thori Lind, 2024. "Climate, Technology and Value: Insights from the First Decade with Mass-Consumption of Electric Vehicles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(7), pages 1783-1844, July.
    15. David Austin, 2023. "Modeling the Demand for Electric Vehicles and the Supply of Charging Stations in the United States: Working Paper 2023-06," Working Papers 58964, Congressional Budget Office.
    16. Guo, Yan & Fraser, Timothy & Silveira, Semida, 2025. "The role of financial incentives in promoting electric light commercial vehicles in the United States," Energy Policy, Elsevier, vol. 199(C).
    17. Connolly, Rachel & Coffee, Daniel & Pierce, Gregory, 2025. "Do electric vehicle purchase incentives drive equity? The relationship between incentive policies and vehicle registration rates across California," Transport Policy, Elsevier, vol. 170(C), pages 193-206.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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