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EV sales in the US have reached a tipping point -- all but assuring broad adoption

When a new technology -- any new technology -- reaches a threshold of 5 percent adoption it's widespread use becomes all but assured. It was true for electric lights, toaster ovens, telephones and the Internet. And now it's true for electric vehicles in the U.S.

The U.S., the world’s second largest car producer, has recently met that 5 percent tipping point.

Now, if the country is to follow the route of 18 countries that reached this point before it, it's poised to reach the destination of mass adoption, perhaps even a little ahead of schedule, according to a recent Bloomberg analysis.

This is especially welcome news because transportation represents around 30 percent of total greenhouse gas emissions in the U.S.

Over the last six months, EV car sales in the U.S. have ticked up to join Europe and China in moving beyond the 5 percent tipping point. At this rate, a quarter of all new car sales are projected to be electric by the end 2025, a year or two ahead of most major forecasts.

This 5 percent indicator is known as an s-shaped curve (and it's a shift that's been observed when most successful new technologies start their inevitable march toward dominating a market).

In the early adopter phase, sales are slow and erratic, but after reaching a certain tipping point, tend to speed up the curve with an accelerated horsepower. In the case of EV’s that certain point is 5 percent.

South Korea reached this point in 2021. Sales went up. The UK in 2020. Sales went up. China in 2018. Iceland in 2017. Norway in 2013. Sales went up with these countries passing or set to pass the 25 percent mark a few years after passing the 5 percent.

This sets a higher bar for hybrids. Bloomberg’s analysis only applies to cars that run solely on battery, because in some countries, especially in Europe, plug-in hybrids were quicker to be adopted due to the cars’ lack of need for infrastructure like charging stations and consumer awareness.

If hybrids were to be included however, the world just passed 20 million electric vehicles sales, a figure that will double by the end of next year according to a report by analysts at BloombergNEF. Nevertheless, the tipping point for hybrids come later in the game at 10 percent.

The U.S. hasn’t passed this 10 percent mark yet, with 17 countries already driving across the threshold. But looking at the numbers, hybrid’s tipping point may not matter as much for mass adoption, as the U.S. and China seem to have skipped the plug-in’s milestone and gone straight full-electric.

EV’s don’t self-drive themselves to these numbers. Behind every s-curve is a program of federal incentives and pollution standards. In the case of the US, last year Biden issued an executive order calling for half of new car sales to be electric by 2030. Following the 5-percent-projection, the country might arrive a few years early.

In addition to federal movement, growth also depends on the capacity and ability of car manufactures to increase EV production. As Bloomberg reports, Volkswagen, Ford, and BMW are each targeting 50 percent or more of their global sales to be fully electric by the end of the decade.

Carmakers have tipping points too, with European automakers for example, tripling sales two years after reaching 10 percent of electric quarterly sales.

So is the transition to EV’s inevitable? In short, despite all the graphs and calculations and tipping points we have, the answer to that vital question still has a foggy windshield.

90 percent of the world’s EV car sales currently come from the US, China, and Europe. Translated, countries with a third of global car sales in Latin America, Africa, and Southeast Asia have yet to reach the tipping point. If they do, it's unclear if global miners can keep up with the accelerated demand for battery metals.

Even so, global electric car sales have tripled in the last two years according to the International Energy Agency, a trend that BloombergNEF predicts will continue indefinitely.

When the tipping point analysis is applied to the entire globe, the share of fully electric vehicles worldwide passed the 5 percent threshold for the first time last year. If hybrids are plugged into the analysis, the 10 percent worldwide tipping point will be passed sometime next year. If the trend continues to navigate at this speed, EV adoption won’t be yielding any time soon.

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