Part of this slowdown is simply the increase in the year-over-year denominator; another part is the likely phaseout of government subsidies in the first half of the 2020s. At that point, Navigant Research expects growth to be around the low teens. Once BEVs cross the cost parity threshold with internal combustion engine vehicles (ICEVs), the market is projected to return to a faster pace of growth that is longer lived. This inflection is likely to occur around 2025, when battery pack prices drop to around $150/kWh. By 2026, Navigant Research expects PEV penetration to be between 7% (in the conservative scenario) and 11% (in the aggressive) of overall LDV sales.

—“Market Data: EV Geographic Forecasts”

California continues to lead the United States with strong PEV penetration. However, growth from Northeastern states should pick up soon, and quickly, with increased stringency of ZEV mandates and multiple state PEV purchase rebate programs.h

—Scott Shepard, senior research analyst at Navigant Research

To date, PEV populations have clustered in urban areas where census data indicates consumers have high levels of educational attainment and wealth, as well as driving patterns well-suited to the current class of PEVs. According to the report, this correlation is likely to weaken as the used PEV market develops and cheaper PEV offerings enable greater adoption among a wider range of vehicle owners.

Additionally, the expanding PEV population has wide-reaching implications for the electric power sector and key industry stakeholders looking to address the needs of this new class of vehicle owner.