Is the EV transition running out of charge?

As auto sales strengthen, sales of electric vehicles remain fairly soft; can hybrids bridge the gap?

Headshot of David Tinsley

David Tinsley

Headshot of Taylor Bowley

Taylor Bowley

January 2024

Key takeaways

  • Following the pandemic, global supply shortages meant that many consumers could not buy the vehicle they wanted, leading to a period of very low auto sales. The good news is that at the start of this year these problems appear largely resolved, and auto sales should remain strong given the pent up demand that has built up.
  • But one area of the market that still appears relatively soft, however, is electric vehicle (EV) sales. Bank of America internal data on new auto loan originations suggests that the share of EVs has recently flattened out, and BofA Global Research has revised down its forecasts for both sales of EVs and their market share.
  • A lack of affordability, limited choice and 'range anxiety' are likely key reasons for the relatively sluggish mass market EV adoption. But we remain optimistic: hybrid vehicles are bridging some of the gap to full EV transition, while the choice and affordability of EVs should improve from here.

Read our full analysis for a more in-depth look at these trends.