In 2024, the U.S. automotive market saw solid growth in electrically powered vehicles (BEVs and HEVs), while ICEVs (internal combustion engine vehicles) still dominated the market.
Strategies to meet diverse consumer needs are becoming increasingly important for manufacturers.
This article reviews trends in 2024 based on the latest data and analyzes changes in the market expected in 2025.
U.S. Automotive Market by 2024: Sales Trend of Electric Vehicles (BEVs and HEVs)
In 2024, monthly sales of battery electric vehicles (BEVs) showed growth over the previous year, reaching 130,000 units (8.5% of all vehicles) in December.
Tesla maintains its position as the dominant leader in BEVs with a 47.7% share of BEV sales.
Meanwhile, Ford, GM, and the Koreans (Hyundai and Kia) also increased competition, while infrastructure development and government subsidies boosted growth.
(bar graph: sales (left axis); line graph: ratio (right axis))
Sales of hybrid electric vehicles (HEVs) totaled 171,000 units (11.1% of all vehicles) in December, recording a higher percentage than BEVs for the full year.
This growth can be attributed to fuel cost savings and convenience in areas where charging infrastructure is underdeveloped.
Toyota, in particular, leads the HEV market, accounting for about half of the U.S. market share.
HEVs are gaining traction as “a realistic option for consumers who are cautious about transitioning to electric vehicles”.
(bar graph: sales (left axis), line graph: ratio (right axis))
(bar graph: sales volume (left axis); line graph: ratio (right axis))
ICEVs (internal combustion engine vehicles) still dominate the market share
Even as the electric vehicle market continues to grow, ICEVs will still account for about 80% of the U.S. market in 2024.
(bar graph: sales (left axis), line graph: ratio (right axis))
Demand is particularly strong in segments such as pickup trucks and large SUVs, where practicality is more important than fuel efficiency.
Typical models include Ford’s F-series and GM’s Silverado.
Although BEV versions are also offered for these, the ICEV version continues to be the mainstay of sales.
This is due to the vast geography and lifestyle of the United States, as well as the lack of charging infrastructure in some areas.
Quote from Ford Official HP
Quote from GM Official HP
Nissan’s Struggles in the U.S. Market: Lack of HEV Lineup Not Enough
Nissan is often talked about these days, but as many of you know, it continues to struggle in this U.S. market.
The often noted “lack of HEV lineups” is a factor, but it is not the only problem.
Certainly, Nissan’s strategy of focusing on BEVs such as the Leaf and Aria while Toyota and Honda are showing strength in the HEV market has backfired in some respects.
If HEVs were in the lineup, it might have been expected to boost sales volume.
However, Nissan’s challenges are as diverse as the following
- Challenges for Dealer Networks
- Decline in price competitiveness
- Weakening of brand image
Sales of ICEVs (Altima, Rogue, etc.) have also been slow compared to the competition.
Even with the introduction of HEVs, if these structural issues are not resolved, it will be difficult to reel in the U.S. market.
Market Forecast to 2025: Impact of the Trump Administration and Elon Musk
In 2025, the environment surrounding the BEV market is expected to change with the advent of the Trump administration.
Specifically, the following points are noteworthy
- Impact of the Trump Administration
The removal of subsidies for BEVs and deregulation is expected to support the oil industry and lower gasoline prices.
This move could again boost demand for ICEVs. And HEV demand is also expected to remain strong.
- Impact of Elon Musk
Although the aforementioned BEV subsidy removal will be implemented, Tesla already retains strong price competitiveness and is unlikely to be affected by the subsidy removal.
On the other hand, through its participation in the “Ministry of Government Efficiency,” it is possible that Tesla may take measures to protect the BEV market to some extent.
Basically, Trump is promoting measures that strongly imply an “America First” policy.
Past administrations have also relaxed fuel standards and supported the petroleum industry, and based on this, there may be an emphasis on creating jobs while protecting domestic industry.
If it can create a large number of jobs in the U.S., there may be a possibility to invite, for example, BYD’s factory to the U.S. (subject, of course, to the elimination of various risks, such as economic security).
At this point, I do not see this being actively pursued given the Trump administration’s policy of emphasizing economic competition with China, but I do not think it is a story that can be completely ruled out.
It is expected that the policies I have described will continue to be launched one after another, based on the “America First” policy, without being bound by preconceived notions.
Domestic and foreign automakers and investors (and us, of course) are paying close attention to market trends.
(Added January 30)
After publishing this article, the U.S. Department of Transportation announced the issuance of the following memorandum of understanding.
The points are as follows
1.“removing regulatory barriers to motor vehicles access”;
2. “ensuring a level regulatory playing field for consumer choice in vehicles”;
3. “terminating, where appropriate state emissions waivers that function to limit sales of gasoline-powered automobiles”; and
4. “considering the elimination of unfair subsidies and other ill-conceived goverment-im-posed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable.” Executive Order 14154, “Unleashing American Energy,” § 2.
(Quoting from a portion of the memorandum)
In other words, the U.S. has no intention of eliminating BEVs, but rather is saying, “Let BEVs and ICEVs compete on the same footing.
For Elon Musk, Tesla is already competitive enough, and he may decide that he can compete on the same playing field.
(although some say that Musk is already focusing less on cars and more on xAI to begin with)
Conclusion: Responding to the progress of electrification and diverse demands
The U.S. market in 2024 showed the reality that ICEVs will remain the mainstay of the market while BEVs and HEVs will continue to grow.
In 2025, policy shifts and changes in the competitive environment will force manufacturers to seek diverse strategies.
Long-term investment, especially in BEV growth, and a flexible approach to address short-term high demand for HEVs and ICEVs, should be the key to securing competitive advantage.
The company must develop well-balanced products and services while accurately identifying the diverse needs of consumers.
This is not an easy task, but making the right decisions through continuous dialogue with the market and data will be an integral part of success.
Blue Sky Technology conducts a variety of market research related to automobiles.
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This article was written by.
SASAKI Yusuke
Manager, Blue Sky Technology Inc.
