Despite recent setbacks in the American electric vehicle (EV) market, a new study by J.D. Power suggests a quick recovery is underway, with EV sales expected to bounce back strongly as early as next year. Following declines driven by vanished government incentives and scaled-back production plans, the report forecasts a noticeable uptick in new EV sales throughout 2027.
The study anticipates a temporary dip in EV market share from 9.4% to 8.2% in 2026, but projects a 15.6% year-over-year increase in EV sales nationwide the following year. This rebound would lift EV share back up to 9.3%, signaling a rapid market adjustment rather than prolonged stagnation.
The forecast then outlines a steady rise in electrification through the next two decades, expecting EVs—including both battery electric and plug-in hybrids—to command 18.1% of new vehicle sales by 2030, 36.8% by 2035, and over half (56.2%) by 2040. This trajectory remains more conservative compared to global forecasts, where EV market share is expected to hit 61.3% by 2035. The continued emphasis on hybrids suggests that many U.S. consumers will rely on a mix of technologies while balancing cost and infrastructure concerns.
Economic factors play a critical role in this anticipated resurgence. Ongoing instability in global oil markets, including conflicts affecting supply, has propelled gasoline prices above $4 per gallon on average. This fuel cost environment increases consumer interest in alternatives that reduce running costs, strengthening demand for EVs and boosting resale values for second-hand electric vehicles.
Interestingly, the report points out that Canada’s EV adoption patterns mirror those in the U.S. rather than Europe, offering insights relevant to upcoming emissions regulations and provincial mandates. While the broader light vehicle market is expected to grow modestly by 3% in 2026, EV sales may surge by more than 40%, increasing their combined powertrain share to over 13%. This momentum contrasts with some manufacturers’ recent caution, as legacy automakers adjust strategies and new EV models face varying market receptions.
The findings reflect a complex landscape marked by fluctuating consumer incentives, geopolitical factors, and evolving regulations. But altogether, they suggest that electric vehicle adoption in North America is poised to overcome recent hurdles and regain momentum sooner than anticipated.