Electric vehicles in the US: Another gold rush for everyone?

Detroit, April 2023

Electric vehicles in the US: Another gold rush for everyone?

Detroit, April 2023

rom today’s 6% EV market share to the single biggest EV opportunity after China. More than 30 million EVs sold cumulatively in the US by 2030. Higher growth rate than any other geography. In this second part of the EV study, we shed light on whether US EV actually constitutes a ‘gold rush’ opportunity for everyone. 

The race is on: Competition in the US EV market is quickly intensifying, but can anyone still unseat Tesla? 


(2018-2022, %)

1) VW earnings through Q3, 2022
Source: Tesla, Volkswagen AG, Ford, Berylls

Judging by today’s metrics, Tesla is well positioned to take advantage of the US’ EV growth potential. Tesla currently has a 63% share of the EV market including EV SUVs and displays superior profitability – the second biggest player (Ford) has a 6% share1. Tesla’s profit margin over the past 5 years has increased significantly, and now exceeds Ford’s and VW Groups’. This can be attributed to the growing economies of scale, new manufacturing technology (e.g., use of large castings), and smart insourcing of selected supply chain elements (e.g., battery manufacturing)15. Most importantly these margins now provide Tesla with breathing room for tactical price movements (e.g., see Tesla’s movements in China16). 

With the shared mission of unseating Tesla, OEMs are tripling the total number of EV models by 2025 and the number of OEMs offering EVs is set to double by 2030. The ICE leaders GM, Ford, Stellantis are also expected to grow massively in EVs. Volkswagen has bet the farm on them. And even EV-laggard Toyota is expected to play a key role with a projected EV market share in the 10 to 15% range. For all these contestants navigation of the specific needs of the US EV customer and geographical landscape is key to enhance EV profitability and unseat Tesla as the US EV leader.1 

Clinging to California is not enough: Do the easy part first

California is the market model: More EVs sold than in any other state, 34% of all 2022 US EV sales1,17, second highest charging point density of 128 points per 100,000 licensed drivers and the first state to introduce clean vehicle legislation in 1990. California’s success in the EV game can be attributed to early and continuous adoption of EV-forward policies and regulations18, public and private purchase incentives, and a vast charging infrastructure. To scale EV, manufacturers need to identify regions that follow the Californian model in optimizing the subsidy, infrastructure, and policy triangle. 

OEMs should focus on areas where the triangle is complete, which is rarely found at the state level so OEMs ought to go deeper to a regional level. When applying the triangle principle, OEMs should assess population density as it skews the charge point per population metrics. For example, the state of Washington has a small number of public chargers per licensed driver and limited state subsidies, but a high EV penetration rate, primarily due to a high density of chargers around Seattle and limited infrastructure throughout the rest of the state. The state of Colorado has higher number of chargers per licensed driver and more subsidies than Washington, but significantly lower EV market share, due to a smaller number of residents throughout the state and more dispersed pockets of EV infrastructure. In addition, city-level incentives like charging infrastructure subsidies and access to parking discounts (e.g., Sacramento)19 play a role at the municipality level. OEMs should also weigh the consumer demographic and psychographic differences within regions. For example, Chicagoland (Cook County plus surrounding counties) residents live in more densely populated areas and, on average, have a higher income than downstate Illinois20. OEM’s segmentation of target markets needs to go deeper than state level to reflect local particularities in population make-up and public support. 


(2021, by state)

Source: Alliance for Automotive Innovation, WLRN, Berylls 

Made in America: The Inflation Reduction Act will further amplify the local-for-local US EV market. 

Looking beyond cities and regions, both the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) will have a profound effect on the EV landscape nationwide with over $100bn in total investment – nearly 30x more than government investment to date21. While the BIL will significantly boost nationwide EV infrastructure and grid upgrades, the IRA has more direct implications for OEMs and consumers. With the IRA, OEMs have access to both consumer and production-related incentives, which are conditional on their supply chain and production setup as well as pricing policy. For consumer tax credits, incentive eligibility is conditional on vehicle price, battery mineral sourcing, and battery production and vehicle assembly location. For production incentives22, eligibility is based on production profile for each individual project (e.g., for the Advanced Manufacturing Production Credit, eligibility hinges on production of battery cells or modules with a capacity-to-power ratio not to exceed 100:1)23. 


(by affected value chain element)

1) Lithium iron phosphate batteries; an alternative battery chemistry option for customers to in addition to Ford’s existing nickel cobalt manganese (NCM) battery option
Source: The Inflation Reduction Act of 2022, US Department of Energy, Reuters, Alliance for Automotive Innovation, Ford, Berylls

The IRA has an impact on the automotive landscape on the macro and micro level. At the micro level, players will need to make a choice whether to increasingly focus on the US market to access funding (e.g., Hyundai has announced acceleration of EV plant construction in Georgia and reconfigured its battery supply chain). At the macro level, other countries (especially the EU) will need to compete with the US to attract local production (e.g., Tesla scaled down plans for Berlin production in favor of the US because of IRA incentives24; VW announced the ramp-up of a battery plant in Canada)25. The IRA is expected to necessitate stronger local and regional presence and OEMs will need to reevaluate their global production value chain. 

Network of networks: New players in the US EV market need a strong [dealer] partner in the US to survive. 

The US automotive market is dealer-dominated. Franchise law protects dealer access to the market. Although Tesla has managed to implement its direct sales model in some states, realization of direct sales will continue to be contested (see e.g., Tesla v. the State of Louisiana), more cumbersome for new entrants (e.g., entry needed to happen before 2015 in Georgia) and allow a ‘patchwork footprint’ at best. Direct sales regulation will also continue to evolve – with the regulation of EV infrastructure and connected services sales still to be defined. 

Considering customers’ education and perception gap, the complexity of the regional US landscape and the vast (aftersales) footprint to be serviced, OEMs need to closely examine the tradeoff between going fully direct and being able to depend on a strong (dealer) partner to really cover a market and bridge the gap to the customer.


(2021, extent to which direct sales are permitted in the respective state)

Source: National Conference of State Legislatures, Berylls

So what? Now what?

The question for OEMs, suppliers, dealers and other automobility players is one of how not if to participate in the US EV market. The US will become the second biggest single EV market by 2030 and will be growing faster than any other region. The specific demands of US customers (e.g., emphasis on fuel economy, residual value, TCO) will necessitate a US-centric (SUV) product strategy, which goes beyond derivatives of Europe/Asia-focused platforms.

New entrants and niche manufacturers face the additional complexity of having to realize sufficient volumes of such local products for scale economies, while keeping the costs of ramping-up the supporting sales/after-sales footprint to a minimum. The price sensitivity of US customers coupled with the superior profitability of the current market leader Tesla and stringent localization requirements for securing IRA subsidies will make demystifying the IRA and the configuration of EV value chains a key success factor. The heterogenous regional policy, infrastructure and customer regional US landscape favor the cooperation with a strong local partner. The Inflation Reduction Act is the United States’ holistic answer to other nations’ industrial policy. Succeeding in the US EV market beyond its niche existence will necessitate similarly holistic strategies of new and incumbent players alike.

Source: Berylls

You missed the first part of the blog article? Click here to read part 1.


1 Berylls Strategy Advisors analysis and extrapolation including (among others) sales data from S&P Global Mobility Light Vehicle Sales April 2022 as well as production nameplate and propulsion system design data from S&P Global Mobility Automotive Light Vehicle Transmission + Engine Forecast, April 2022.

15 Lienert, P., & White, J. (2023, January 19). Analysis: Tesla uses its profits as a weapon in an EV price war. Reuters.

16 Reuters. (2023, February 16). Tesla raises prices of some Model Y versions in China. Reuters. 

17 Sales figure from Source 1, State sales share from: Alliance for Automotive Innovation. (2022, December 21). Electric Vehicle Sales Dashboard. Retrieved from Alliance for Automotive Innovation: https://www.autosinnovate.org/resources/electric-vehicle-sales-dashboard.

18 1990 Low Vehicle Emissions regulation to 2022 Advanced Clean Cars regulation 

19 City of Sacramento. (n.d.). Electric Vehicle Parking. Retrieved from City of Sacramento: https://www.cityofsacramento.org/Public-Works/Parking-Services/Discount-Programs/Electric-Vehicle 

20 Chicago Metropolitan Agency for Planning. (2022). Cook County Community Data Snapshot. Retrieved from https://www.cmap.illinois.gov/documents/10180/102881/Cook%2B-%2BALL.pdf/02b2d251-63e3-bcec-fe0f-4788f681d4af?t=1659382994909 

21 Burget, S. (2022, September 2). EV eligible funding in IIJA and IRA represents nearly 30 times the total EV funding awarded by U.S. government to date. Atlas Public Policy EV Hub. 

22 E.g., Advanced Manufacturing Production tax credit, Advanced Energy Project Credit, Advanced Technology Vehicle Manufacturing DOE loans, and Domestic Manufacturing Conversion Grants 

23 Bloomberg Tax. (2022). Sec. 45X. Advanced Manufacturing Production Credit. Internal Revenue Code.  

24 Reuters, Automotive News. (2023, February 21). Tesla scales back German battery plans, won over by U.S. incentives. Retrieved from Automotive News: https://www.autonews.com/automakers-suppliers/tesla-scales-back-german-battery-plant.

25 Schwartz, J., & Waldersee, V. (2023, March 13). Volkswagen picks Canada for first battery cell plant outside Europe. Retrieved from Reuters: https://www.reuters.com/business/autos-transportation/volkswagen-build-first-north-american-battery-cell-plant-canada-2023-03-13/.

Andreas Radics

Executive Partner

Arthur Kipferler


Martin French

Managing Director US

Henning Ludes

Associate Partner

Cameron Gormley

Senior Consultant

Samuel Schramm


Henning Ludes

Henning joined Berylls in 2018, is an Associate Partner at the Berylls Group and is currently completing a regional assignment in Detroit to further expand our local footprint. Henning particularly focuses on topics at the interface of new business development, go-to-market strategies, sales as well as organizational transformation. He has advised automotive manufacturers, suppliers and investors on a global scale.

As an MSc. Management graduate, Henning has completed his education at WHU – Otto Beisheim School of Management (Germany), Kellogg School of Management, Northwestern University (United States) and Warwick Business School (United Kingdom).

Cameron Gormley

Cameron Gormley joined Berylls Strategy Advisors US in July 2022 as a Senior Consultant. Cameron has deep knowledge of the US electric vehicle (EV) infrastructure, policy, and regulatory landscape and its role as a key driver of EV penetration.  He advises clients on topics of electrification strategy and business model development across all vehicle segments. Other areas of expertise include market analysis, go-to-market strategy, strategic planning, customer strategy, and PMO.

Cameron received a Bachelor of Science in Mechanical Engineering at Western New England University (2015) and holds a Project Management Professional (PMP) certification (2021).

Martin French

Martin French has over 20 years of experience in automotive OEM and tier 1 suppliers with various high-profile international leadership, product development, operational, program management, strategic & business development roles. In 2012, after holding various senior management positions, he was appointed Global Vice President Customer Group at Webasto where he led the global business transformation for their US based customers.

Martin joined Berylls Strategy Advisors as Managing Director in 2019 and leads the Berylls office in Detroit, USA. His consulting focus is Automotive Suppliers & OEMs, Corporate Strategy & Business models, M&A, Restructuring & New Business Development.

Martin studied Production & Mechanical Engineering at Oxford Brookes University. He has lived in Michigan, USA, since 2012.