The US is passing the tipping point for electric cars

Many people of a certain age can remember the first time they held a smartphone in their hands, reports Bloomberg. The devices were weird and expensive and original enough to attract party crowds. Then, less than a decade later, it became unusual not to have one.

That same shift in society is now happening with electric vehicles, according to a Bloomberg analysis of adoption rates around the world. The US is the latest country to pass what has become a critical turning point for electric cars: 5% of new electric car sales. That threshold marks the start of mass adoption of electric vehicles, a period in which technology preferences are changing rapidly, according to the analysis.

Over the past six months, the US along with Europe and China – collectively the three largest auto markets – have surpassed the 5% inflection point. If the US follows the trend set by 18 countries before it, a quarter of new car sales could be electric by the end of 2025. That would be a year or two ahead of most big forecasts.

Why is 5% so important?

Most successful new technologies—electricity, televisions, cell phones, the Internet, even LED light bulbs—follow an S-shaped adoption curve. Sales move slowly in the early adopter phase, then surprisingly quickly when things get overwhelming. (The top of the S-curve represents the last naysayers who refuse to give up their old cell phones).

In the case of electric vehicles, 5% appears to be the point where early adopters are overtaken by mainstream demand. Before that, sales tend to be slow and unpredictable. Then demand accelerates rapidly.

It stands to reason that countries around the world will follow similar patterns of electric vehicle adoption. Most of the obstacles are universal: there aren’t enough public chargers, the cars are expensive and in limited supply, buyers don’t know much about them. Once the way is paved for the top 5%, the masses soon follow.

So South Korea’s adoption curve from 2021 ends up looking very similar to China’s in 2018, which is similar to Norway after its 5% first quarter in 2013. The next big car markets approaching the tipping point this year include Canada, Australia and Spain.