It is no surprise that the automotive industry can be unpredictable. Emergent concerns about the imposition of tariffs on Mexico and Canada, in addition to efforts to compete with China, contribute to a sense that the auto market is in a constant state of chaos. For manufacturers, whether it’s finding a way to meet consumer preferences, improving supply chain resiliency, or lowering costs, navigating the news cycle can feel like a constant grind—particularly in a new market like electric vehicles.

In some respects, the data backs this up. We are truly in a moment of transformation, and short-term market shocks may create uncertainty. Companies—whether they be battery manufacturers, automakers, recycling firms, or others along the supply chain—that can find a way through the short-term rough patches will be best positioned in this shifting U.S. car market.

Despite the noise, the data reveals an evident trend: alternative vehicle drivetrains like battery-electric vehicles, plug-in hybrids and traditional hybrids, are on the rise.

New data from Edmunds highlights how dramatically sales are shifting here in the US. In 2015, these alternative drivetrains made up just 2.2% of all U.S. new car sales. By 2024, these vehicle types surged to represent 19.2% of all new car sales—the market share of all alternative drivetrains increased by over eight times in just a decade’s time.

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The bulk of the remaining market has been filled in by two drivetrain types: battery-electric vehicles (BEVs) and conventional hybrids (HEVs). Plug-in hybrid electric vehicles (PHEVs) make up a small portion of the U.S. car market—and there are no immediate vehicles available this year that are likely to change that dynamic.

If U.S. companies are considering investing in a growing share of the pie instead of remaining exposed to the purely ICE vehicle market—whether through BEVs, PHEVs, or HEVs—batteries will have to be a part of that equation. 

The market for vehicles equipped with batteries is growing quickly, particularly on a compound annual growth rate (CAGR) basis.

Since 2015, BEVs and PHEVs have grown by the fastest CAGR—at 42%. Hybrid vehicles, no slouches either, grew by about 19%. By the end of 2024, according to Edmunds, hybrids had reached about 1.5 million units sold, while BEVs hit 1.2 million units sold in the US. PHEVs, meanwhile, reached just under 300,000 units. 

While these newer drivetrain markets are rapidly growing, combustion engine vehicle sales declined by a CAGR of 3% from 2015 to 2024.

The road ahead won’t necessarily be an easier one for this market to travel. Outside stakeholders need to create a stable environment to react to this changed U.S. landscape, whether it’s by reinforcing supply chains, building out charging infrastructure, or developing new battery technologies. Consumers deserve nothing less.