Why the EV Dream May Be Crashing in America

I have bad news for all of you on the waiting list for the all-electric Maserati MC20 Folgore. It’s been sunset before even seeing daylight. After five years of development, Stellantis (which owns Maserati) decided there wasn’t enough demand to justify production.

Even with its $260,000 price tag and would-be owners with fancy garages and built-in charging stations.

Of the 15.9 million cars sold in the US in 2024 — the highest since 2019 — only 8 percent (1.3 million) were EVs. Even that depended in part on government incentives of $7,500 for new EVs. Those subsidies are now in jeopardy.

President Trump’s “Unleashing American Energy” Executive Order signed on January 22, 2025 says it will eliminate the EV mandate, potentially putting EV subsidiaries on the chopping block. That EO also will also remove funding for building EV charging stations. If that happens, analysts report that demand for EVs will decline by 28% between now and the end of the decade.

No incentives to defray higher purchase prices — even before potential tariffs raise the price of new cars — and fewer charging stations create an untenable market dynamic that could push the EV industry into reverse.

This all paints a starkly different future for electric cars in America than previously imagined.

The Promise vs. Reality

When Tesla’s Roadster first hit streets in 2008, it abruptly changed the narrative about automotive innovation and American ingenuity. This software-powered vehicle put traditional manufacturers on notice that environmentally friendly cars could also be beautiful, high-performing and accessible. Optimistic forecasts predicted a swift transition from fossil fuels to electric, and manufacturers worldwide began retooling plants to compete. Government subsidies and mandates primed the pump. Early adopters loved them for their fuel efficiency, good looks, lower cost of ownership and low carbon footprint — not to mention the $7,500 subsidy if they bought one. Some wanted to help save the planet.

Yet today, America’s EV revolution finds itself caught in the middle of a potential platform misfire — driven not by a single fatal flaw, but by what appears to be fundamental misalignments in what’s required to ignite complex, multi-sided ecosystems.

At its core, the EV industry in the U.S. represents a classic multi-sided market — a business ecosystem that requires the right incentives for multiple distinct user groups to participate simultaneously, agree on standards and compete on features and products, not proprietary standards and government subsidies. When these elements fail to align, the entire system sputters.

Today, manufacturers develop vehicles with different battery capabilities and ranges. Charging networks deploy incompatible standards, creating consumer uncertainty about where to charge. Not everyone has a garage for overnight charging.

Most importantly, the sparseness of charging stations makes consumers nervous. Their charge anxiety is intensified because of the still-limited battery ranges of most EVs.

Perhaps no factor better illustrates the EV movement’s vulnerabilities than its failure to establish unified charging standards. Unlike what makes a credit or debit card riding the Visa and Mastercard rails worldwide work anywhere it is presented, EV manufacturers and charging networks have pursued proprietary solutions that fragment the ecosystem.

America’s EV revolution finds itself caught in the middle of a potential platform misfire driven by fundamental misalignments in what’s required to ignite complex, multi-sided ecosystems.

Tesla’s Supercharger network, long considered the gold standard for user experience, remained closed to non-Tesla vehicles until recently. Even as the industry gradually converges toward the Combined Charging System (CCS) standard, implementation inconsistencies create friction. Non-Tesla vehicles produced before 2025 require adapters. Some stations require specific apps, while others accept credit card payments directly.

A Tesla driver approaching a non-Tesla station must navigate compatibility questions gas vehicle drivers never consider: Does this station support my vehicle? Will I need an adapter? How do I pay? The problem for Tesla drivers is that they can’t use anyone else’s charging station easily, so they are limited to the still-small Tesla network.

For most, the result can be a staggering array of competing, non-interoperable connector types, protocols and even payment systems.

This fragmentation creates friction for potential adopters already hesitant about getting behind the wheel. That only deters rather than ignites the innovation necessary for mass-market consumption beyond the early adopters willing and able to play through the proverbial bumps in the road.

In some ways, it’s analogous to the bad old days of wondering if a consumer’s preferred way to pay would be accepted by their favorite merchant. And when merchants had to pay for and support multiple terminals at the physical and virtual points of sale to process different payment methods, or risk losing a customer.

More interesting, perhaps, is that we have seen this movie before. And in this country.

What the 2020s Can Learn from the 1910s

The first electric car in the U.S. isn’t the Tesla in 2008, but a wagon that took to the streets in Des Moines Iowa in 1890-1891.

The inventor, William Morrison, basically electrified the horse-drawn carriages of that time. This souped-up rig could carry six passengers and cruise at a top speed of 14 mph.

Electric carriages were a hit.

Unlike its gas-powered competitors at the time, these babies didn’t require a dangerous hand-crank to get them going, or longer warm-up times before they could be driven, especially in winter. They came with fancy interiors and were bought and driven mostly by the more affluent members of society at the time — especially women. The range, reported to be nearly 100 miles, wasn’t a problem because they were mostly used to travel short distances around town.

There were infrastructure issues to overcome: an inadequate power supply and a paucity of battery charging stations. Private companies and consortia came together to create battery exchanges and subscription business models to support the delivery of a fast refill — sort of a mobile charge-and-go service. All batteries worked in all cars.

The electric wagon’s success was short lived.

Paved roads and interstate highways created the demand for cars with longer driving distances and faster speeds. The discovery of plentiful petroleum reserves and advances in the automotive production process eliminated some of the design and operational frictions of the circa-1900 gas-powered cars. They became cheaper to produce, cheaper to buy and operate. They gave consumers the freedom to hit the road. And consumers bought them. Most of the EV car manufacturers stopped production of their cars in the 1910s.

The Battery Range Reticence

One hundred and fifteen years later, it’s funny to see how the EV industry is facing some of the same fundamental challenges and constraints.

The range reticence of the 1910s when consumers were ready to put pedals to the metal and explore the world in their cars has become “range anxiety” today.

Although critics dismiss this as overblown, the fear of running out of power without convenient charging options reflects legitimate infrastructure gaps in the EV ecosystem.

The average American driver has grown accustomed to gassing up in under five minutes at over 145,000 gas stations nationwide, usually in convenient locations, each of which has a number of pumps. By comparison, there are roughly 53,000 EV-friendly stations across the country — with 130,000 charging ports — and they’re unevenly distributed and not so easy to find. This creates enormous uncertainty, which increases anxiety.

The fear of running out of power without convenient charging options reflects legitimate infrastructure gaps in the EV ecosystem.

As critically, it takes a long time to power up. Even fast chargers typically require 30-45 minutes to restore 80% battery capacity — an eternity compared to gasoline refueling. For apartment dwellers and those without dedicated home charging or an office parking lot with adequate charging stations, this becomes a big time-suck. It requires planning and a level of friction that could ultimately become a barrier to consumer adoption and EV industry scale.

Of course, this would be no big deal if batteries delivered longer driving ranges. But battery technology, while improving, continues to fall short of consumer expectations shaped by their gas-powered cars and trucks.

Current lithium-ion technology represents an uncomfortable compromise between range, charging speed, weight and cost. And resource limitations further complicate scaling. The International Energy Agency estimates that meeting global EV targets would require a 40-fold increase in lithium production by 2040, and they assume massive increases in production of cobalt, nickel and rare earth elements. Supply chains for these materials face increased geopolitical risks, now in particular given China’s role as a top supplier of lithium.

All these things make EVs impractical as primary vehicles for many American families right now. Long road trips require careful planning around charging availability. These practical limitations restrict the addressable market primarily to multi-car households with single-family homes where charging stations can be installed and accessed.

The Infrastructure Conundrum

Before the advent of electronic medical records, a patient wanting to get a second opinion or in need of  a specialist had to run all over town collecting physical, paper copies of her medical records. Manilla folders dominated doctor’s offices and were anything but interoperable, private or efficient. The lack of sharable, digital files created delays, waste and, in some cases, adverse medical outcomes.

President Obama signed the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009 as part of the Affordable Care Act. HITECH earmarked $27 billion to accelerate the adoption of electronic medical records by physicians in the U.S. Physicians could qualify for up to $44,000 in Medicare incentives or $63,750 in Medicaid incentives over six years by demonstrating “meaningful use” of the technology. In 2008, only 9% of hospitals had comprehensive EMRs. Less than a decade later, according to the Department of Health and Human Services, the adoption of EMR systems had grown to 96%.

EMRs have become the digital backbone for innovations in the digitizing and sharing of permissioned patient information, and the integration of new capabilities like GenAI that create new efficiencies for doctors and patients. Yet without the government push, and incentives for the providers who had to adopt and use them, we’d still likely be treading fragmented-paper-medical-records water today.

The need for developing a robust charging infrastructure for EVs in the U.S. presents a similar chicken-and-egg conundrum: Who steps in to build capacity for a critical mass of vehicles that don’t yet exist?

This chicken-and-egg dilemma affects the entire market.

Private charging networks face daunting economics while utilization rates remain low during the early adoption phase. Unlike gas stations that serve virtually all vehicles on the road, charging stations currently cater to a small fraction of the cars on the road in the U.S.

Major electric utilities face similar dilemmas in grid infrastructure. Many residential neighborhoods lack capacity for multiple households simultaneously charging high-draw EVs. Commercial fast-charging hubs often require expensive grid upgrades, sometimes costing millions before the first vehicle charges.

The federal government’s $7.5 billion investment through President Biden’s Infrastructure Investment and Jobs Act is an  insufficient down payment on the estimated $40 billion needed for a comprehensive national charging network. More concerning: deployment has lagged, with only a fraction of planned stations operational years after funding allocation. Two years post-funding, only 8 charging stations were up and running, Analysts say that the $7.5 billion should have been enough to open 5,000 charging stations with 20,000 spots.

Yet, without a critical mass of EVs in an area, it’s challenging to strategically place charging stations. Yet without reliable charging access, consumers hesitate to purchase EVs.

This chicken-and-egg dilemma affects the entire market because consumers anywhere can purchase electric vehicles. But without a critical mass of charging stations, or at-home charging access, they face uncertainty about charging availability where they want to drive their vehicles.

Breaking this cycle, therefore, requires substantial upfront investment to establish a critical mass of charging stations, which would then energize EV adoption. The elimination of EV subsidies for charging stations and consumer purchases will create a disincentive for automotive manufacturers to rachet up EV production. Private markets would invest in creating charging stations, just as they did in developing gas stations, if they anticipated enough demand. But with EV purchasing stalled, no one is taking that risk.

We may be at the tipping point where the EV industry in the U.S. goes into a doom loop for now.

Already, uneven levels of consumer interest have caused automakers to pull back on their EV ambitions. That will further depress investment in charging stations. And the beat goes on.

The Automaker’s Dilemma

Automakers find themselves in an increasingly precarious position, having committed hundreds of billions to EV development only to face disappointing sales. Although declaring their commitment to the market, major manufacturers have been canceling projects and extending implementation timelines.  Battery maker Clarios decided to postpone its plans to IPO in the U.S. because of the lack of clarity in infrastructure investment related to EVs.

Ford has put its electric SUV on hold and cut its EV development budget by $12 billion. Mercedes-Benz, which originally planned for 50% EV sales by 2025, now targets 2030 and only “where market conditions allow.” Currently, EVs account for less than 7% of their U.S. sales. Volkswagen has reduced plans for six global battery factories to potentially just three, they say based on market conditions.

As manufacturers reduce investments, charging networks see less potential demand, further slowing infrastructure development. Consumers, sensing hesitation from industry players, become even more reluctant to make an expensive purchase that they will have to live with for six, seven, eight years or even longer.

Cracking the EV Chicken and Egg

Today, the EV movement stands at a critical crossroads.  Manufacturers scaling back investments, charging networks struggling to build a business case, and hesitant consumers create a self-reinforcing cycle of retreat.

Yet history shows these multi-sided market challenges can be overcome. The payment card industry transformed global commerce by solving similar problems through collaboration and standards.

In the early days of credit cards, banks recognized that no single institution could create sufficient network effects independently. This realization led to collaborative standards. Visa and Mastercard established shared protocols while allowing competition at consumer and merchant levels.

The path forward requires acknowledging a fundamental truth: in multi-sided markets, the ecosystem succeeds together or fails together.

Crucially, these networks recognized that all sides of the market needed simultaneous incentives. Merchants benefitted from more consumers with cards to pay for purchases at their stores and consumer access. Consumers gained convenience and universal acceptance. Issuing banks earned fees while managing customer relationships. The system worked because it aligned incentives across all participants.

For EVs to succeed, the industry needs to focus less on individual advantages and more on industry-level outcomes. Otherwise, electric vehicles risk remaining a luxury niche rather than the transportation revolution once promised.

The path forward requires acknowledging a fundamental truth: in complex multi-sided markets, the ecosystem succeeds together or fails together. The sooner the EV industry at large embraces this reality, the greater its chances of breaking free from its impending doom loop and building sustainable momentum toward widespread adoption.