Energy Transition in the United States

Throughout history, humans have transitioned their energy sources to more efficient and cleaner forms. Much of this transition historically was either due to depletion of the current energy source, or the discovery of an abundant and more energy-dense source. The current driver for transitioning away from carbon-based energy began in the late 20th century.   

From prehistoric times until the mid-1700’s, wood was the dominate source for humans’ energy needs. During the industrial revolution, beginning in the late 1700’s, deforestation and the need for a more energy-dense material resulted in wood being replaced with coal. Coal was to dominate the energy sector for the next 200 years. Natural gas and petroleum began to dominate the U.S. energy sector beginning around 1964, surpassing coal as the dominate energy source.   

Beginning in the late 20th century, concern about global climate change and its correlation with increased anthropogenic carbon dioxide in the atmosphere started a global effort to reduce carbon emissions. 

The use of fossil fuels (coal, oil, and natural gas) to power the global economy came under scrutiny. Countries, including the European Union and the U.S., began to search for alternate non-fossil energy sources. The U.S. has fallen behind the E.U. in the adoption of renewable energy sources. In the U.S., like the rest of the world, politics continue to drive the transition to clean energy.   

The American public, in general, approve of renewables, however there are concerns about political polarization, costs, reliability, and cultural divides. Most Americans favor a mix of renewable and traditional energy sources over a complete phase-out of fossil fuels.   

The U.S. policies are pretty much divided along political party lines. The Democratic Party generally support renewable energy and advocate for policies like carbon pricing and energy efficiency standards.  The Republican Party is not generally opposed to clean energy, but try to balance the benefits of clean energy, along with avoiding the possibility Federal over-regulation, and the impact on traditional fossil fuel industries. 

Without clear and consistent Federal policies on clean energy in the U.S., many states have enacted their own policies to phase out fossil fuels. California, Oregon, and Washington have implemented a Low Carbon Fuel Standard (LCFS) program. Other states, including New York, Illinois, and Michigan, are considering or have introduced legislation to create similar programs. 

Renewable energy (solar, wind, hydro) has made great inroads in the U.S. primarily in the generation of electricity. In 2023 they accounted for 21.4% of the electric generation market share. Historically, from 1950 until 2015, coal was the dominate energy source for electricity production in the U.S. In 2015 natural gas surpassed coal as the dominate energy source for electric generation. This was due to several factors, including larger natural gas supplies from shale gas revolution, lower costs, greater flexibility, and lower emissions. In 2020, renewables overtook coal to become the second largest source of energy for electricity generation in the U.S.   

The transportation sector has been the hardest area for renewables to make an inroad. In the U.S. the transportation sector accounts for 28% of the total annual energy usage, ~28 quadrillion Btu. Only 6% of the energy usage in transportation (1.65 quadrillion Btu) is derived from renewables, mainly in the form of biofuels.   

Less than 1% of energy usage in the U.S. for electricity is used to power electric vehicles (EV’s). There were 1,140,800 new EV’s and 373,890 used EV’s registered in the US in 2024. Registration for internal combustion engine (ICE) and ICE/hybrids in the U.S. in 2024 was 283,027,600. New and used EV’s accounted for 1.54% of all vehicles in the U.S. in 2024. 

Public perception of EV’s in the U.S. is mixed. Environmental and fuel-saving benefits are the main drivers for public acceptance, but there is still resistance to EV’s due to their high costs (purchase/battery), range anxiety, and a lack of convenient public charging stations. Younger buyers and current owners are the biggest advocates of EV’s in the U.S. 

While EV’s are making an inroad in the U.S. car market, several recent political changes are hindering their growth. President Trump’s One Big Beautiful Bill canceled the $7,500 tax credits for new electric vehicle purchases on September 30, 2025. The bill also cut the $4,000 tax credit for used models. For the manufacturers, electric vehicle battery production tax credits (PTCs) will end in 2028, and tighter ICE emissions regulations have been scrapped.  

Electric vehicle (EV) sales volume in the U.S. hit an all-time high in the third quarter (Q3) of 2025: 438,487 units sold. EV sales volume in Q3 was up 40.7% from the previous quarter and higher by 29.6% compared to sales from the same period in 2024. The Q3 record beat the prior peak set in Q4 2024 by nearly 20%. During the 2025 Q3, electric vehicles accounted for 10.5% of total vehicle sales, also a new record and a significant increase from the 8.6% share in the same period last year. 

EV car sales in the U.S., as anticipated with the loss of the Federal tax credit, fell 41% in November 2025, the last month that data was available at the time this paper was written. This has led to the major automobile manufacturers in the U.S. scaling back production of EV’s. GM, Ford, and Stellantis have all pulled back their investments in EV’s, including laying off workers and idling EV production facilities in multiple U.S. States. Several of “The Big Three” are reconsidering their plans for a total transition to EV’s and looking to produce more efficient ICE’s and hybrids. 

The drop in EV sales in the U.S. is affecting global automobile manufacturers also. EV’s produced outside the U.S. are not only facing reduced sales due to the loss of the tax incentive for EV’s, but from President Trump’s tariffs on imports. Mercedes-Benz has paused orders and cut prices on current EQ models. BMW has paused some EV production and implemented price reductions. Toyota is slowing down its pure EV production ramp-up to focus on hybrids. 

Renewable sources of energy have made great strides in the last 40 or so years in the U.S. The biggest inpact of renewable energy sources can be seen in the generation of electricity. Renewables contribution to the generation of electricity will continue to grow over the next several decades. This is due to several factors, mostly driven by government legistration, and decommisioning of the aging fleet of coal-fired power plants. 

The transportation sector has seen an increase of renewables due to legistration, but has recently taken a hit from the repeal of tax incentives and the roll-back of fuel economy standards.   

With U.S. government-backed EV tax incentives now eliminated, making and selling EV’s for the U.S. market has become challenging. The all-time sales and share records in the third quarter of 2025 were predicted, as people rushed to take advantage of the tax incentives before they expired. What future EV sales looks like is still uncertain. The last quarter of 2025 and the first two quarters of 2026 will set the future of EV sales in the U.S. for at least the next three years.   

If the EV market is to rebound and grow in the U.S. under the current political environment, there will need for acceptance by the American public to purchase EV’s without requiring Government incentives, for auto manufacturers to continue improving battery performance, for them to produce more affordable EV’s, and a need for the greater availability of charging stations, especially outside major metropolitan centers. 

Renewables will continue to have a place in the energy sector in the U.S., but the speed of it’s full implementation is still to be determined. 

*The opinions expressed in this article are those of the author, and not necessarily those of the U.S. Government, U.S. Department of Energy, or the National Energy Technology Laboratory

Charles E. Taylor