Global competition, uncertainty about policy changes in an election year and the fading impact from federal subsidies all loom as emerging issues for the U.S. electric vehicle (EV) industry.

Those were among the messages Wednesday as dozens of automotive experts filled a conference room near downtown Detroit on Wednesday for the Federal Reserve Bank of Chicago’s annual Automotive Insights Symposium.

While much of the U.S. car market is “almost” back to normal following pandemic sales dips, supply chain woes and striking union workers last fall, automakers are still facing “a lot of uncertainty,” Kristin Dziczek, policy adviser for the Chicago Fed said.

Most of that comes from electric vehicles and the industry’s shift away from internal combustion engines, Dziczek and other panelists said Wednesday as they explored business and consumer impacts from the change.

Global auto manufacturers — encouraged by federal and state policies and billions of dollars in federal spending — have raced toward electrification in recent years to cut emissions and encourage energy independence.

However, the shift away from gas-fueled vehicles is taking longer than originally anticipated.

EV sales grew in 2023 by a record 1.2 million, reaching 7.6% of all new vehicle sales in the U.S. But that number is lower than expected. The number is 18% less than forecast by Atlas Policy in a 2023 report. Now, experts say the industry is unlikely to reach the 6.9 million vehicle sales once expected by 2025.

As a result, automakers are slowing their investment and pace of production, raising questions about how quickly Michigan and other manufacturing-heavy states will realize new EV jobs that have been heavily subsidized with billions of state dollars. The state is home to General Motors Corp., Ford Motor Co. and Stellantis NA, the former Fiat-Chrysler.

“It’s unlikely that we’re running out of charge,” Dziczek said about electrification and explaining that sales aren’t likely to decline. “We might just be going a little slower.”

Here are three EV-related issues looming for the industry in 2024 and beyond:

Federal subsidies may not be enough to boost sales

In 2022, the federal $740 billion Inflation Reduction Act set up a series of clean vehicle tax credits, with the goal of cutting EV costs to consumers while supporting a U.S.-based supply chain and domestic manufacturing.

The tax credits were initiated to close the price gap of as much as $10,000 that made EVs more expensive than traditional vehicles. By 2023, the gap had closed, but the average EV price was still just over $53,000.

When the tax breaks launched in 2023, 43 vehicles had enough North American components to qualify for the full $7,500 incentive. In April, the requirements tightened over critical minerals in batteries to ensure that at least 40% come from free-trade partners of the U.S., which cut into the number of qualifying vehicles.

Then, on January 1 of this year, as more new requirements took effect, just 19 vehicles qualified for the full $7,500 incentive.

By next year, still fewer are likely to qualify. Looking ahead, fewer global sources of cobalt and nickel will be compliant by 2030, even as more manufacturers seek those minerals.

“This is going to bite (into sales) really hard,” Dziczek said.

Global competition is expanding in the U.S.

The EV product-launch pipeline is robust for Michigan-based automakers, but it’s also strong for global companies — some of which are startup automotive companies — that are also establishing markets in Asia and Europe.

The playing field soon is likely to expand in the U.S., adding to the competition for market share for existing companies. Key among them are Chinese carmakers, which are now the world’s largest exporters of EVs.

BYD Motors, for example, is now the top global EV brand, outselling Tesla. Reports from the Financial Times also indicate that several new Chinese companies are scouting for locations in Mexico.

“You’re used to hearing that General Motors sells more cars in China than in the U.S.,” Dziczek said. “That’s not true anymore.”

Implications come for global and domestic market share. Suppliers also could be impacted, she added, since Chinese automakers are turning to their own supply companies instead of American firms.

One reason is that the newer Chinese models are “delivering what new and tech-savvy Chinese customers want,” said Mark Wakefield, automotive practice lead with the consulting firm AlixPartners.

Low prices are not the driver, he said. The newer manufacturers are focused on “style and technology, not just ride and handling,” Wakefield said. “That’s been a hard thing for automakers to accept. Particularly for chief engineers.”

Ultimately, automaker success will come down to the consumer, said Stephanie Brinley, associate director for research & analysis for S&P Global. Success stories from Asian automakers like Toyota and Hyundai Kia contrast to Daewood and Suzuki, which found the U.S. market difficult to break into.

“They’re ready,” Brinley said of Chinese brands.

Questions about presidential election impact

The presidential election in November could lead to changes in EV policies for the second half of the decade.

Under President Joe Biden, federal manufacturing initiatives designed to bring production back to the United States during the pandemic encouraged EV production. Former President Donald Trump, the Republican frontrunner, has sent mixed messages on EVs. He’s said he supports electric vehicles but has clashed with Democrats over emission standards that, in turn, have encouraged the shift.

Dave Zoia, senior director for content of Informa Tech Automotive Group, said he expects EV sales to continue to grow, but possibly remain at a slower pace as most consumers still weigh whether they’ll buy an EV.

“It’s still very much a policy-driven market,” Zoia said Wednesday during the symposium.

With the election could come big policy shifts in emission regulations, incentives and funding for charging stations, Zoia said.

Auto industry decisions to slow the pace of production — such as Ford downsizing its battery plant in Marshall and GM delaying EV production in its Lake Orion Assembly plant — make financial sense for the companies today, but Zoia said the moves also could signal their uncertainty about the election outcome.

“To me, politics plays into that a little bit,” Zoia said. “I think they’re a little worried about what the policy shift is going to be.”