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The coming end of the federal EV tax credit. Rising tariffs on imported parts. Less than 10% consumer adoption projected in 2025. These are some of the urgent challenges in the electric vehicle industry that you’ll face this year alone.
This article explains the factors that will affect how you do business. From sourcing batteries to optimizing charging stations and adapting to changing regulations, we’ll walk you through the roadblocks ahead. The EV industry, after all, is full of bumps that could drain your charge fast.
Consider this a quick recharge on the things that matter most in the EV business.
What You’ll Learn
The biggest challenges facing businesses in building and shipping EVs
The potential solutions to deal with challenges such as limited charging infrastructure and environmental damage
The recent news affecting the EV industry in 2025
The biggest challenges facing businesses in building and shipping EVs
The potential solutions to deal with challenges such as limited charging infrastructure and environmental damage
The recent news affecting the EV industry in 2025
Summary
Challenge 1: Battery Supply and Safety
The Core of EVs: Advanced Battery Technology
At the center of every electric car is the battery. It sets how far the car goes, how it performs, and the price. EV makers use lithium-ion batteries the most. These devices balance power, safety, and cost. Still, making them in large numbers is tough, and companies face big challenges.
Dependence on Rare Earth Materials
Lithium-ion batteries need lithium, cobalt, nickel, and graphite. These are called rare earth elements, but they are not truly rare. What makes them rare is the mining; it is costly and difficult. Many come from unstable regions like the Democratic Republic of Congo and Bolivia, which creates risks for supply chains and prices.
Key facts:
The Congo exports more than 70% of the world’s cobalt supply.
Bolivia holds 22% of the world’s known lithium reserves.
Supply Chain Vulnerabilities
The global supply chain for battery materials is complex and fragile. Disruptions from politics, new rules, or labor strikes can affect the EV industry. The COVID-19 pandemic showed how easily shipments and production can stall.
To deal with these challenges in battery logistics, some automakers are exploring solid-state batteries. These could offer greater safety and performance, but they remain early in development.
Key facts:
Toyota aims to release solid-state batteries in 2028.
In 2025, more than 96% of major container ports in the world are facing operational disruptions, with vessels waiting more than 10 days on average in hubs like Singapore.
Challenges in Shipping and Logistics
Once made, batteries must be shipped to plants, dealerships, or consumers. They are heavy and classified as dangerous goods, adding cost and strict rules. Shippers must prevent damage, control temperature, and follow safety laws. Limited transport options and special containers raise costs further.
Key facts:
Shipping lithium-ion batteries as Class 9 hazardous goods raises transport costs by around 40% compared to standard cargo.
More than 5,000 fires annually occur at recycling centers and waste facilities, many linked to lithium-ion batteries being mixed with other recyclables.
Future Outlook
As demand for EVs grows, battery supply chains face pressure. Automakers and suppliers are turning to vertical integration, securing raw materials and building plants near markets. Recycling advances may reduce mining needs by reclaiming valuable elements from used batteries.
Challenge 2: Charging Access
The Backbone of EV Adoption
One barrier to EV growth is charging access. Gas stations are everywhere, but EVs need new charging networks. Without reliable stations, buyers may experience “range anxiety,” or running out of power before getting a recharge.
Key facts:
The U.S. averages about 104 gas pumps per 1,000 road miles, compared to 22 EV charging ports for the same distance.
A 2025 survey found 77% of U.S. drivers are willing to wait up to 40 minutes to charge EVs to 80%.
Current State of Charging Infrastructure
Charging station access depends on location. Cities and wealthy regions have better coverage, while rural areas lag. In the U.S., the West Coast and Northeast lead, but the Midwest and South trail.
Key facts:
California leads the country with more than 15,600 public EV charging locations.
Alaska is last in the nation with only 63 charging stations.
The Challenge of Scaling Infrastructure
Building a charging network takes teamwork from governments, companies, and EV makers. Partnerships help fund stations in less profitable areas. To meet different needs, chargers range from Level 1 to Level 3.
Transporting heavy equipment adds shipping challenges, and careful planning is required to place stations where demand is strongest.
Key facts:
The Department of Transportation revived a $5-billion program that helps states access funding towards EV charger deployment.
A single port for a Level 3 (DC fast) charger usually costs about $40,000 for the equipment alone.
The Role of Technology and Innovation
Advances in charging technology help ease challenges. Wireless pads let EVs recharge by parking, while ultra-fast chargers support long trips. For shippers, moving complex and costly equipment creates new hurdles. Safe, timely delivery of these parts is vital for building reliable charging networks that support growing EV demand.
Key facts:
Fast chargers made up about one-third of all new public charging installations in 2024.
As of 2025, there are at least 12 companies in the U.S. offering wireless EV charging solutions.
Looking Ahead
The future of charging needs investment and teamwork. Governments and companies must expand coverage. Shippers must adapt, moving and installing equipment efficiently to support reliable charging for EV owners everywhere.
Challenge 3: Rules and Trade
A Global Patchwork of Regulations
EVs face strict rules that differ across states and countries. Regulations cover safety, emissions, and incentives. For manufacturers, meeting these varied standards is challenging, especially when selling in multiple markets with different requirements.
Key facts:
One analysis puts South Dakota as the most inhospitable state for EV owners, because of the state’s low number of charging stations and zero incentives.
Another analysis puts Massachusetts as the best state to own a car, owing to its hundreds of charging stations and $3,500 rebate.
Navigating Emission Standards
Stricter global emission rules drive EV growth. Governments demand lower greenhouse gases, pushing automakers toward EVs.
Standards differ, though: the EU requires low-emission sales or fines, while the U.S. has mixed state rules, led by California. Meeting these demands costs money and forces design and supply changes.
Key facts:
California’s ACC II rule requires 35% of new vehicle sales to be zero-emission by 2026, rising to 100% by 2035.
Delaware became the latest state to formally adopt California’s ACC II regulation in November 2023, joining 11 others, like New York.
Safety and Certification Requirements
EVs must follow safety standards that differ by region, covering crash tests, battery safety, and pedestrian protection. Meeting rules requires tough testing and delays new models.
EV auto transport businesses, meanwhile, face customs checks and safety rules when moving EVs across borders, with noncompliance causing delays, fines, or shipment impounds.
Key facts:
Any vehicle (including EVs) less than 25 years old must meet all applicable Federal Motor Vehicle Safety Standards (FMVSS) to be permanently imported.
Nonconforming vehicles require a bond equal to 150% of the vehicle’s entered value if imported.
The Impact of Trade Policies
Tariffs and trade rules affect EV costs. Higher fees on parts like batteries raise expenses. Shippers face added work with customs and legal checks, slowing shipments and increasing costs.
Key facts:
The U.S. has imposed 25% tariffs on Chinese EV batteries and other critical minerals under Section 301.
Imports of vehicles and auto parts from Mexico face 25% additional tariffs, although goods that satisfy USMCA origin rules are exempt.
Evolving Regulatory Landscape
EV rules keep changing as governments set bans on gas cars by 2030 or 2040. Automakers and shippers must stay compliant or risk fines, delays, and missed opportunities in growing EV markets.
Key facts:
California has a rule to ban sales of new gas-only vehicles by 2035.
The European Union will also eliminate sales of new ICE vehicles by 2035.
Strategies for Compliance
Automakers must work with regulators early to prepare for new rules and avoid costly changes. Shippers should also rely on specialized logistics firms to handle documents, meet standards, and reduce risks in domestic and international EV transport.
Challenge 4: High Costs
High Costs of EV Production
Making EVs is costly. Batteries alone can be 30% of the price, needing lithium, cobalt, and nickel. Automakers invest heavily in R&D to improve range and safety. These costs raise consumer prices.
Key facts:
In March 2025, the average transaction price for new EVs was $59,205, around $12,000 more than gas-only vehicles.
One source estimates that a typical EV costs around $45,000 to produce vs $30,000 for a typical ICE vehicle, largely due to the battery.
Balancing Affordability and Profitability
Automakers must balance affordability and profit in EVs. Many invest in scale, aiming to lower costs as volumes rise, though demand risks remain. Competition adds pressure.
Tesla can cut prices with brand strength, while traditional automakers must fund EV growth and still support gasoline vehicle lines.
Key facts:
Tesla once cut its EV prices by more than 20% year-over-year in 2023.
New EV maker Slate prices its base EV pickup around $25,000, aiming for under $20,000 after incentives, with a minimalist design and optional add-ons.
Logistics and Shipping Costs
EV production costs extend to logistics. Moving EVs is expensive since batteries are heavy and sensitive. Specialized equipment is needed.
Shipping costs also rise with fuel prices, tariffs, and currency shifts. Tariffs on imported parts especially add costs when trade tensions are high, raising overall EV prices for consumers.
Key facts:
Former Stellantis CEO Carlos Tavares once mentioned that a battery pack needed for a 250-mile range now adds about 1,000 pounds of materials compared to a similar gas-only car.
Fuel often accounts for 20% to 30% of total vehicle shipping operating costs.
The Role of Government Incentives
Governments use incentives like tax credits and rebates to lower EV costs. In the U.S., buyers can still claim up to $7,500 in federal credits, but this program ends September 30, 2025. Since incentives change, automakers must plan pricing carefully to stay competitive.
Key facts:
Buyers can still secure the $7,500 federal credit by signing a binding contract with payment before September 30, 2025.
California offers up to $7,500 in rebates through the Clean Vehicle Rebate Project, making it one of the most generous.
Innovations in Cost Reduction
Automakers seek lower EV costs through solid-state batteries, 3D printing, and new business models like leasing or subscriptions. These strategies cut production expenses, reduce upfront prices, and limit consumer risks tied to battery performance.
Challenge 5: Buyer Concerns
The Hurdle of Consumer Perception
Consumer acceptance is still a challenge for EVs. Many hesitate due to charging access, range, and higher upfront cost. Others doubt long-term reliability, especially battery life.
Misunderstandings and limited knowledge about modern EV benefits add to hesitation, slowing adoption even as awareness of environmental advantages grows steadily.
Key facts:
In the second quarter of 2025, EVs made up 7.4% of all new car sales in the U.S., down from 8.0% a year earlier.
A AAA survey found only 16% of U.S. adults say they’re likely or very likely to buy a fully electric vehicle as their next car.
Range Anxiety and Charging Concerns
Range anxiety still limits EV adoption, even as most new models reach 250 miles per charge. Nearly half of buyers cite this concern.
Limited charging networks and longer charging times add to worries, especially for long trips or drivers without easy home charging access.
Key facts:
One study shows that around 46% of EV owners said they are “very likely” to switch back to a gas vehicle for their next purchase. One of the big reasons is that it’s difficult to find places to charge their vehicles.
Most homes built after 1960 can support Level 2 charging, adding 25–35 miles per hour, requiring between 8 and 10 hours for a full charge.
Competition from Traditional Automakers
The EV market is highly competitive. Traditional automakers like Ford, GM, and Volkswagen invest heavily while new brands such as Tesla, Rivian, and Lucid push innovation.
Competition brings better choices and lower prices, but too many options can overwhelm buyers, making decisions harder despite improved technology and sustainability.
Key facts:
As of the first quarter of 2025, Tesla holds almost half of the U.S. EV market share.
The anticipated entrance of the under-$30k State electric vehicle challenges entrenched competitors.
The Role of Marketing and Education
Automakers must invest in marketing and education to build EV trust, addressing myths about range, charging, and battery life. Highlighting lower costs and environmental benefits helps.
EV shipping also matters: fast, reliable, and affordable delivery shapes customer perceptions, while delays or high costs risk reducing buyer interest and confidence.
Key facts:
One campaign by non-profit organization Veloz made viewers 75% more likely to consider buying an EV.
BMW’s U.S. dealer-coaching program trained 350 dealerships to improve EV readiness. This helped consumers better understand EV range, charging, and features.
Incentives and Policy Support
Government incentives like tax credits, rebates, and low-emission zones boost EV adoption. Policies vary by region and can change, so automakers and shippers must adapt strategies to shifting rules and conditions.
Challenge 6: Environment
The Green Promise of EVs
EVs are promoted as reducing emissions since they have no tailpipes and can run on renewable power. Still, their overall environmental impact is complex, depending on electricity sources and battery production.
Key facts:
A study by the International Council on Clean Transportation found battery EVs produce 73% fewer lifetime CO2 emissions than gasoline cars in Europe.
U.S. Dept. of Energy / Argonne Lab research shows switching from gas cars to EVs cuts greenhouse gas emissions by about 52% over a full lifetime.
The Carbon Footprint of Battery Production
EV batteries are costly to the environment, needing lithium, cobalt, and nickel that cause pollution and habitat loss. One study shows that producing them can emit up to 74% more CO₂ than making gas cars.
Over time, renewable charging and recycling can offset this impact, reducing lifetime emissions and improving sustainability.
Key facts:
Producing one tonne of lithium carbonate can emit up to 18 tonnes of CO2-equivalent per tonne.
In 2021, global cobalt production caused about 1.6 million tonnes of CO2 emissions.
The Challenge of Battery Disposal and Recycling
Disposing EV batteries poses risks, as recycling remains limited and inefficient. Better recycling can recover lithium and cobalt, cutting mining demand. Second-life uses, like energy storage, extend battery value and reduce environmental impact.
Key facts:
Batteries stored at ~40-50 °C degrade twice as fast compared to room temperature.
Tesla states that its lithium-ion batteries are recoverable and recyclable.
The Role of Sustainable Manufacturing Practices
To address challenges involving battery disposal and recycling, automakers are increasingly adopting sustainable practices, sourcing ethical materials, using renewable energy, and planning recycling. Closed-loop supply chains recover old battery materials, reducing mining needs and securing critical resources for future EV production.
Key facts:
One estimate shows that the U.S. discards, via mine waste each year, enough lithium in residual tailings to supply around 10 million EV batteries.
New recycling tech can restore old EV battery parts to more than 80% strength by reheating them for only a few hours.
Sustainable Shipping and Logistics
EV shipping adds emissions, reducing environmental gains. Shippers cut impact by optimizing routes, using fuel-efficient carriers, or shifting freight to rail or sea. Some adopt electric trucks for last-mile delivery. These steps lower fuel use, reduce trips, and help extend EV sustainability benefits through distribution and logistics.
Key facts:
Amazon committed to putting 100,000 electric delivery vehicles on U.S. roads by 2030, in partnership with Rivian.
A study by the University of Michigan and Ford found that light-duty electric trucks, SUVs, and pickups have about 64% lower lifetime greenhouse gas emissions compared to gas-only vehicles.
The Future of Sustainability in the EV Industry
As EV demand grows, sustainability matters more. Automakers and shippers must improve recycling, manufacturing, and shipping practices. Environmentally conscious consumers favor companies showing strong sustainability commitments, driving innovation and competitiveness in the EV market.
Final Thoughts: Charged for the Future
The EV industry faces major hurdles: batteries, supply chains, charging networks, and regulations. Automakers and shippers must manage costs, win consumers, and prioritize sustainability to build a stronger, more electrified future together.
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Frequently Asked Questions (FAQs)
What are the main supply chain issues faced by EV makers?
EV makers struggle to get lithium, cobalt, and nickel for batteries. These often come from unstable regions. Shipping heavy, risky batteries also adds cost and safety problems, making the supply chain harder to manage.
How does charging infrastructure affect the EV market?
Charging stations are key for EV growth. Without enough reliable chargers, buyers worry about range. Building networks takes a big investment and tough logistics, especially moving and setting up equipment in faraway areas.
What role do regulations play in EV shipping?
EV shipping faces strict rules, especially across borders. Shippers deal with customs, safety checks, and environmental laws. Breaking rules can cause delays, fines, or seized shipments. These raise costs and disrupt supply chains.
Why is cost management crucial for EV manufacturers?
Making EVs is costly, with high spending on research, materials, and factories. Companies must balance prices and profits, while shipping adds pressure from special handling needs and rising fuel costs.
How can shippers help reduce the environmental impact of EVs?
Shippers can cut EV shipping pollution by using efficient trucks, combining loads, and choosing rail or sea. Adding electric or hybrid vehicles for last-mile delivery lowers emissions even more.
