Last year was a rough year for electric vehicles. The U.S. failed to meet the Obama administration’s 1 million electric vehicle target for 2015 by a long shot, and the market saw a downturn from 2014 as low gas prices limited the benefits of going electric. But this year is different.

This year, electric vehicle (EV) sales are up 34 percent from January through September compared to the same period in 2015 -- from 82,404 units to 110,171 units -- according to the monthly sales tracker from Inside EVs. This increase comes despite the fact that gas prices remain low and gas guzzler purchases are on the rise.

So what’s causing the EV comeback? It appears that desirability has something to do with it, and will be a key element in driving the market forward.

There is still a long way to go before EVs are affordable for the masses; batteries still need to see significant cost reductions. Range anxiety and a lack of charging infrastructure also continue be challenges. But at the same time, it’s crucial that automakers make cars that consumers actually want in order for EVs to reach scale.

Tesla's success illustrates this. The Model X crossover has sold nearly 13,000 units year to date, which has given the overall U.S. EV market a major boost. Earlier this year, the company had an estimated backlog of around 35,000 Model X units. Meanwhile, demand for the critically acclaimed Model S remains high and reservations for the Model 3 -- a more affordable, but by no means cheap vehicle -- have topped 400,000. In this case, cost has taken a backseat to cachet.

Today, EVs make up around 1.6 percent of all light-duty vehicle sales. According the Department of Energy, plug-in cars could make up 6 percent of U.S. auto sales by 2025. Mandates such as California’s Zero Emissions Vehicle program are helping bring more cars to market. But automakers still have to close the deal. If Tesla’s experience is any indication, car companies can’t underestimate the need for good performance, curb appeal and a strong brand.

“The Model S competes in the large luxury segment against the BMW 7 Series and the Mercedes S Class, and within four years it became the market leader in that segment,” said Prajit Ghosh, Wood Mackenzie research director and lead author of the new report Tesla Model 3: Does It Signal an Electric Car Revolution?

“There’s a huge caveat that [the luxury segment] is a small segment of roughly 100,000 vehicles per year, and luxury consumers aren’t a good representation of the larger consumer base,” Ghosh continued. “But if you extend the Tesla model to a model others can replicate, it points toward a potential disruption in the market from a consumer-acceptance standpoint.”

Big play from Chevrolet?

One of the reasons for the EV market downturn in 2015, besides gas prices, was pent-up demand for the 2017 Chevy Volt -- General Motors’ second-generation plug-in hybrid. Volt sales slumped last year as customers delayed making a purchase until the launch of the new version in October 2015. Volt sales surged with the release of the new model. Nearly 5,000 more units of the Volt have sold so far this year compared to the same nine-month period last year.

A year since it hit the market, the Volt is now the leading plug-in hybrid electric vehicle in the U.S. and the second-best-selling EV overall this year after the Tesla Model S. The second-generation Volt is better than first in every way, according to Shad Balch, product specialist for Chevrolet.

“The biggest feedback was that owners wanted more electric range, so we increased it from 38 miles to 53 miles, which is right at the top end of the sweet spot everybody drives every day,” he said. “Most people drive less than 60 miles a day, charge at night and never use gasoline.”

Drivers also asked for a third seatbelt in the rear so the car could hold five passengers -- the previous Volt model could only hold four. Chevy also upgraded the infotainment center by adding Android Auto and Apple Carplay. Plus there are features like blind spot warning, lane departure warning, automatic breaking, rear cross safety alert and air bags to mitigate any safety issues.

“The plan worked,” said Balch. “All of the improvements in the car have been verified by the new owners. Sales are up and strong. The Volt still qualifies for the carpool lane sticker in California, which is very important. All of that is why the car is doing so well.”

Arguably, the best feature of the Volt is that drivers can commute predominantly on electric fuel, minus the range anxiety, knowing a plug or a gas station is never far away. A recent test drive of the 2017 Volt showcased the benefits of a plug-in hybrid drivetrain. With a full charge, the car drove around Napa for an afternoon emissions-free, which seemed fitting for the countryside. The car then seamlessly switched over to gasoline for the return journey to San Francisco, in traffic, with no stops necessary. With the latest generation, Chevy also boosted the Volt’s gasoline fuel economy from 38 mpg to 41 mpg, upping the car’s green credentials.

But while the Volt is innovative and lifestyle-friendly, there are some drawbacks. For one thing, the infotainment system can be tricky to navigate. The design also creates blind spots that drivers need to keep in mind. And while there’s an additional seatbelt in the back, space is tight, which limits the third seat to occasional use. The outside shape the Volt resembles the Chevy Cruze, which makes it less of an aesthetic departure from mainstream commuter cars, but could reduce the cachet for some consumers.

“It shouldn’t be a conversation about whether a car is electric or not, it should just be a conversation about a great car,” said Levi Stocke, a model and Instagram influencer, who recently tested out the 2017 Volt.

Stocke gave the Volt a positive review, but admitted he prefers a car that is sportier. “The car has to fit the driver visually too,” he said.

Last month, GM revealed the EPA-tested range of the new all-electric Bolt to be 236 miles. That’s more than double the range of comparable EVs on the market today, at a price point around $30,000 with the federal tax credit.

GM beat Tesla with the first affordable, long-range EV aimed at the mass market. The Bolt goes into regular production this month, while the Model 3 will start volume production in the summer of 2017. The Detroit-based company also boasts a robust supply chain and immense manufacturing capacity, while manufacturing issues have tripped up Tesla in the past. But winning the long game may come down to whether or not GM can create the same sense of allure with the Bolt as Tesla has with the Model 3.

Consumer interest grows with options

There may not be an ideal suite of EVs on the market for the masses just yet, but research shows that as automaker investments increase, public awareness increases and overall EV interest goes up.

A recent survey by the Consumer Federation of America (CFA) found that interest in purchasing an EV increased from 31 percent in 2015 to 36 percent in 2016. Of the different age groups, young adults aged 18-34 proved to be the most interested, with a full 50 percent saying they would consider buying an EV. Interest was also markedly higher among respondents who consider themselves knowledgeable about EVs.

Furthermore, the survey asked consumers, “The next time you buy or lease a car, would you consider an electric vehicle if it costs the same as a gas-powered car, has lower operating and maintenance costs, has a 200-mile range between charges, and can recharge in less than an hour?” In response, 57 percent of those surveyed said they would be interested in purchasing this EV. For those who said they know a lot about EVs, the figure rose to 62 percent. And for young adults, the figure was 70 percent.

Jack Gillis, CFA director of public affairs, noted that the “high-tech” nature of EVs will be an important factor in driving future purchase decisions, as well as vehicle quality and choice.

“Consumer interest in buying electric vehicles is growing at the same time as these vehicles are becoming more available and more attractive,” he said, in a statement.

This year, 13 car companies offer at least one electric option, according to CFA. Volkswagen is offering four models, while Ford, BMW and Mercedes-Benz each offer three models. Among the major automakers, only Honda, Subaru and Mazda do not currently offer an EV option.

The number of EVs on sale in the U.S. has been growing steadily. In 2011, there were only three EVs on the market. This year, there are 25 models on the market. And based on manufacturer projections, there should be 33 different models available in 2017. Six all-new EVs will be sold next year between BMW, Chevrolet, Hyundai, Mercedes-Benz, Volvo and Tesla, according to CFA. The much-anticipated Tesla Model 3 already has more than 400,000 preorders, which is a higher number than for any other car ever introduced.

Several automakers have recently made major commitments to up their game on electrification. Last December, Ford announced it will invest $4.5 billion in electric vehicle solutions by 2020, bringing 13 additional EV models to market by the same year. Volkswagen has plans to release 30 all-electric models and become the world leader in green transport. And Mercedes-Benz launched a sub-brand for electric cars, EQ, at the Paris Auto Show.

“We doubt that automakers would be spending billions of dollars on EVs if they did not think they could sell them to consumers,” said Mark Cooper, CFA’s director of research.

Ghosh has a bullish view of the future EV market. Wood Mackenzie estimates that EVs will account for 12 percent of new-car sales in the U.S. by 2035. But growth in the near term will be slow to moderate.

“In the next 10 years, we don’t see too much of an impact on the market," said Ghosh. "The simple reason is, for EVs to have a significant impact, you need a lot of EVs on the road.

“You’re seeing plans to have EVs across different segments of the market -- SUVs and small sedans and luxury sedans -- but these plans are only going to materialize in 2020 and 2025 in that timeframe,” he added.

In addition, costs still need to come down. The number often cited to make EVs affordable for the masses is to bring battery costs down to $100 per kilowatt-hour. Tesla aims to reach that target by ramping up production of lithium-ion batteries at the Gigafactory. Ghosh believes that new battery technology will be needed to bring battery costs below the $100 per kilowatt-hour target.

“With the Model 3 or Chevy Bolt, your range is longer and your costs are lower…but there’s still a ways to go in terms of battery costs and vehicle costs for EVs to be mass-market,” Ghosh said. “The Model 3 isn’t a mass car. It takes EVs from a niche market to a market of maybe 3 million cars per year. […] You need range to increase further and costs to come down further to reach a point where EVs compete with the 17 million cars sold in the U.S. today.”

Wild card: New business models

Another factor that could drive major EV adoption in addition to cost, range and design is how well manufactures integrate advanced technologies and accommodate new mobility applications.

Traditional vehicle ownership will form the basis of the U.S. car market for years to come. But the role vehicles play in society is shifting at the same time. Vehicles are becoming more integrated with the home, and they’re becoming more integrated with the community through sharing and autonomous technology. This is where electrified vehicles could really shine.

In January, Ford announced it’s working to pair its SYNC in-car technology platform with Amazon’s Echo smart speaker and Alexa virtual assistant, as well as the Wink home automation system. These platforms make it easy for EV drivers to find out how much charge they have remaining before leaving the house, or control lights and appliances in their home from their car. Eventually, cloud-based services could do more than read an EV’s charge -- they could fully control the vehicle. In January, Ford also announced an expansion of its car-sharing service GoDrive and continues to invest in ride-sharing, in-car connectivity and autonomous vehicle technology through its newly formed subsidiary Ford Smart Mobility.

GM has also invested heavily in the trifecta of electrified, shared and autonomous vehicle technologies. In January, GM announced a new car-sharing service called Maven that is now operating in Ann Arbor, Baltimore, Washington, D.C. and San Francisco. The service offers both electric and non-electric cars, and will soon include the Bolt.

GM offers vehicle-sharing for Lyft drivers too, where they pay a fee to rent a car and are incentivized with reduced rates to drive more. The Express Drive program follows GM’s $500 million investment in the car-sharing company.

“We're beginning to get a lot of business now and a lot of learning after 100 years of mobility by purchase,” said Peter Kosak, GM’s executive director of urban mobility, in a recent interview. “Now we're starting to get real learnings around mobility via service, and that's really what this is all about.”

GM also recently boosted investments in autonomous vehicle technology. Last fall, the company shifted its work on autonomous vehicles from a research and development effort to a more applied program. In March, GM acquired the San Francisco-based self-driving technology company Cruise Automotive for upward of $1 billion.

“This is really a software company and artificial intelligence company that ensures that the vehicles learn and they make the best decisions based on different situations,” said Kosak. “We have some vehicles running around, not only in San Francisco, but also Scottsdale, Arizona.”

The Chevy Bolt is the base vehicle for these autonomous vehicle tests. That’s because charging an EV is much simpler than refueling a gas-powered car. EVs also have fewer moving parts, and require less maintenance. And because EVs can operate in closed spaces since they produce zero tailpipe emissions, whereas gasoline-powered cars do. All together, these features make electrified vehicles “much more suitable to autonomous deployments,” said Kosak.

Chinese companies are embracing the mobility trifecta too. LeEco, a Chinese consumer electronics giant formerly named LeTV, launched a self-driving EV concept car earlier this year called LeSee that’s expected to form a fleet of autonomous taxis. LeEco is also an investor in California-based Faraday Future, which is currently building the FFZero1 electric super car, but ultimately plans to build a suite of EVs and has hinted at launching a vehicle “subscription” service.

Then there are autonomous and shared electric-vehicle plays being made by Google and Apple, and soon perhaps Uber.

All signs indicate that EVs will make up a significant portion of the vehicle market in the coming years. This year already shows progress for plug-ins. But with sales barely over 100,000 units, there’s no denying that the market is still tiny. For EV adoption to grow the way it’s predicted to, consumers need to be won over with much more compelling cars and, increasingly, new mobility services.