According to Precedence Research, the global electric vehicle market was estimated at USD 170 billion in 2021 and is expected to reach over USD 1103.17 billion by 2030, poised to grow at a compound annual growth rate (CAGR) of 23.1% during the forecast period 2022 to 2030.
The electric vehicle market growth is being driven by the growing fundings and investments by key market players. Ford had previously stated that it would invest $11.5 billion in electrifying its vehicle lineup between now and 2022. It recently claimed that it had upped its spending in driverless and electrified vehicles to help boost vehicle sales in the face of ongoing lockdowns. Mercedes-Benz also confirmed that, in addition to completely electric vehicles, it will release 25 new plug-in hybrid electric vehicles by 2025. Companies' diverse product offers have attracted a large number of customers, resulting in an expanding market for electric vehicles.
Growth Factors
Significant number of initiatives taken by the government of various countries such as tax rebate, subsidies & grant, and other various non-financial benefits in terms of car registration, and access to car pool lane expected to drive the sale of electric vehicles in coming years. For instance, in November 2019, Germany car manufacturers have raised their cash incentives for electric cars to move away the transition from combustion engine to battery-powered engines to reduce harmful emission. Countries, such as U.S., China, and different countries in Europe, have registered significant growth in the sale of electric vehicle in the past few decades that in turn, will contribute to the market growth.
However, lack of charging infrastructure along with variations in charging load & lack of standardization are some of the major factors analyzed to hinder the market growth. Different regions such as China, Europe, U.S., Japan, Korea, and others have different standards for electric vehicle charging. Some of the electric vehicle manufacturer such as Tesla Inc. is focusing on global standardization of charging infrastructure to overcome this drawback. Nevertheless, rising adoption of electric vehicles in government and commercial sectors is anticipated to drive the market. For instance, in 2020, UK government has approved 200 electric buses with an ambition to make all buses fully electric by 2025 that could save nearly 7,400 tonnes of CO2 every year.
The market of electric vehicles is likely to be affected positively by the recent trend of self-driving trucks. Furthermore, the top OEMs similar as Volvo, Daimler Vera, and Tesla, are among others have been developing automatic-driving electric vehicles for the market. Therefore, technology regarding self- driving will surge the demand for electric vehicles in the long run owing to the colorful advantages similar as decreased accident threat, easy use, and presence of value- added features. This technology is anticipated to develop by the coming 5-6 times. Therefore, growth of self- driving electric vehicle technology is likely to bring growth opportunities for the market in the forthcoming time period.
Market Dynamics
Drivers
Growing government initiatives
Governments are spending a lot of money on incentives and subsidies to persuade people to buy electric cars. Governments throughout the world are taking initiatives that are likely to boost demand for electric vehicles in the coming decade. Electric vehicles have been regulated in developing countries, and fuel economy criteria have been established in all countries. In addition, they offer incentives and subsidies to electric vehicle makers and buyers. Thus, this factor is driving the market growth.
Restraints
Lack of standardization
The non-presence of standardization among nations may have an effect on charging station connection and hinder market expansion. The usage of several charging standards around the world creates a hurdle to electric vehicle charging station harmonization. Standardization of charging points would make it easier to charge electric vehicles in public and contribute to a faster increase in electric vehicle demand around the world. As a result, lack of standardization is restricting the growth of the market.
Opportunities
Declining costs of electric vehicle batteries
Due to technological breakthroughs and the mass production of electric vehicle batteries in huge quantities, the cost of electric vehicle batteries has decreased over the last decade. Because electric vehicle batteries are one of the most expensive components of the car, this has resulted in a reduction in the cost of electric vehicles.
Challenges
Lack of charging infrastructure
In many places around the world, there are few electric vehicle charging facilities. As a result, public electric vehicle charging stations for electric vehicles are becoming less available, lowering uptake. Electric vehicle charging infrastructure is being installed in many countries, although most countries, with the exception of a few states, have not been able to establish the requisite number of charging stations.
Report Scope of the Electric Vehicle Market
| Report Highlights | Details |
| Market Size in 2021 | USD 170 Billion |
| Growth Rate | CAGR of 23.1% from 2022 to 2030 |
| Largest Market | Asia Pacific |
| Fastest Growing Market | Europe and North America |
| Base Year | 2021 |
| Forecast Period | 2022 to 2030 |
| Segments Covered | Propulsion Type, Components, Vehicle Type, Vehicle Class, Top Speed, Vehicle Drive, EV Charging Point Type, V2G, Region |
| Companies Mentioned | BYD Company Ltd., Ford Motor Company , Daimler AG , General Motors Company, Mitsubishi Motor Corporation and Groupe Renault |
COVID-19 Impact Analysis:
Propulsion Type Insights
The Battery Electric Vehicles (BEV) led the global market and accounted for more than 66% of the overall revenue share in 2021. The significant growth of the BEV is largely due to the potential benefits offered such as control over greenhouse gas (GHG) emission, energy security concerns, and control over local pollutants. This can be due to people's growing awareness of the environment and the benefits of battery electric vehicles.
Moreover, the cost associated with BEV is greater as compared to the PHEV. The PHEV is expected to witness the fastest CAGR of around 43.5% owing to numerous benefits over BEV, some are low battery cost with smaller battery size and longer driving range as they are equipped with liquid fuel tank and internal combustion engine. Additionally, many EV manufacturers such as Volkswagen Group and General Motors are focusing on multi-platform technology with large attention towards PHEV as they can be refueled at any gas station while BEVs can only be charged at public charging stations. Public charging spots are far between and very few in the city. Thus, PHEV offers flexibility and freedom to the drivers. In January 2020, Volkswagen AG increased its plug-in electric car sales by 60%, from nearly 50,000 to over 80,000 in 2019.
The fuel cell electric vehicles segment is anticipated to grow at the loftiest CAGR during the cast period. This segment's rapid-fire growth is substantially attributed to the adding demand for vehicles with low carbon emigrations, strict carbon emigration morals, growing emphasis on the relinquishment of FCEVs owing to benefits associated with fast refueling, and adding government enterprise and investments for advancing fuel cell technology.
Vehicle Type Insights
On the basis of vehicle type, the electric vehicles market is segmented into heavy commercial vehicles, passenger vehicles, e-scooters & bikes, two-wheelers, and light commercial vehicles. The passenger vehicles segment dominated the electric vehicle market in 2021 with largest revenue share. This is owing to the governments' substantial backing for passenger electric vehicles in these countries.
The light commercial vehicles segment is anticipated to grow at the loftiest CAGR during the cast period. This segment's rapid-fire growth is substantially attributed to the growing consumer awareness regarding the part of electric vehicles in reducing emigrations, surge in demand for electric vehicles to reduce line emigrations, and strict government rules and regulations towards vehicle emigrations.
End-Use Insights
On the basis of end use, the electric vehicle market is segmented into private use, commercial use, and industrial use. The commercial use segment is likely to grow at the loftiest CAGR during forthcoming time period. This segment's high growth is credited to the rise in fuel prices and strict emigration morals set by governments, growing relinquishment of independent delivery vehicles, and the adding relinquishment of electric motorcars and vehicles.
The rapid expansion of this segment can be attributed to rising fuel prices and government-imposed severe emigration morality, as well as the growing relinquishment of independent delivery vehicles and the increasing relinquishment of electric motorcars and vehicles.
Regional Insights
Asia Pacific dominated the global electric vehicle market in 2021 and expected to be the most lucrative region during the forecast period. China is the major electric vehicle market globally as it accounted nearly half i.e. 45% of the global electric vehicle sale. Other countries such as Japan, Korea, and India are also opportunistic markets as the governments of these countries are significantly investing in the EV startup to promote the manufacturing and sale of EVs across the globe. In July 2019, a Japanese firm Mitsui & Co. invested USD 13.3 million in an Indian e-Vehicle startup company, SmartE. The investment would help SmartE to bring multiple synergies in global EV market for its long term growth. Similarly, in June 2019, Toyota Motor Corp. invested USD 2 Bn for the development of electric vehicle in Indonesia.
The government of developing and developed nations are providing subsidies to market players as well as stringent regulations are driving the growth of electric vehicle market in Asia-Pacific region. China's Ministry of Transport provides subsidies and other incentives for the development of low-emission bus fleets, affecting the market even more favorably. Despite the COVID-19 outbreak, Chinese bus manufacturers sold 61,000 additional new energy buses in 2020.
Europe and North America witness substantial growth in the global electric vehicle market. This is attributed to the increasing demand of electric vehicles in U.S., Norway, France, and Germany. Germany and Norway are the leading markets in European region that witnesses a CAGR nearly 40%. Moreover, for the promotion of electric vehicles in North America policy makers, automotive manufacturers, and charging network companies have launched a non-profit organization called ‘Veloz’. The organization aimed at attracting innovation, investment, marketing, and growth of the electric vehicles market. Electrify America, a U.S. based electric vehicle manufacturer, announced to invest USD 2 Bn in Zero Emission Vehicle (ZEV) infrastructure across U.S. over 10 years from 2017 to 2027 out of which USD 800 Mn were invested in California, one of the largest ZEV market across the world.
The upsurge in the growth of the electric vehicles market in the European region is highly attributed to the harmonious developments in implementing strict emigration regulations by the European Union and adding focus on reducing the number of conventional buses. Norway leads the way for electric mobility relinquishment in Europe. The share of battery electric vehicles in new auto deals raised to 54.3% in 2020, and it's anticipated to surpass 65% of the market share in 2021.
The U.S. is dominating the electric vehicle market in the North America region. The rising demand for electric automobiles in the U.S. accounts for this proportion. In addition, Electrify America, a non-profit organization dedicated to promoting electric vehicle adoption, announced intentions to invest $200.0 million in California in 2018. As a result, over the projection period, demand for electric vehicles in North America is expected to rise.
Key Developments in the Marketplace:
Key Companies & Market Share Insights
The global electric vehicle market is consolidated with high competition owing to presence of large number of market players. The existing players are significantly focused towards innovation and development of new models and technology to overcome the drawbacks and strengthening their roots in the global market. Some of the market players are also investing in EV startups to boost their regional presence. In December 2019, an electric vehicle startup, Rivian, raised USD 1.3 billion fund from Amazon.com Inc. and U.S. based automaker Ford Motor Co.
Furthermore, rising initiatives from governments of several regions towards environmental depletion from CO2 emission has forced the automakers to switch towards battery-powered or electric vehicles. Merger, acquisition, partnership, and joint venture are the strategies adopted by the companies to retain their market position. For instance, in March 2019, Alternet Systems, Inc. announced its merger and acquisition pipeline for the expansion of electric vehicle technology innovation and its production capacity. Some of the prominent players in the electric vehicle market include:
Segments Covered in the Report
This research report estimates revenue growth at global, regional, and country levels and offers an analysis of present industry trends in every sub-segment from 2017 to 2030. This research study analyzes market thoroughly by classifying electric vehicle market report on the basis of different parameters including product and region as follows:
By Propulsion Type
By Components
By Vehicle Type
By Vehicle Class
By Top Speed
By Vehicle Drive
By EV Charging Point Type
By V2G
By Geography
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