Electric Vehicles Market Size (2023 – 2030)

Global Electric Vehicle Market was valued at USD 469.66 Billion and is projected to reach a market size of USD 1579.10 Billion by the end of 2030. Over the forecast period of 2024-2030, the market is projected to grow at a CAGR of 22.1%.

Electric vehicles have been around for quite a time, however, gained popularity in recent times due to increasing environmental concerns such as excessive use of energy and fossil fuels. Moreover, with advancements in technology EVs have become more convenient and efficient choices for consumers. Advancements such as lithium-ion battery-operated EVs enabled users to store power for future use and drive for longer ranges. Furthermore, the present demand for electric vehicles has induced manufacturers to incorporate green technology in the making of electric vehicles such as the use of thermal efficient heating and cooling systems in EVs, eco-friendly interior materials for cars, use of carbon fiber composites for reducing the weight of electric vehicles. Moreover, the demand for energy efficiency has increased the demand for wireless charging EVs that are based on solar power. The future holds positive for the EV industry as manufacturers constantly innovate the battery technology and make use of sustainable materials for producing electric vehicles. Moreover, government support in the form of setting up fast-charging infrastructure at various charging stations in an area.

Key Market Insights:

As per IEA (International Energy Agency), electric vehicles record exponential growth and have witnessed an increase in sales of about 10 million in the year 2022.

Moreover, in 2022, light-duty vehicles accounted for the highest share in the market. China accounted for 6 million sales in light-duty electric vehicles, followed by Europe, accounting for sales of 2.7 million.

Furthermore, due to the increasing usage of advanced software in electric cars such as advanced infotainment and monitoring systems, employment of software developers is projected to increase by 26% from 2021 to 2031. (US Bureau of Labor Statistics)

US Department of Energy found that EVS create 3932 lbs of CO2 per year, which is much less compared to conventional gasoline vehicles that release 11,435 lbs of CO2 per year.

Electric Vehicles Market Drivers:

Growing environmental concerns has boosted the demand for Electric Vehicles in the market.

As consumers become aware of the ill effects of pollution caused by vehicles, especially cars, has gradually shifted consumer demand towards energy-efficient and sustainable driving options, such as electric vehicles. Electric vehicles help in reducing greenhouse gas emissions as they are powered by electricity and do not consume fossil fuels. Moreover, research by the European Energy Agency found that carbon emissions of an electric car are around 17-30% lower than conventional petrol or diesel cars. Further, they also help in improving the air quality by reducing the emission of nitrogen oxide that poses serious harm to human health, leading to respiratory diseases. Furthermore, the production of EVs has promoted the use of renewable sources of energy such as solar energy in powering vehicles. This has further shifted the focus of the governments of various nations to utilize and promote solar energy and enhance the EV industry.

Technological developments in the automotive industry have boosted the demand for electric vehicles in the market.

With the advent of technology, the effectiveness of the automotive industry increased and contributed to environmental conservation. Electric vehicles are equipped with high-end components such as instant torque delivery and faster acceleration. Further, electric vehicles are known to reduce noise pollution as they lack internal combustion engines and therefore remain completely silent while driving. Further, increasing demand for car entertainment systems, modern EV cars are equipped with high-tech touchscreens, advanced connectivity features, and advanced infotainment systems with energy-efficient ambient lights. Moreover, AI integration with electric vehicles offers real-time data to drivers regarding traffic, potential short routes, and others. Additionally, with the help of remote monitoring drivers can manage the battery, control the vehicle’s temperature, and check the health of the battery. Further, many cars are now coming with AR-enabled head-up displays that provide real-time navigation instructions to drivers and help in reducing road accidents. Furthermore, growing trends in energy-efficiency technologies led to the development of vehicle-to-grid systems that enable electric vehicles to provide the unused electricity stored in their batteries back to the public power grid. This extra energy can then be used for powering houses, buildings, and any structure that requires power. Moreover, this can be beneficial to areas with low electricity or to remote regions.

Electric Vehicles Market Restraints and Challenges:

High initial costs can dampen the market growth of electric vehicles. EVs require efficient and faster components and robust charging infrastructure that can become a burden on the car manufacturing company as well as on the government, leading to a decline in demand for EVs in the market.

Limited charging infrastructure, especially in developing countries can reduce the demand for electric vehicles in the market.

Electric Vehicles Market Opportunities:

The Global Electric Vehicles Market is anticipated to deliver lucrative opportunities for businesses, which include acquisitions, partnerships, collaborations, product launches, and agreements during the forecasted period. Furthermore, due to the increase in demand for energy-efficient and faster automotive technologies, there is an increase in demand for electric vehicles in the market. Moreover, fluctuating fuel prices and over-excessive consumption of fossil fuels are predicted to develop the market for electric vehicles and enhance its future growth opportunities.

ELECTRIC VEHICLES MARKET REPORT COVERAGE:

Electric Vehicles Market Segmentation: By Vehicle Type

• Plug-in Hybrid Electric Vehicle

• Battery Electric Vehicle

• Hybrid Electric Vehicle

• Others

In 2022, based on market segmentation by vehicle type, battery electric vehicle occupies the highest share of about 20% in the market. Battery electric vehicles are vehicles that are completely operated on batteries and do not have an internal combustion engine, hence contributing to a reduction in greenhouse gas emissions. Moreover, BEVs produce zero tailpipe emissions and hence are considered as an eco-friendly driving option by consumers.

The hybrid electric vehicles segment is the fastest-growing segment during the forecast period. HEVs are not entirely electric and therefore have an internal combustion engine along with an electric motor. Moreover, the electric motor helps in reducing carbon emissions and increase fuel efficiency. However, HEVs cannot be charged externally and therefore are charged via regenerative braking and internal combustion engines. That is, the vehicle captures the energy lost during braking by utilizing the electric motor as a generator and then stores the captured energy into the battery. Further, due to their energy and fuel efficiency, hybrid electric vehicles are witnessing an increase in demand in recent years. According to Reuters, the US sold 76% of hybrid EVs in 2021. Additionally, Toyota emerged as one of the market leaders in the USA, as it sold 73% of alternatively powered vehicles in 2021.

Electric Vehicles Market Segmentation: By Range

• Short Range (up to 150 miles)

• Medium Range (151-300 miles)

• Long Range (Above 300 miles)

In 2022, based on market segmentation by range, medium range (151-300 miles) occupies the highest share of about 22% in the market. Medium-range EVs are increasingly used due to their long driving range and fuel efficiency making it the fastest-growing segment as well. Moreover, they are widely used for commuting to long-distance areas and road trips. Additionally, this range of EVs is suitable for passenger vehicles.

Electric Vehicles Market Segmentation: By Component

• Battery Pack & High Voltage Component

• Low Voltage Electric Component

• Wheel & Suspension

• Electric Motor

• Body & Chassis

• Others

In 2022, based on market segmentation by component, battery pack & and high voltage components occupy the highest share of about 21% in the market. A battery pack is the most essential component of an EV, as it stores the power and supplies power to the car. Furthermore, high-voltage components such as inverter, air conditioners, generator, and DC-DC converters helps in managing the flow of electricity inside the EV.

The electric motor segment is the fastest-growing segment during the forecast period. The electric motor is the key component of an EV, as it converts the electrical energy of the battery into kinetic energy to run the vehicle. Moreover, increasing demand for high efficiency, lightweight, high-power density, and affordable EV motors has led to the development of more adaptable and advanced electric motors such as axial flux motor, in-wheel motors, and recent trends in SynRM-IPM electric motor has witnessed an increased in demand, as these motors offer enhanced speed and increase in saliency.

Electric Vehicles Market Segmentation: Regional Analysis

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

In 2022, based on market segmentation by region, Europe occupies the highest share of about 29% in the market. Prime center of producing technologically advanced cars, continuous innovations by automotive manufacturers, and government support in the form of subsidies and tax breaks for car manufacturers have contributed to the growth of electric vehicles in the region. Moreover, Norway is the market leader in the share of electric car sales of up to 88% in 2022.

Asia-Pacific is the fastest-growing region during the forecast period. Rising environmental concerns as a result of an increase in air and noise pollution, continuous technological advancements, and government support in the form of policies, incentives, subsidies, and the setting up of charging infrastructure. Moreover, China is the market leader in terms of electric car sales and registration. As per the International Energy Agency, China accounted for 60% of new electric car registrations globally in the year 2022. Furthermore, government initiatives in the electric vehicle industry in India boosted the demand for EVs in the country. For instance, the GST on electric vehicles is reduced from 12% to 5% and the GST on charging stations and chargers for EVs has been lowered from 18% to 5%.

COVID-19 Impact Analysis on the Global Electric Vehicles Market:

The pandemic hurt the electric vehicle industry. Due to the lockdown, the automotive, semiconductor, and electronics industries along with other industries witnessed a slowdown, which declined the demand for EVs in the market. Further, travel restrictions reduced the need for EVs and hence shifted consumer purchasing preferences towards necessity items during the pandemic. Moreover, supply chain disruption caused a slowdown in the production of EVs, as the components required to build electric vehicles witnessed a delay in transfer across geographical boundaries.

Latest Trends/ Developments:

The global Electric Vehicles Market is reasonably split and fragmented with the existence of several global companies. These players are motivated to achieve higher market share by implementing different strategies, such as acquisitions, partnerships, and investments. The EV market witnessed an increase in recent years, due to growing environmental awareness among the people. Globally, air pollution caused by vehicles resulted in climate change and an increase in greenhouse gases, leading to a surge in demand for electric vehicles. As per the UN Environment Programme, 6.5 million people die annually from exposure to poor quality of air and more than 70% of air pollution-related death is attributed to the Asia-Pacific region. Therefore, Asia-Pacific is witnessing faster growth in terms of production and sales of EVs. China, Japan, and India are market leaders in the EV industry. However, well-established technological infrastructure in Europe is making it dominant in the market. Continuous innovations in the European Automotive Industry, such as the development of ultra-fast chargers, battery-swapping technologies, and wireless charging solutions are another factor driving the growth of EVs in the region.

Furthermore, recent energy-efficient innovations such as vehicle-to-grid technology, wireless charging, and the development of pop-up and lamp post charges are anticipated to shape the electric vehicle industry. For instance, London-based EV charging company – Urban Electric Networks developed an on-street charging device called UEone that retracts to the ground when not in use. Further, it allows users to remotely monitor the charging activity using a smartphone app. The company trialed six pop-up fast-chargers in Oxford in 2019-20.

Key Players:

1. Tesla

2. BMW

3. Hyundai

4. Toyota Motor Corp

5. Nissan

6. General Motors

7. Ford Motor Company

8. Volkswagen

9. Lucid motors

10. Kia Motors

11. Tata Motors EV

12. Mahindra Electric

• In August 2023, Tata Motors announced the launch of a new EVS for the upcoming year 2024. The new EVs are namely Punch EV, Harrier EV, Nexon EV, and Curvv EV

• In April 2023, BYD launched two full-electric vehicles in Europe namely – BYD Dolphin and BYD Seal. Both the EVs will have high ranges of about 427km and 570km respectively. Moreover, both the new electric vehicles are built on the state-of-the-art BYD e-platform 2.0. Technology.