The global electric vehicle market is expected to grow at CAGR 25.6% during the forecast period, 2019-2026 and will reach over USD 567.2 Billion by 2026.
The increasing popularity of electric vehicles highlights significant efforts made jointly by various governments and automotive industry associations. Ambitious EV targets and policy support from governments have resulted in the lowering of EV costs. In addition, factors such as extended vehicle range and improvement in charging infrastructure have fueled the growth of the electric vehicle market globally.
Growing demand for fuel-efficient and low-emission vehicles
The adoption of electric vehicles (EVs) is rising among consumers focusing on purchasing fuel-efficient vehicles. EVs increase energy security, improve fuel economy, and reduce fuel cost emissions. In addition, growing fuel prices and increasing demand have prompted automotive manufacturers and consumers for adopting alternatives to conventional vehicles running on gasoline and diesel. Furthermore, other factors such as the dynamic developments in policies, implementation of guidelines, and advances in technology are stimulating the demand for EVs. This demand for demand for fuel-efficient and low-emission vehicles will lead to the expansion of the global electric vehicle market at a CAGR of over 31% during the forecast period.
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Technological advances in EVs
Various stakeholders in the automotive industry including system integrators, vehicle manufacturers, engine manufacturers, and component providers are witnessing new opportunities for boosting the adoption of EVs. In addition, vendors are investing more time and energy in R&D to launch electric vehicles with long-range features. Moreover, reduction in the prices of lithium-ion batteries is likely to reduce the overall cost of producing electric vehicles, which in turn, will boost the electric vehicle market growth during the forecast period.
BYD Auto Co., Ltd. (China), Nissan Motor Company Ltd. (Japan), Tesla Motors (US), and Volkswagen (Germany) are some of the leading players in the electric vehicle market. These companies have launched electric vehicles in different segments to cater to the increased demand. Tesla Model S, Nissan Leaf, and BYD Tang are some of the most successful models that have attracted customers toward electric vehicles. Additionally, Panasonic Corporation (Japan), Automotive Energy Supply Corporation (Japan), BYD Auto Co., Ltd. (China), and Samsung SDI (South Korea) are some of the largest battery manufacturers that cater to the global demand for EV batteries.
EV sales are increasing globally, especially in countries such as Japan, China, Germany, France, Netherlands, Norway, the UK, and the US. These countries, with favorable government policies, incentives, and infrastructure investment, accounting for more than 90% of the world’s EV sales. Government funding, subsidies, & incentives, increasing concerns regarding environmental pollution, and huge investments from automakers in EVs is expected to fuel the growth of the global electric vehicle market over the next two years.
Future trends of the global electric vehicles industry
Electric vehicle manufacturers are keen on reducing the weight of a vehicle to improve the driving range. In this endeavor, manufacturers are innovating with lightweight materials to build vehicles. Lightweight materials can decrease the vehicle weight, which in turn can help improve the range of a vehicle. The battery accounts for about 70% of the weight of an electric vehicle. Hence, reducing battery weight is essential for electric vehicle manufacturers to enhance the fuel economy or the range of the electric vehicle. A slight change in the weight of a battery can be crucial for the electric vehicle range.
Advancements in technology have helped to decrease the cost of an electric vehicle. The cost of an electric vehicle battery has reduced significantly in the recent past. Reduction in battery price has attracted new consumers, which in turn has increased the sale of electric vehicles. The price of the battery is measured in terms of USD per kilowatt unit. For instance, In 2010, the battery cost was approximately USD 1,000 per kWh, which has now come down to about USD 450 per kWh.
The limited range of electric vehicles has been one of the biggest challenges for electric vehicle manufacturers. An increase in electric vehicle range per charge is expected to increase the duration between the charging of a vehicle. According to a recent study, the range of electric vehicles is sufficient to fulfill the demand of 80% car users in the US and Europe. Also, with increasing battery capacity and reducing vehicle weight, the range of an electric vehicle is set to increase. These crucial advancements are expected to open new avenues for the growth of the global electric vehicle market over the next few years.
Led by China, the Asia Pacific region has the highest sales of electric vehicles. China is focusing on electric vehicles to deal with rising vehicle emissions in the country. The Chinese government is providing subsidies for the electrification of vehicles, which in turn has increased the sales of electric automobiles in China. The government offers subsidies for pure electric vehicles and hybrids. For instance, the government subsidy includes passenger car purchasing incentives of RMB 55,000 for BEVs and RMB 30,000 for PHEVs. Over the years, the cost of the battery has reduced, which would again have a positive impact on the electric vehicle market in China.
The Electric Vehicles Initiative (EVI), which is a multi-government policy forum dedicated to accelerating the introduction and adoption of electric vehicles worldwide, has set a target of reaching an electric car fleet of 20 million by 2020 globally. The Paris Declaration on Electro-Mobility and Climate Change has also established a similar global deployment target of 100 million electric cars by 2030. These initiatives are expected to provide an impetus to the growth of the global electric vehicle market.
The passenger car segment is estimated to account for the largest electric vehicle market share in 2019. The growth of this segment can be attributed to the availability of financial subsidies and incentives, increasing vehicle range, and the development of charging infrastructure.
Based on Type, the global electric vehicle market is segmented into battery electric vehicle, hybrid electric vehicle, and plug-in hybrid electric vehicle. Hybrid electric vehicle is the largest segment for electric vehicle by type which is most likely to be the largest one of by the end of forecast period. One of the major advantages associated with hybrid electric vehicle is combining conventional internal combustion engine system with an electric propulsion system. Moreover, the presence of electric power train is directed to achieve better fuel efficiency than a conventional vehicle. This has led hybrid vehicle to attain highest market share over other segments, on the spit side, battery electric vehicle segment expected to progress in terms of market share and exhibit largest market share by the end of assessment period. Based on application, the global Electric Vehicle market is segregated into two-wheeler, passenger cars, and commercial cars. Passenger car segment emerged as the global leader in electric vehicle market due to growing in adoption of electric passenger cars as compared to two wheelers and commercial vehicles. Over the next five years, commercial vehicle expected to grow at highest CAGR benefits associate with electric motor engines as compared internal combustion one.
North America dominates the global Electric Vehicle market owing to the adoption of the advanced technology, presence of major players and high spending power of the people. U.S. holds the major share in the global market. High spending power, innovative technology and presence of the major players will support the growth of the market. Europe holds the second leading position in the market followed by Asia Pacific. Germany, France and U.K. are the major shareholders in the market. Asia Pacific is expected to have a huge opportunity in the market. Presence of the developing economy, rapid development in the technology, development in the infrastructure and increasing spending power of the people have driven the growth of the electric vehicle market.
Market by Type
- Battery Electric Vehicle
- Hybrid Electric Vehicle
- Plug-in Hybrid Electric Vehicle
Market by Type of Application
- Passenger Cars
- Commercial Cars
Market by Geography
- North America
- Rest of Europe
- South Korea
- Rest of Asia-Pacific
- Rest of the World
- Saudi Arabia
- South Africa
- Rest of the World
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20+ years of diverse and extensive experience in higher education including teaching, research, and university and community service in overseas universities and colleges.
Associate Editor, and publications in international refereed journals and presented most of them in international conferences in the fields of Applied Multivariate Statistics, Mortality, Social Science, Economics.