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The electric vehicle (EV) market size is forecast to increase by USD 343.01 billion at a CAGR of 13.51% between 2023 and 2028. The market is expanding due to a growing demand for low-emission vehicles, driven by stringent regulations and declining prices of lithium-ion batteries. The increasing interest in eco-friendly vehicles and regulatory compliance are key drivers of market growth. Additionally, reduced battery costs further support the market expansion. These factors collectively contribute to the adoption of sustainable transportation solutions, reshaping the landscape of the automotive industry. The report provides market size, historical data spanning from 2018-2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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The market is experiencing rapid growth with increasing new car registrations driven by zero-emission targets and the decarbonization challenge. Governments worldwide are implementing CO2 emission standards and offering stimulus measures, tax benefits, and subsidies to boost adoption. Investments in public transportation and EV charging infrastructure are expanding, with advancements like smart charging and vehicle-to-grid (V2G) technology. Key players are focusing on enhancing automotive lithium-ion batteries for battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV), and hybrid electric vehicles (HEV), improving battery production and energy density while optimizing battery chemistry to reduce GHG emissions and combat climate change. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market growth is significantly driven by stringent rules and regulations on vehicles, particularly concerning emissions. There is a notable trend towards tightening emission regulations at both city and national levels, with various countries enacting rules to monitor vehicle emissions. Regional regulations vary based on governmental policies and existing regulations, with many countries adopting previous versions of European or United Nations Economic Commission for Europe mobile source emission regulations.
Furthermore, some nations have implemented more advanced regulations based on recent revisions in the US and Europe. For example, Norway, a leader in adopting Electric Vehicles (EVs), aims to have Battery Electric Vehicles (BEVs) constitute 100% of its new car sales by 2025. Similarly, countries like California, France, and the UK have announced plans to end sales of combustion engine-based vehicles by 2040. While these regulations pose challenges, they also present new opportunities for electric vehicle market players. Thus, these factors are driving market growth during the forecast period, with a focus on zero-emission targets and decarbonization.
Charging stations powered by renewable energy is an emerging trend in the market. As the world shifts toward sustainable and energy-efficient modes of transport, EVs are slowly becoming popular. With more electric car fleet operators opting for the electrification of vehicles and more consumers owning EVs, the demand for electricity will significantly rise. Hence, with the growing demand for electricity, utility companies are expected to shift to an alternative source of electricity. A cost-efficient and practical solution to address the growing electricity demands is to use renewable energy as an alternative.
Furthermore, the growing adoption of renewable energy will further propel the global EV market as the burden on the power grid will be lesser. Consequently, the use of renewable energy to power the EV charging stations is expected to reduce the burden of electricity generation from the power grid and make the electrification technology more environmentally friendly. Charging stations powered through solar panels is one such trend, which can be witnessed in the market in focus. Therefore, such factors will fuel the market growth during the forecast period.
The high manufacturing cost of EVs is a major challenge impeding market expansion. The cost of manufacturing EVs is higher than gas-powered vehicles, which is a big hindrance to the growth of the global electric vehicle market. The high cost of production restricts automakers from manufacturing more units of EVs. Furthermore, the high price of EVs makes them less affordable for many consumers, especially in countries with low economic growth.
Furthermore, the lack of awareness among consumers about various incentives provided by the government adds to the anxiety in consumers about buying EVs. The cost factor remains a significant concern and an important factor for consumers while buying vehicles. Hence, the high cost of EVs is potentially a challenge to the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The BEV segment is estimated to witness significant growth during the forecast period. A battery electric vehicle (BEV) is an EV powered by a battery. Unlike the PHEV model, the only source of propulsion is the battery, which generates the power required by the vehicle. Instead of a fuel tank, a large battery is used to store the required energy to run the electric motor.
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The BEV segment was the largest segment and was valued at USD 152.02 million in 2018. A BEV is a 100% pure EV. Some of the most popular models of BEV available in the market as of 2019 are Tesla Model 3, Nissan LEAF, and Renault ZOE. Some of the benefits of using BEVs are from the market players' point of view, BEV is one of the most manufactured vehicle types due to its ease of manufacturing. Thus, such factors will drive market growth through this segment during the forecast period.
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APAC is estimated to contribute 47% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. From the automotive industry's point of view, APAC is the most diverse region in the world. It is a major producer as well as consumer of vehicles, with many major vehicle manufacturers, such as BYD, Mahindra, and Nissan, based out in the region. Japan, South Korea, Singapore, Indonesia, Thailand, Malaysia, and the Philippines remain the key markets, with China leading in the EV adoption rate.
Furthermore, various countries in APAC are facing major challenges, such as traffic congestion and deteriorating urban air quality. With the growing urbanization, mobility needs are also rising, which, in turn, is increasing the demand for conventional fuel significantly. Increased import bills of oil and gas have shifted the attention of various governments in the region toward more sustainable and low-emission vehicles such as EVs. EVs enable countries in the region to alleviate mobility issues and also help governments reach emission targets and reduce dependence on oil and gas imports. Therefore, factors like these will fuel the regional market during the forecast period.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The EV market is experiencing significant growth with increasing new car registrations and rising global EV sales. As the electric vehicle industry expands, governments worldwide are setting ambitious zero-emission targets to address the decarbonization challenge and meet CO2 emission standards. Stimulus measures, including tax benefits and subsidies, encourage the adoption of electric cars across various segments, including passenger cars, public transportation, and E-scooters. The market encompasses a wide range of vehicles, including light commercial vehicles (LCV), heavy-duty trucks, and buses, supported by a growing EV charging infrastructure with public charging points and smart charging solutions.
Furthermore, EV parts like automotive lithium-ion batteries drive EV battery demand, emphasizing battery production and battery chemistry innovations for improved energy density and battery packs. With a focus on reducing GHG emissions and combatting climate change and air pollution, the EV market is poised for continued growth and development. Further, the EV sector is rapidly evolving with increasing electric vehicle sales and the expansion of the electric car industry. With a focus on reducing CO2 emissions and promoting sustainability, governments, particularly in European governments, are driving initiatives to electrify the transportation industry. This includes the adoption of electric two-wheelers and three-wheelers alongside the development of EV chargers and charging technologies.
Additionally, the market encompasses a variety of vehicles, including battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV), hybrid electric vehicles (HEV), and FCEVs supported by robust EV manufacturing plants and manufacturing process ecosystem and EV battery supply chain. Raw materials such as nickel are crucial for battery production, emphasizing the importance of sustainable sourcing and smart energy management solutions to minimize electricity consumption and reduce the carbon footprint. Additionally, the shift away from internal combustion engine (ICE) cars towards EVs is driving the development of EV fast charging infrastructure and advancements in solid-state batteries and fuel cell technology, signaling a transformative era in the automotive industry.
Market Scope |
|
Report Coverage |
Details |
Page number |
169 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 13.51% |
Market Growth 2024-2028 |
USD 343.01 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
12.72 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 47% |
Key countries |
US, China, Japan, Norway, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bayerische Motoren Werke AG, BYD Co. Ltd., Chery Automobile Co. Ltd., Chongqing Changan Automobile Co. Ltd., Dongfeng Motor Group Co. Ltd., Ford Motor Co., Geely Auto International Corporation, General Motors Co., Guangzhou Automobile Group Co. Ltd., Honda Motor Co. Ltd., Hyundai Motor Co., Mahindra and Mahindra Ltd., Mercedes Benz Group AG, Nissan Motor Co. Ltd., Renault SAS, SAIC Motor Corp. Ltd., Stellantis NV, Tesla Inc., Toyota Motor Corp., and Volkswagen AG |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Charging
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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