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The global electric vehicle market was valued at USD 163.01 billion in 2020 and is projected to reach USD 823.75 billion by 2030 registering a CAGR of 18.2% from 2021 to 2030.
Due to rising petrol and fuel prices, the demand for fuel-efficient, high-performance, and low-emission vehicles is growing. Strict regulations on curbing vehicular emissions due to environmental concerns will drive the growth of the electric vehicle market during the forecast period.
Technological development and proactive government policies will fuel market growth in the coming years.
Electric vehicles directly convert electricity into movement. This is far more efficient than a conventional car which has to burn fuel and convert it into heat for driving. An internal combustion engine vehicle wastes over half of the energy in its fuel. Whereas an EV converts over 77% of its electrical energy from the grid to power at the wheels. All the excess energy is recovered and stored in the battery for future acceleration. However, gasoline vehicles transfer only 12% to 30% of the energy stored in their fuel for powering the wheels. EVs contain fewer moving parts which mean that the electric motor provides seamless operation and stronger acceleration. Lesser parts mean less maintenance due to reduced wear and tear. In the long term, the annual service costs will decrease significantly. These factors will boost the growth of the electric vehicle market during the forecast period.
Government authorities are setting ambitious targets to reduce greenhouse gas emissions. For instance, in December 2021 EPA( Environmental Protection Agency) revised its final standards for emissions control in passenger cars and light trucks. With the 2030 target climate plan, the EU aims to reduce the overall GHG emissions to at least 55% below the 1990 levels by 2030. Vehicles will need to meet strict pollution standards regarding the release of carbon monoxide, hydrocarbons, nitrogen oxides, and particulate matter. Such stringent regulation will drive the growth of the global electric vehicle market in the coming years.
Favorable government policies are supporting the growth of the ev market. Benefits such as free charging infrastructure, tax exemptions, and low registration fees are driving the transition toward electric vehicles. Manufacturers are already looking at viable alternatives for battery technology like sodium-ion, manganese, zinc ion, and others. The advent of autonomous self-driving cars provides exciting possibilities such as reduced accident risk, ease of use, and other value-added features. Taxis and delivery fleets will shift to connected car systems as it leads to savings in fuel consumption and maintenance costs. These technological innovations will drive the growth of the electric vehicle market in the future.
Many key automakers have announced electrification targets. However, there are certain challenges such as range anxiety due to inadequate charging infrastructure. In 2021 the prices of aluminum rose by 70%, and copper by 33%. The costs of key materials for batteries like Lithium Carbonate increased by 150%, graphite by 15%, and nickel by 25% for many parts of 2021. While the prices have gone down a bit the ongoing war and supply-demand mismatch create room for future fluctuations. The global microchip shortage creates additional woes for manufacturers as EVs rely heavily on chips for their electrical components. This will hamper the growth prospects of the electric vehicle market during the forecast period.
Based on type, the battery-electric vehicle segment is expected to dominate the electric vehicle market share.
Based on vehicle type, the passenger segment will grow the highest in the electric vehicle market share owing to government support and strict environmental regulations.
Based on vehicle class, the mid-priced electric vehicles segment will lead the market during the forecast period.
Based on top speed, the 100 to 125 MPH will provide lucrative growth opportunities in the electric vehicle market share in the coming years.
Based on the vehicle drive type, the all-wheel drive will lead the market in the forthcoming years.
Based on region, Asia-pacific will witness significant growth due to the presence of economies like China, Japan, and South Korea. China is the largest EV producer due to stringent government regulations against polluting vehicles, installation of multiple charging points, and incentives for EV buyers.