Electric Vehicle (EV) Market Outlook 2032
The global electric vehicle market was valued at USD 404.13 billion in 2022 and is projected to reach USD 2349.22 billion by 2031, expanding at a CAGR of 21.6% during the forecast period, 2023 – 2031. The growth of the market is attributed to increasing fuel prices and the adverse effects of traditional fuel vehicles.
Growing environmental awareness and rising demand to reduce carbon emissions have sparked a significant shift toward sustainable transportation options globally. As a result, the electric vehicle (EV) market has emerged as a pivotal force in reshaping the future of mobility. Rising concerns over air pollution and climate change have prompted governments worldwide to implement stringent regulations and incentives to promote the adoption of electric vehicles. These initiatives have fueled a growing demand for EVs, driving innovation and investment in the sector.
Increasing advancements in battery technology, coupled with the expansion of charging infrastructure, have addressed concerns regarding range anxiety, thereby bolstering consumer confidence in electric vehicles. Additionally, the role of artificial intelligence (AI) in enhancing EV performance and efficiency cannot be overstated. AI-powered features such as predictive maintenance and intelligent energy management systems are revolutionizing the driving experience, further accelerating the growth of the electric vehicle market.
Market Trends, Drivers, Restraints , and Opportunities
Major Drivers
Growing environmental awareness and the need to mitigate climate change have been significant drivers in the electric vehicle (EV) market. With concerns over air pollution and greenhouse gas emissions on the rise, governments worldwide are implementing strict regulations and incentives to promote the adoption of electric vehicles. These initiatives aim to reduce reliance on fossil fuels and transition toward cleaner, sustainable transportation options.
Rising fuel costs and volatility in oil prices have fueled consumer interest in electric vehicles. As traditional gasoline-powered vehicles become expensive to operate, consumers are increasingly turning to EVs as a cost-effective alternative. The lower operating costs and maintenance expenses associated with electric vehicles make them an attractive option for budget-conscious consumers seeking long-term savings.
Advancements in battery technology have played a crucial role in driving the growth of the electric vehicle market. Increasing investments in research and development have led to improvements in battery performance, energy density, and charging infrastructure. As a result, electric vehicles now offer longer driving ranges, faster charging times, and improved overall efficiency, addressing concerns over range anxiety and charging accessibility.
Growing investments in renewable energy sources such as solar and wind power are driving the demand for electric vehicles market. As the electricity grid becomes cleaner and sustainable, the environmental benefits of electric vehicles are further amplified. Consumers are increasingly drawn to EVs for their lower emissions and for their role in supporting the transition toward a greener energy ecosystem.
Existing Restraints
Growing concerns over charging infrastructure are restraining the electric vehicle market. Despite the expansion of charging infrastructure, there are still significant challenges related to its availability, accessibility, and reliability. In many regions, particularly in rural and remote areas, the charging infrastructure remains inadequate, leading to range anxiety among electric vehicle owners.
Moreover, the variability in charging standards and compatibility further complicates the charging experience for consumers. Addressing these challenges requires substantial investment in charging infrastructure and standardized charging protocols to ensure seamless and reliable charging options for electric vehicle users.
Rising costs of battery technology are expected to hamper the market. While advancements in battery technology have contributed to the growth of the electric vehicle market, the cost of batteries remains a significant barrier to widespread adoption. Lithium-ion batteries, which are the primary energy storage technology used in electric vehicles, account for a significant portion of the vehicle's total cost. Despite declining costs over the years, the price of batteries still represents a substantial upfront investment for consumers.
Additionally, concerns over the environmental and social impacts of lithium-ion battery production, including resource depletion and human rights issues, pose ethical challenges for the electric vehicle industry. Addressing these challenges requires continued research and development efforts to improve battery technology and reduce costs while ensuring ethical and sustainable supply chain practices.
Emerging Opportunities
Rising demand for electric SUVs and crossovers is expected to create lucrative opportunities in the market. As consumer preferences shift toward larger vehicles with greater cargo capacity and versatility, there is a growing demand for electric SUVs and crossovers. Automakers are responding to this trend by introducing a variety of electric SUV models with extended ranges and advanced features. These electric SUVs offer the practicality and performance of traditional SUVs while providing the environmental benefits and cost savings associated with electric vehicles.
Growing investment in charging infrastructure is anticipated to create new opportunities in the market. With the expansion of the electric vehicle market, there is a corresponding increase in investment in charging infrastructure. Governments, utility companies, and private organizations are collaborating to deploy charging stations in key locations such as highways, urban centers, and workplaces. This growing network of charging infrastructure aims to address concerns over range anxiety and provide convenient charging options for electric vehicle owners. Additionally, advancements in fast-changing technology are reducing charging times, further enhancing the appeal of electric vehicles.
Increasing adoption of electric commercial vehicles is a rising trend toward electrification in the commercial vehicle sector. Fleet operators and logistics companies are recognizing the benefits of electric commercial vehicles, including lower operating costs, reduced emissions, and enhanced sustainability. Electric vans, trucks, and buses are being deployed for various applications, including last-mile delivery, public transportation, and freight transport. As battery technology continues to improve and charging infrastructure expands, the adoption of electric commercial vehicles is expected to grow exponentially in the coming years.
Scope of Electric Vehicle (EV) Market Report
The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
Attributes
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Details
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Report Title
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Electric Vehicle Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Vehicle Type (Passenger Cars, Commercial Vehicles, and Two Wheelers), Vehicle Class (Mid-Priced and Luxury), and Types (Battery Electric Vehicles (BEV), Hybrid Electric Vehicles (HEV), and Plug-In Hybrid Electric Vehicles (PHEV)), and Regions
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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Tesla, Nissan, BMW, BYD, Volkswagen AG, Toyota Motor Corporation, Daimler AG, BYD Company Motors, Ford Motor Company, Tata Motors, Bajaj Auto Corp, MG Motor India, JBM Auto Limited, Hyundai Motor India, Groupe Renault, Mahindra & Mahindra Limited, and Hero Electric
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Electric Vehicle (EV) Market Segment Insights
The commercial vehicle segment is expected to hold a major market share of the total revenue during the forecast period
Based on vehicle type, the global electric vehicle market is segregated into passenger cars, commercial vehicles, and two wheelers. The commercial vehicles segment is projected to expand at a rapid pace during the forecast period.
Growth of the segment is attributed to the rising adoption of electric buses in developing countries such as India and China. Various countries are focusing on replacing their existing fuel-based buses with electric buses. Rising trend of replacement of fossil fuel-based vehicles with electric buses are likely to boost the market.
Moreover, advancements in the battery of electric vehicles to improve the load capacity of the vehicle are expected to drive the segment. The growth of logistics, shared mobility, and e-commerce is expected to propel the market during the forecast period.
The two wheeler segment is expected to expand at a substantial CAGR during the forecast period. Transportation poses a challenge in several developing countries and many people in these regions opt for two wheelers. Rising petrol prices encouraged consumers to adopt electric vehicles.
The mid-priced vehicle segment is projected to expand at a robust CAGR during the forecast period
On the basis of vehicle class, the global electric vehicle market is bifurcated into mid-priced and luxury. The mid-priced vehicle segment held a major market share of the total revenue in 2018. The price of batteries is decreasing, which leads to decreasing price of electric vehicles. Mid-class vehicles have few features with limited emphasis on the instrument cluster and infotainment.
Key player in the mid-price vehicle segment is China. Companies like Smart, Great Wall Motors, and BYD are focusing on manufacturing less expensive cars. In 2018, Great Wall Motors declared a partnership with BMW to launch MINI vehicles in China. In December 2018, the company introduced a new flagship vehicle under its new brand, the ‘ORA’ electric car: the ORA R1.
The plug-in hybrid electric vehicle segment held a major market share of more than 30% of the total revenue in 2019
In terms of type, the global electric vehicle market is classified as battery electric vehicles (BEV), hybrid electric vehicles (HEV), and plug-in hybrid electric vehicles (PHEV). The BEV segment is estimated to expand at a CAGR of more than 25% during the forecast period. Growth of the segment is attributed to rising environmental awareness and the multiple advantages of BEV.
The PHEV segment is anticipated to expand at a substantial CAGR of 45% during the forecast period. Government of developing countries such as China and India are taking initiatives to promote the usage of electric vehicles. Moreover, major companies such as Volkswagen Group are concentrating on increasing their sales of plug-in electric cars. The HEV segment provides fuel-based and electric driving base. This feature has increased HEV sales in regions with inadequate charging infrastructure.
The market in Asia Pacific is expected to expand at a robust CAGR during the forecast period
On the basis of region, the global electric vehicle market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Automotive industries in Asia Pacific such as Japan, South Korea, and China are inclined towards technology, development, and innovation of advanced electric vehicles.
Rising demand for decreasing carbon emissions and developing fast and advanced charging stations are estimated to boost the market in the region. Additionally, the presence of major players such as BAIC, BYD, SAIC, and Chery in the region is expected to propel the market.
Several companies are concentrating on manufacturing electric vehicles in China. For instance, Tesla, Inc. has planned to manufacture more than 150 thousand 3s car Models in Shanghai, China. In 2018, Volkswagen Group declared its plan to manufacture 22 billion EVs until 2026. Among that, half of the cars were to be manufactured in China. North America held a considerable market share of around 15% of the total revenue in 2019.
Growth of the market is attributed to initiatives taken by policymakers, automotive manufacturers, charging network companies, and non-profit organizations. Furthermore, in 2018, Electrify America was launched to promote EV adoption and had a plan to invest USD 200 billion in California. Thus, demand for EVs in North America is projected to rise during the forecast period.
Segments
The global electric vehicle market has been segmented on the basis of
Vehicle Type
- Passenger Cars
- Commercial Vehicles
- Two Wheelers
Vehicle Class
Type
- Battery Electric Vehicles (BEV)
- Hybrid Electric Vehicles (HEV)
- Plug-In Hybrid Electric Vehicles (PHEV)
Region
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
- Tesla
- Nissan
- BMW
- BYD
- Volkswagen AG
- Toyota Motor Corporation
- Daimler AG
- BYD Company Motors
- Ford Motor Company
- Tata Motors
- Bajaj Auto Corp
- MG Motor India
- JBM Auto Limited
- Hyundai Motor India
- Groupe Renault
- Mahindra & Mahindra Limited
- Hero Electric
Competitive Landscape
Key players in the global electric vehicle market include Tesla, Nissan, BMW, BYD, Volkswagen AG, Toyota Motor Corporation, Daimler AG, BYD Company Motors, Ford Motor Company, Tata Motors, Bajaj Auto Corp, MG Motor India, JBM Auto Limited, Hyundai Motor India, Groupe Renault, Mahindra & Mahindra Limited, and Hero Electric.
These players adopted strategies such as developing new products, expansion strategies, partnerships, collaborations, and mergers & acquisitions to maintain their position in the competitive market. Developed countries such as Germany, the UK, and the US are encouraging the use of electric vehicles to minimize emissions, which in turn, has increased the sales of electric vehicles.