Electric Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The Electric Vehicle Market was valued at USD 411.02 Billion in 2021, and it is expected to reach USD 1393.33 Billion by 2027, witnessing a CAGR of 19.19% during the forecast period (2022 - 2027).
The impact of COVID-19 on the electric vehicle market was inevitable as it affected almost every other industry in the market. However, the electric vehicle (EVs) market is witnessing substantial growth owing to the swiftly escalating year-on-year adoption rate of mild-hybrid electric vehicles across the globe. For instance, there was a dramatic rise in electric vehicle sales in China and Europe despite the pandemic, showing signs of active market growth during the forecast period.
Over the long term, factors such as the increasing cost of fuel and government initiatives across different geographies to increase awareness about EVs are expected to promote the usage of electric vehicles over the forecast period. Infrastructure for charging stations continue to expand, and countries like China continue to lead the passenger vehicle and urban bus markets owing to a well-established supply chain for batteries and traction motors.
Increased demand for fuel-efficient, high-performance, and low-emission vehicles, as well as increasingly strict laws and regulations on vehicle emissions, as well as lowering battery costs and rising fuel costs, all contribute to the electric vehicle market's growth.
Electric mobility is becoming more popular among governments across the world. Government regulations to phase out fossil fuel-powered vehicles, government expenditures to improve public EV charging infrastructure, and initiatives in the form of subsidies and tax refunds to encourage the adoption of EVs are all likely to contribute to market development. Governments are investing in charging infrastructures, either directly in public charging stations or indirectly by subsidizing private charging stations at homes and workplaces.
Due to various advancements in battery technology and the application of cutting-edge technologies like as ADAS, AI, IoT, and others, the market is expanding. Major corporations are investing much in delivering their products with the most up-to-date characteristics, improving OEM competition and supporting market expansion. Many nations are seeking to adopt electric mobility, but as new vehicles join the market, charging infrastructures remain a major concern.
Key Market TrendsHeavy Investments by Automakers for Electric VehiclesHeavy investments from automakers are expected to cater to the growing demand for EVs and play a major role in the evolution of the electric vehicle market. OEMs offer electric vehicles in different segments ranging from hatchbacks such as Nissan Leaf to high-end sedans like Tesla Model 3. For instance,
In addition, the growing sensitivity of various governments toward a cleaner environment is expected to increase the demand for zero-emission vehicles during the forecast period. Developed nations such as the US, Germany, and the UK are actively promoting the use of electric vehicles to reduce emissions, which is expected to result in the growth of electric vehicle sales.
China to Witness Significant GrowthThe government of China is encouraging people to adopt electric vehicles. The country has already made plans to phase out diesel fuel, which runs the current generation of commercial vehicles, such as trucks. The country is planning to completely ban diesel and petrol vehicles by 2040.
China is a key player in the global electric bus market, and it is anticipated to sustain its dominance during the forecast period. In May 2020, more than 420,000 electric buses were in use in China, which amounts to about 99% of the global fleet. The keen focus on electrification of public transit with prevalent subsidies and national regulations is a major factor contributing to the high share of China in the global electric bus market.
Furthermore, China’s Ministry of Transport offers subsidies and other benefits for developing low emission bus fleets, thereby further positively influencing the market. For instance, 61,000 more new energy buses were sold by Chinese bus makers in 2020, despite the COVID-19 pandemic. Bus production in China accounted for around 15,000 units in 2020. Moreover, in November 2020, Yutong Bus signed an agreement with Qatar Free Zones Authority (QFZA) and Mowasalat to establish a KD factory in Qatar. The company is expected to supply 741 units of e-buses for FIFA World Cup 2022.
Generous subsidies and tight regulations continue to drive most of the growth. Electric vehicles are exempt from license plate lotteries and auctions in some Chinese cities, and this still plays an instrumental role in promoting EVs. After a successful pilot program in selected cities, the Chinese government decided last year to introduce green license plates for new energy vehicles (NEVs) across the country.
BYD, BAIC, Chery, and SAIC are some of the key regional players in the Asia-Pacific electric vehicle market.
Competitive LandscapeMajor players in the global electric vehicle market are Toyota Motor Corporation, Tesla Motors Inc., Volkswagen AG, Honda Motor Company Ltd, General Motors Group, Hyundai Kia Automotive Group, and others.
The key players are collaborating with other players and are investing in new technologies and products in order to gain significant market share. For instance,
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