Electric cars have several advantages over conventional fuel-powered vehicles, including low operating costs, zero carbon emissions, and others because they are powered by electricity. Consumers' changing attitudes toward electric cars are boosting market growth as they become more concerned about environmental pollution. One of the major factors driving the growth of the electric car market is the increase in electric car sales worldwide. Due to the rising environmental consciousness, consumer preference is rapidly shifting toward passenger and commercial electric cars. Additionally, increased production and sales of luxury cars worldwide due to rising disposable income accelerates market growth. The increased demand for these improved vehicles drives up vehicle production.
The COVID-19 virus negatively impacted the electric car market due to the strict lockdowns and social distancing implemented to contain the virus's spread. Economic uncertainty, a partial business shutdown, and low consumer confidence all impacted demand for an electric cars. During the pandemic, the supply chain was hampered by delays in logistics. However, due to the easing of restrictions, the electric car market is expected to pick up speed in the post-pandemic scenario.
Electric Car Investment is Rising, which is a Notable Trend
Electric car market growth is thought to be fueled by the increasing investment in electric mobility. Market participants like Daimler AG, Ford Motor Company, and Groupe Renault are investing more money into their plans to make the electric car. For instance, Ford announced its intention to invest USD 300 million in developing a new light commercial vehicle at its Romanian manufacturing facility in 2023. Major corporations like Daimler AG and Mercedes Benz are also investing significantly in producing electric cars. Consequently, it is anticipated that the market will grow steadily over the coming years.
Inadequate Infrastructure for Charging is Limiting the Market Growth
Governments from many nations are promoting the use of electric car for commercial purposes to reduce greenhouse gas emissions. However, the electric car market is hampered by a lack of adequate charging infrastructure. In India, for instance, the goal is for all vehicles to be electric by 2030. One of the crucial conditions to guarantee the adoption of electric cars, though, is the development of a strong infrastructure for them. Unfortunately, most developing nations' EV charging infrastructure is insufficient and has not yet caught up to meet the demand, impeding the expansion of the market for electric cars.
Based on propulsion, the electric car market is segmented into BEV, FCEV, PHEV, and HEV. The HEV category dominated the market in 2021. The HEV offers both the choice of fuel-based and electric driving, especially in areas with a lack of readily available charging infrastructure. As governments and commercial organizations seek to set up a global network of charging infrastructure to facilitate the use of green energy, the demand for battery electric cars is growing. Additionally, the PHEV market is expanding steadily. In the upcoming years, it is anticipated that the demand will increase due to the vehicles' falling prices.
By technology, the market is segmented into less than 100 kW and 100 kW to 250 kW. The 100 kW to 250 kW category dominated the market in 2021. The increasing efforts by top automakers to build a more potent electric car, tightening rules to cut exhaust emissions, and expanding adoption of the electric car in developed nations are mostly responsible for this segment's rapid rise.
By application, the market is segmented into Private and Commercial. The private category dominated the market in 2021 due to rising sales and demand for passenger cars in the Asia-Pacific. Due to the presence of original equipment manufacturers for electric cars manufacturers and other automakers in the region, the adoption rate of electric cars is high in Asia-Pacific. During the forecast period, these factors will support this segment's growth. On the other hand, the commercial vehicle market is anticipated to expand in the upcoming years due to ongoing advancements in batteries that increase the capacity of commercial vehicles.
Asia Pacific is projected to hold the largest electric car market share over the forecast period due to the rise in passenger automobile demand in developing countries. China makes up the largest portion of passenger cars and other vehicles. China is the largest market globally, with nearly half, or 45%, of all-electric car sales worldwide. Other nations like Japan, Korea, and India are also opportunistic markets because their governments are heavily investing in companies to encourage producing and selling of electric cars worldwide.
On the other hand, the Europe electric car market is anticipated to grow significantly over the forecast period. The regional government's initiatives to cut carbon emissions have been the key driver of the market's expansion across Europe. The U.K., Germany, and France are the key nations that support the region's expansion. Additionally, the European automotive market will benefit from the quick adoption of fuel-efficient vehicles. Furthermore, it has been noted that the less developed nations are far behind in terms of estimated market share due to a lack of capital and charging infrastructure.
LIST OF KEY COMPANIES PROFILED:
- Nio Inc. (China)
- Alcraft Motor Company Ltd. (U.K.)
- BMW Group (Germany)
- BYD Company Ltd. (China)
- Daimler AG (Germany)
- Faraday & Future Inc. (U.S.)
- Ford Motor Company (U.S.)
- General Motors Company (U.S.)
- Honda Motor Co., Ltd. (Japan)
- Hyundai Motor Company (South Korea)
- Nissan Motor Co., Ltd. (Japan)
- TATA Motors Limited (India)
- Tesla, Inc. (U.S.)
- Volkswagen AG (Germany)
- Mahindra and Mahindra Ltd. (India)
KEY INDUSTRY DEVELOPMENTS:
- April 2021: Toyota introduces the Toyota bZ, a new BEV series. Toyota Motor Corporation unveiled its new complete BEV model line, the Toyota bZ. By 2025, the business intended to release 15 BEV vehicles, including seven new Toyota bZ series BEVs.
- October 2020: BYD and Hino Signed an Agreement to Form a Joint Venture for the Development of Commercial BEVs. A joint venture agreement was struck by Hino Motors, Ltd. (Hino) and BYD Company Ltd. to create a new business for developing commercial BEVs.
|Unit||Revenue (USD Million) and Volume (Kilo Tons)|
|Segmentation||By Propulsion, By Power Output, By End Use and By Geography|
|By Power Output||
|By End Use||