[Research Report] The electric vehicle market is expected to grow from US$ 385.25 billion in 2022 to US$ 1,376.09 billion by 2030; it is estimated to grow at a CAGR of 17.3% from 2022 to 2030.
The electric vehicle market witnessed significant growth in recent years, driven by consumer adoption of EVs, government support and initiatives, and the increasing demand for eco-friendly transportation. Electric Vehicle is defined as vehicle that are power-driven by an electric motor that draws electricity from a battery to drive the wheels and is capable of charging from an external source. Another major driving factor for the Electric Vehicle market is the growing awareness towards sustainable, eco-friendly transportation with huge government investments towards developing smart battery technologies with government funding to promote sustainable transportation. For instance, in November 2021, the US President signed an agreement of Bipartisan Infrastructure Law referred to as the Infrastructure Investment and Jobs Act, under this US$ 7.5 billion of funding for EV charging stations. This investment made the development of the EV charging infrastructure under the US Federal funding programs. Increasing such investment towards the development of EVs and charging infrastructure around the globe is driving the global electric vehicle market growth.
Electric vehicle operates on electricity, which does not require any fuel. In the electric vehicle, the power is converted from the DC battery to the AC battery for the electric motor. The pedal is accelerated to send a signal to the controller that helps to change the vehicle's speed by changing the frequencies of AC power from the battery inverter to the motor. The motor turns and connects wheels through a cog. These electric vehicles run using a motor that requires constant energy from the batteries to operate the wheels.
Different types of batteries include lithium ion, lead acid, lithium-ion polymer, nickel-based, and others. The electric vehicle is designed to replace conventional travel methods that lead to environmental pollution. Stringent government rules and regulations regarding carbon emissions & global agenda to curb environmental pollution drive the electric vehicle market growth. The Global Initiative launched the promotion of the electric bus to make sustainable transportation in Latin America. It aimed to facilitate electric mobility from private and public companies for sustainable, eco-friendly transportation. Another initiative program launched by the United Nations for making clean fuel-based vehicles. This program aimed to reduce vehicular emissions across developed and developing countries, leading to improved urban air quality.
All electric vehicles are also known as battery electric vehicles with an electric motor to drive the vehicles. This electric vehicle uses large traction of the battery packs for powering the electric motor and is plugged in using charging equipment. It runs on electricity and does not require liquid-based fuel components, including a fuel line, fuel pump, and fuel tank. In the electric drive-based vehicle, the auxiliary batteries provide electricity to power the vehicle’s accessories. This device converts high-voltage DC power from their battery packs to low-voltage DC power required to run vehicle accessories and recharges the auxiliary batteries.
Rising electric vehicle sales with growing consumer awareness towards sustainable green transportation is a major driving factor for the electric vehicle market. As per the International Energy Agency (IEA) Report, the electric car sale reached around 10 million in 2022 and is projected to reach 14 million in 2023, representing 35% year-on-year growth. Globally, around 14% of cars sold are electric cars in the market. Under the IEA Report Stated Policies Scenario (STEPS) policies, the global share of electric car sales is projected to be 35% under existing policies. In the global projections, China remains dominant in the electric cars market, which is expected to account more than 40% of total electric vehicle sales by 2030.
Increased Demand for Eco-friendly Transportation to Drive Growth of Electric Vehicle Market
The increased demand for sustainable transportation and growing consumer preference towards eco-friendly vehicles drive market growth. Electric Vehicles are convenient to travel and do not require fuel to run. Rising demand for eco-friendly transportation and growing stringent carbon dioxide emission rules and regulations drive market growth. In collaboration, the United States government and the European Union have passed legislation to reduce carbon dioxide emissions and to match the electrification demands. The European Union has adopted new carbon dioxide standards for its vans and cars aligned to meet the 2030 goals. Also, the United States government launched the Inflation Reduction Act that combines the Advanced Clean Cars II rule to reduce vehicle emissions. Implementing such acts and rules for the carbon dioxide emissions standards from the US and European Union for environmental protection is driving the demand for the global electric vehicles market.
Rising battery manufacturing by the key players with the surge in government support and initiatives are also driving the global electric vehicle market growth. Venture capital start-up firms invested over US$ 2.1 billion in 2022 to develop batteries and EVs. Increasing sales of new electric vehicles by global companies from emerging markets to offer more affordable electric vehicle models drives the market growth. Tesla, one of the electric vehicle manufacturers, sold more than 421,000 units in the first half of fiscal year 2021. Also, the company launched different variants of electric vehicles in recent years. The company currently has four electric car models added to its portfolio. The models include Model X, Tesla Model S, Model 3, and Model Y. The company also planned to enter the Indian market.
The market is segmented into passenger cars and commercial vehicles based on vehicle type. Passenger cars are expected to have the largest share in 2022, owing to the rising sale of large cars and SUVs with electric options. These cars were available in battery electric vehicle options in Europe and China. Also, key players in the market are launching new models of SUVs for individuals around the globe. For instance, in May 2023, Tata Motors, an India-based automotive manufacturer, launched three new models of passenger electric cars for the Indian Market. The models include the Tata Tiago EV, Tata Tigor EV, and Tata Nexon EV. Also, the company planned to launch five more electric cars for the Indian market. The following is a list of the Top 5 upcoming electric cars from Tata Motors in India. Also, in October 2022, BYD, a Chinese electric vehicle manufacturer, launched an electric SUV passenger car for the Indian market.
Based on the components, the market is divided into battery pack & high voltage components, motor, brake, wheel & suspension, body & chassis, low voltage electric, and others. Among these, battery packs & high-voltage components are expected to have the largest share in 2022. This is primarily owing to rising investments by leading players in the market. In March 2023, LG Energy Solution planned to invest more than US$ 5.50 billion in battery plants in Arizona, United States.
The global electric vehicle market comprises North America, Asia Pacific, Europe, the Middle East and Africa, and South America.
Asia Pacific is expected to dominate the global electric vehicle market. Three markets dominated global sales. According to the International Energy Agency Report 2022, China accounted for over 60% of global electric car sales, increasing rapidly due to rising government investments towards electrification and sustainable transportation. In Asia Pacific, electric vehicles are important in achieving net-zero emission levels, particularly owing to government support and initiatives for decarbonizing society. According to the Inter-Governmental Panel on Climate Change (IPCC), in 2021, greenhouse gas emissions from the transportation sector accounted for more than 15% of carbon dioxide emissions globally. To decarbonize society, road electrification is increasing rapidly with rising demand for EVs, coupled with clean energy, and reducing carbon emissions is the key factor. Nationally Determined Contributions (NDC) across the Asia Pacific countries planned to address climate change under the France-based Paris Agreement. Asia Pacific region has started prioritizing e-mobility and decarbonizing the transportation sector as an NDC implementation part. Also, battery-powered electric vehicles are accelerating at a rapid pace with the implementation of government rules and regulations. In 2021, electric vehicle sales increased twice compared to the previous year. This is owing to supportive government regulatory frameworks and economic incentives.
Further, in Europe and North America, electric vehicle sale is increasing rapidly due to government support, availability of the charging infrastructure and growing consumers' preference for eco-friendly transportation. United States President implemented the Bipartisan Infrastructure Law with an investment of US$ 7.5 billion for building the charging infrastructure for EVs and US$ 10.0 billion for clean transportation. Most electric vehicle sales are increasing in advanced economies such as the United States, Canada, Germany, France and Italy. However, the high investment required, the lack of charging facilities in developing nations, and the high cost of electric vehicles hinder the market growth.
Key Player Analysis:
The Electric Vehicle market analysis consists of the players such as BMW Group, Volkswagen AG, Group Renault, Daimler AG, General Motor Company, SAIC Motors, BYD Company Ltd., Nissan Motor Corporation, Tesla, and Toyota Motor Corporation are the top two players owing to the presence of different electric vehicles models.
Several key players in the market are adopting strategies such as new vehicle launching, acquisitions, collaborations, partnerships and expansion of production capacities to remain competitive. Some of the recent investments, developments and expansion strategies adopted by the key players in the market are as follows:
- In September 2023, Daimler Truck Holding AG, Cummins, and Paccar, Inc. partnered to invest more than US$ 3 billion to expand a battery manufacturing plant for electric trucks. These companies own around 30% of the share in the plant.
- In July 2023, BMW Group planned to invest a considerable amount in India to manufacture electric vehicles in India. The company planned to increase its share of EVs in sales by 25% by 2025 from 9% compared to 2023.
- In May 2023, Volkswagen planned to invest more than US$ 193 billion to expand the batteries and the electric vehicles capacity. The company planned to bolster its production of battery-powered vehicles in North America and China.
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Component, Vehicle Type, Propulsion Type, Drive Type
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
This text is related
to country scope.
The List of Companies
1. BAIC Group
2. BYD Company Motors
3. Daimler AG
4. Ford Motor Company
5. General Motors
6. Mitsubishi Motors
7. Nissan Motor Corporation
8. Tesla Inc.
9. Toyota Motor Corporation
10. Volkswagen AG
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
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We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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