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The global electric vehicle market was at 2.5 million units in 2018 and it is projected to reach 24.6 million units by 2026, exhibiting a CAGR of 32.3% during the forecast period.
Increasing fuel prices and the impact of conventional fuel vehicles on the environment have opened doors for alternate fuel vehicles in the market. Rising inclination of consumers towards hybrid or battery-powered vehicles is expected to drive the electric vehicle market share. The electric vehicle uses one or more electric motors for its propulsion. Electric power is the main source of energy in the electric vehicle; no internal combustion engine is present in them. Globally, conventional automobiles are one of the major reasons for air pollution and hence, it is compelling many governing bodies to impose stringent emission regulations on automobile manufacturers to curb the emissions from vehicles. Major developing countries are providing incentives to electric or hybrid car buyers by offering them tax exemption, free charging facilities, and free parking.
Electric vehicles are fragmented based on fuel type by battery electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV), and hybrid electric vehicle (HEV). Battery electric vehicle uses chemical energy stored in the battery for its operation. It is an electric vehicle that uses motors in place of IC engines for its propulsion. A plug-in hybrid electric vehicle uses an internal combustion engine and an electric motor for its propulsion.
Plug-In hybrid electric vehicles are powered by conventional or alternative fuel, such as batteries or gasoline. The more the amount of stored electricity in a PHEV vehicle, the less is the rate of fuel consumption. PHEV uses 40-60% of less fuel than traditional gasoline vehicles. This increases the fuel efficiency of the vehicle and reduces the dependency on traditional fuels. Along with external charging, PHEVs are charged from regenerative braking and power from an internal combustion engine. HEV is a combination of both electrical and mechanical drive trains.
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An electric drive train is a blend of an electric motor, battery, and power electronics for its control, whereas a mechanical drive train is a combination of gearbox and transmission to wheels, combustion engine, and fuel tank that consists of traditional fuels, namely, CNG, diesel, and petrol. The electric engine provides power to the HEV at a lower speed and the gasoline engine powers at a higher speed. As this vehicle is powered by two sources, the fuel efficiency is higher than the traditional vehicles. HEVs are also lighter in weight and it, in turn, improves the efficiency of the vehicle.
In the recent years, BEVs and PHEVs are gaining more demand from the consumers as these vehicles are not powered by traditional fuels, such as diesel or petrol. They also have to go through less maintenance than the traditional vehicles. The inclination of consumers towards these vehicles is mainly because of the high pollution level and its effect on the environment, mostly in developing countries. However, the high price of raw materials and a limited range of electric vehicles as compared to the traditional internal combustion engine are anticipated to hinder the electric vehicle market trend.
“Encouraging Government Subsidies and Policies to Promote the Sales of Electric Vehicles”
The governments of various countries are providing attractive policies and incentives with an aim to drive the sale of electric vehicles. Consumers are offered multiple benefits, such as reduced selling prices, zero or low registration fees, and free charging of electric vehicles at several charging stations. Also, an exemption in purchase tax, import tax, and road tax is provided by the government under different subsidies. These subsidies have also encouraged the automotive manufacturers to develop a large number of electric vehicles. Apart from these, governments are also investing in and making favorable policies for charging infrastructure development.
“Stringent Government Regulations Regarding Vehicle Emission to Drive the EV Market”
The governments of several countries around the world are putting forward stringent rules for vehicle emissions in order to reduce the amount of greenhouse gas in the atmosphere. In Europe, a regulation has been set up to cut CO2 emission by 15% for med-light weight commercial vehicles by 2025. India is looking forward to apply countrywide roll-out of Bharat Stage VI (BS-VI), which is similar to the Euro 6 standards that was applied across the European countries back in 2015. China will introduce its own China 6 standard in 2020. It will be the strictest emission regulation globally for light-duty emission standards. California is the leading state with stringent emission regulations across the U.S. Overall, the introduction of stringent government regulations will help in propeling the automotive electric vehicle market growth.
“The Hybrid Electric Vehicle Segment to Grow at a Rapid Rate During the Forecast Period”
The battery-electric vehicle stores chemical energy into its fuel cells of the battery and converts it into electrical energy by utilizing the electrochemical reactions. Lithium-ion batteries are ideal for advanced electric vehicles owing to their abuse tolerance, cold-weather performance, and capability to recharge at fast speed. Owing to these factors, the battery electric vehicle segment will also showcase growth in the market over the forecast period.
“Passenger Car Segment is anticipated to Show Steady Growth Over the Forecast Period”
Based on vehicle type, the EV market share is segregated into passenger car and commercial vehicle. The passenger car segment is anticipated to exhibit dominance in the market over the forecast period owing to increasing sales and demand from Asia-Pacific for passenger cars. Asia-Pacific has a high adoption rate of electric vehicles and the presence of electric cars manufacturing OEMs such as BAIC, BYD, Geely, and SAIC, and others in this region is very high. These will help in propeling the growth of passenger car segment in this market over the forecast period.
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The commercial vehicle segment will also showcase growth over the forecast period. It is expected to occur due to the rising innovations in the battery capacity of electric vehicles in order to enhance the load-carrying capacity of the vehicle. It also includes an extended range and usage of lighter materials in the vehicle design.
Europe is anticipated to emerge as a major region in the electric vehicle market during the given forecast period. The major steps taken by the governments in this region to reduce carbon emissions have been the driving factors for the growth of the electric vehicle market. The significant countries contributing to growth in the region are the U.K, Germany, and France.
Asia Pacific is also expected to showcase significant growth in the market. China is the major player in the region and it accounts for the largest share for the passenger electric vehicle market forecast in the region. The region is anticipated to grow at a faster rate in the market amid the presence of major key players in this region. Technological innovation and high investments in R&D by those key players may help in maintaining the growth this region during the forecast period.
Europe Electric vehicle Market Size, 2018
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North America is anticipated to witness the highest growth in the market amid the rapid adoption of fuel-efficient vehicles. Increasing disposable income across this region and increasing awareness of air pollution among the consumers in this region are anticipated to boost the demand for electric vehicles.
The rest of the world would witness slow growth in the electric vehicle market as the electric vehicle is a new concept and it is expensive to implement. Many people in the underdeveloped countries rely on public transport. Hence, there is less usage of private vehicles.
“Market Players like Tesla Inc., Nissan Motors Co. Ltd., BMW, Geely Automobile Holding Group, would ensure to strengthen the market position concerning providing high efficient electric vehicle”
The electric vehicle (EV) market is highly fragmented with the presence of lots of competitive players around the world. Tesla Inc, Nissan Motors Co. Ltd, BMW, and Geely Automobile Holding Group together form a major portion for providing the electric vehicles in the world.
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"A growing trend is observed in the penetration of the electric vehicle market across all the sectors"
Along with this, the report provides an elaborative analysis of the electric vehicle market dynamics and competitive landscape. Various key insights presented in the report are the price trend analysis, recent industry developments in the EV market, such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, and key retail industry trends, competitive landscape and company profiles.
Volume (Million Units)
By Vehicle Type
Fortune Business Insights says that the electric vehicle market was at 2.5 Million units in 2018 and it is projected to reach 24.6 Million units by 2026.
The electric vehicle market is projected to grow steadily at a CAGR of 32.3% in the forecast period (2019-2026).
The type segment is expected to be the leading segment in the electric vehicle market during the forecast period.
Growing need to curb the emission levels and the increased fuel efficiency provided by the vehicles will be the key factors driving the growth of the electric vehicle market.
Tesla Inc, Nissan Motors Co. Ltd, BMW, and Geely Automobile Holding Group are the top players in the electric vehicle market.
Europe is expected to hold the highest market share in the electric vehicle market.