Electric Vehicle Market Size, Share & Covid-19 Impact Analysis, By Vehicle Type (Passenger Car and Commercial Vehicle), By Type (Battery Electric Vehicle (BEV), Plug-In Hybrid Electric Vehicle (PHEV), and Hybrid Electric Vehicle (HEV)) and Regional Forecasts, 2020-2027

The global electric vehicle market size was USD 273.22 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with EVs witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global EV market will exhibit a growth of -9.7% in 2020. The market is projected to grow from USD 246.74 billion in 2020 to USD 985.72 billion in 2027 at a CAGR of 17.4% in the 2020-2027 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The rise in fuel prices and the environmental impact of traditional fuel vehicles have opened the door to alternative fuel vehicles on the market. Consumers are increasingly inclined to use hybrid or battery-powered cars, which is expected to drive the market. All EV models use one or more electric motors for propulsion. Electricity is the main energy source for EVs. There is no internal combustion engine among them. On a global scale, conventional cars are one of the main causes of air pollution. Therefore, it forces many governing bodies to impose strict emission vehicle regulations on car manufacturers to curb vehicle emissions. In recent years, the demand for Plug-In Hybrid Electric Vehicle (PHEV) and Battery Electric Vehicle (BEV) is increasing considerably among consumers because these vehicles do not use traditional fuels such as diesel or gasoline as power. The maintenance cost of EVs is also considerably less, which gives it an advantage over the traditional fuel-based vehicles.

Market to Show Positive Signs of Recovery Post COVID-19 Lockdown

The COVID-19 pandemic had a severe impact on the global automotive industry, the lockdown caused due to the pandemic led to the closure of several automotive production facilities. However, the sales of all types of EVs improved post-June 2020 as the lockdown lifted in most of the countries. Especially the sales of MEV & HEV were dominant. The 2022 to 2024 period is considered to be the most optimistic period for EV sales as manufacturers are planning to launch new vehicles in this period. Moreover, the reduction in battery prices and government support for vehicle electrification are anticipated to keep the market growth buoyant over the next few years.

LATEST TRENDS 

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Increasing Investments in Electric Cars to Drive the Market

The increasing investment in EVs is considered to be a driving force for the growth of the market. Companies such as Groupe Renault, Ford Motor Company, and Daimler AG are investing heavily in their plans to produce EVs. For instance, Daimler AG invested USD 20 billion in 2018, for the procurement of EV batteries. Major companies such as Ford Company and Mercedes Benz are also investing heavily to produce EVs. Therefore, the market is expected to experience long-term growth during the electric vehicle market forecast period.

DRIVING FACTORS

Favorable Government Subsidies and Policies to Promote Electric Vehicle Sales

Governments are providing attractive policies and incentives to promote the sales of EVs. It provides consumers with multiple benefits, such as reduced selling prices, zero or low registration fees, and free charging infrastructure of EVs at multiple charging stations. Besides, the government exempts purchase tax, import tax, and road tax based on different subsidies. These subsidies have also encouraged automakers to increase their production of EVs. In addition, the government has also invested in infrastructure construction and formulated favorable policies. For instance, the U.S. government is planning to invest USD 287 billion in highway developments over the next five years. In addition, the government shall also be developing EV charging stations across the U.S. to support the development of EVs in the country.

Strict Government Regulations on Vehicle Emissions to Promote Market

In order to reduce the amount of greenhouse gas emissions in the atmosphere, governments of many countries in the world have implemented strict vehicle emission regulations. In Europe, the European Union has formed a regulation to reduce the CO2 emissions of light and medium commercial vehicles by 15% before 2025. The Petroleum Ministry of India mandated all automotive manufacturers to start manufacturing BS-VI vehicles post 1 April 2020, The decision was aimed at reducing air pollution in the country. The strict steps taken by various governments to curb air pollution are anticipated to boost the EVs industry over the forecast period.

RESTRAINING FACTORS

High Manufacturing Cost to Hinder Market Growth

EVs are superior to conventional vehicles, but the cost is higher than that of gasoline-powered vehicles. This is because these vehicles have not yet achieved economies of scale and because they are not mass-produced. In addition, the absence of infrastructure associated with the development of EVs has proven to be a negative factor, which has affected the growth of the market. Similarly, manufacturing EVs requires a lot of assets and investment, which may also affect the growth of the market.

SEGMENTATION 

By Vehicle Type Analysis

Passenger Car Segment is Expected to Hold the Largest Electric Vehicle Market Share

Based on the vehicle type, the market is segmented into passenger cars and commercial vehicles. The passenger car segment accounts for the major share in the global market owing to increased sales and demand for passenger cars in Asia-Pacific. The adoption rate of EVs in Asia-Pacific is high owing to the presence of EV manufacturers' original equipment manufacturers and other automakers in the region. These factors will help promote the growth of this segment during the forecast period. The commercial vehicle segment is expected to experience growth during the forecast period due to the ever-increasing innovations in the battery of EVs to enhance the load capacity of the vehicle. It also includes expanding the scope and using lighter materials in vehicle design.

By Type Analysis

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Battery Electric Vehicles BEV Segment is Expected to Dominate the Market

Based on the type, the market is segmented into a BEV, plug-in hybrid EV, and hybrid EV. The hybrid EV held the largest market share in 2019, HEV offers the dual option as electric as well as fuel-based driving range, especially in regions with insufficient charging infrastructure availability. The demand for BEV is gaining attention as the governments as well as private entities are planning to deploy a web of charging infrastructure across the world in order to promote the usage of green energy. The PHEV segment is growing at a steady pace, decreasing prices of these vehicles are anticipated to boost the demand in the near future.

REGIONAL INSIGHTS

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Asia-Pacific is expected to show significant growth in the global market owing to the growing demand for passenger cars in developing nations. China accounts for the largest share in terms of passenger cars and other automobiles.

Europe is expected to become the main region. The steps taken by the regional government to reduce carbon emissions have been the driving factor for the growth of the market in Europe. The important countries contributing to the growth of the region are the United Kingdom, Germany, and France. Besides, the rapid adoption of fuel-efficient vehicles will augur well for the market in Europe. North America is expected to witness the highest growth in the market. The regional growth can be attributed to growing initiatives by the Department of Energy (DOE) to build charging infrastructure throughout the U.S. to support the growing number of EVs in the region. 

KEY INDUSTRY PLAYERS

Tesla Inc. is the Top Player in the Market

Tesla Inc. is a California based EV manufacturing company, the Tesla cars are well known for their autopilot mode allowing semi-autonomous features in their car range. Tesla Inc. is known for its innovative product designing, technological enhancements, and quality assurance. In order to fulfil the charging station gap in North America, Tesla constructed a web of charging stations across the U.S. and Canada. The company also built solar power generation plants to make green energy available for the charging stations.

Daimler AG is one of the largest manufacturers of commercial vehicles and high-end automobiles in the world. The company has launched a range of passenger cars, commercial vehicles, and electric buses to support the growing EV demand. Few prominent EVs launched by Daimler include EQC, Smart EQ, GLC F-Cell, Concept EQV among others. Moreover, Daimler AG also provides financing, insurance, fleet management, leasing, and innovative electric mobility services.

LIST OF KEY PLAYERS PROFILED:

• Bayerische Motoren Werke AG (BMW) (Munich, Germany)


• BYD Company Limited (Shenzhen, China)


• Daimler AG (Stuttgart, Germany)


• Energica Motor Company S.P.A (Modena, Italy)


• Ford Motors (Michigan, USA)


• General Motors Company (Michigan, United States)


• Nissan Motors Co. Ltd. (Kanagawa, Japan)


• Tesla, Inc. (California, United States)


• Toyota Motor Corporation (Toyota City‎, Japan)


• Volkswagen AG (Wolfsburg, Germany)


• Groupe Renault (Boulogne-Billancourt, France)


• Jiangling Motors Corporation Limited (Jiangxi, China)


• Lucid Motors, Inc. (California, United States)

KEY INDUSTRY DEVELOPMENTS:

• September 2019 –Volkswagen AG launched New Vehicle ID3 Volkswagen has launched a long-range electric car called ID.3. The vehicle not only communicates with the occupants through voice control but also communicates through the smart ID light concept. The LED light strips installed along the vehicle dashboard will change according to the current functions of the vehicle.


• May 2019 – Tesla Inc. Launched New Features in Car Tesla introduced two safety features in its cars, namely lane departure, and emergency lane departure avoidance. The introduction of these safety features can avoid collisions and keep the vehicle in the lane when it is in cruise control mode.

REPORT COVERAGE

An Infographic Representation of Electric Vehicle Market

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The market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the electric vehicle market growth over recent years.

Report Scope & Segmentation