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The Global electric vehicle market was valued at US$ 278.7 Bn in 2022 and is estimated to witness a major leap forward in revenue to US$ 72,798 Bn by 2050. The market is registering a CAGR of 21.99% during the forecast period 2023-2050. In terms of volume, the market is registering a CAGR of 21.73% during the forecast period.
According to the International Energy Agency (IEA), the number of electric vehicles on the road reached a record 10 million in 2020, despite the disruptions caused by the COVID-19 pandemic. This represents a 43% increase compared to 2019. The IEA projects that there will be 145 million electric vehicles on the road by 2030, which could reduce global oil demand by 5.3 million barrels per day. It is estimated that electric vehicles will represent 58% of new passenger car sales globally by 2040, and up to 81% in Europe. Furthermore, the report projects that electric vehicles will reach price parity with conventional vehicles by the mid-2020s, due to declining battery costs and rising production volumes.
The growth of the electric vehicle market is also driving the demand for lithium-ion batteries, which are used to power electric vehicles. The report cites the increasing demand for electric vehicles as one of the major factors driving the growth of the lithium-ion battery market.
In addition, the use of electric vehicles has significant environmental benefits. A study by the Union of Concerned Scientists found that electric vehicles emit less global warming pollution than gasoline-powered vehicles, even when the electricity used to charge the vehicles comes from coal-fired power plants. The study found that electric vehicles charged on the average U.S. electricity grid produce global warming emissions equivalent to a gasoline vehicle that gets 80 miles per gallon.
Finally, the electrification of transportation is also creating new opportunities for renewable energy sources such as wind and solar. According to the IEA, electric vehicles could provide a storage solution for excess renewable energy, which could help to integrate more renewable energy into the electricity grid. In addition, the deployment of electric vehicles could help to reduce the need for new fossil fuel power plants, as electric vehicles can charge during off-peak hours when electricity demand is low.
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One of the key drivers of the electric vehicle market is the increasing number of government initiatives to promote the adoption of electric vehicles. Governments around the world are implementing policies and incentives to encourage consumers to switch to electric vehicles, in order to reduce carbon emissions and promote sustainable transportation.
For example, in the United States, the federal government offers a tax credit of up to $7,500 for the purchase of a new electric vehicle, while several states offer additional incentives such as rebates, tax exemptions, and free parking for electric vehicles. In Europe, several countries have set targets for the phasing out of gasoline and diesel vehicles, and offer incentives such as tax exemptions, subsidies for electric vehicle purchases, and free charging at public EV charging stations. In China, the government has implemented a series of policies to promote the adoption of electric vehicles, including subsidies for electric vehicle purchases, tax exemptions, and preferential treatment for electric vehicles in license plate lotteries.
These government initiatives are driving the growth of the electric vehicle market by making electric vehicles more affordable and accessible to consumers. Electric vehicles are projected to reach price parity with gasoline vehicles by the mid-2040s, due in part to declining battery costs and government incentives.
Another driver of the electric vehicle market is the continuous advancements in battery technology. Electric vehicles are powered by rechargeable batteries, and improvements in battery technology are leading to longer driving ranges, faster charging times, and lower costs.
For example, Tesla's Model S Long Range Plus has a range of over 400 miles on a single charge, which is more than double the range of the first-generation Nissan Leaf. In addition, the development of fast-changing technology has significantly reduced the time it takes to charge an electric vehicle, making electric vehicles more convenient for long-distance travel.
Advancements in battery technology are also leading to lower costs for electric vehicles. According to a report by the International Energy Agency, the cost of battery packs has fallen by around 87% since 2010, and is expected to continue to decline in the coming years.
One trend that is emerging in the electric vehicle market is the electrification of commercial fleets. Businesses are increasingly turning to electric vehicles as a way to reduce their carbon footprint and operating costs. This trend is particularly evident in the delivery and logistics sector, where companies are using electric vans and trucks for last-mile delivery.
For example, Amazon has announced plans to have 100,000 electric delivery vehicles on the road by 2030, while UPS has committed to purchasing 10,000 electric delivery vans from Arrival, a UK-based electric vehicle startup. In addition, several major automakers such as Ford, GM, and Mercedes-Benz have announced plans to launch electric commercial vehicles in the coming years.
The electrification of commercial fleets in the global electric vehicle market is being driven by several factors, including the need to comply with increasingly strict emissions regulations, the desire to reduce operating costs, and the availability of government incentives and subsidies for electric vehicles. This trend is expected to continue in the coming years, as businesses seek to reduce their environmental impact and take advantage of the benefits of electric vehicles.
The Fuel Cell Electric Vehicle (FCEV) segment is also gaining traction in the global electric vehicle market. FCEVs use hydrogen fuel cells to generate electricity and power the electric motor. These vehicles produce only water and heat as byproducts, making them one of the most environmentally friendly options available. FCEVs have a longer range compared to battery electric vehicles and can be refueled in just a few minutes, making them ideal for long-distance travel. Major automakers such as Toyota, Hyundai, and Honda have already launched FCEV models in the market.
The Plug-in Hybrid Electric Vehicle (PHEV) segment is also witnessing significant growth due to its ability to run on both electricity and gasoline, providing flexibility and convenience to users. PHEVs offer longer driving range compared to BEVs, as they can switch to gasoline power once the battery runs out of charge. Major automakers such as BMW, Volvo, and Mitsubishi have launched PHEV models in the market.
The commercial vehicle segment is also gaining traction in the global electric vehicle market. Electric buses and trucks are becoming increasingly popular as they offer lower operating costs, reduced noise pollution, and lower emissions. Electric buses are being adopted by public transportation agencies around the world, with major cities such as London, Paris, and Los Angeles planning to transition their entire bus fleets to electric by 2030. Major automakers such as Tesla, Daimler, and Volvo have already launched electric trucks in the market.
The two & three wheelers segment is also witnessing significant growth, especially in developing countries such as India and China. Electric scooters and motorcycles offer an affordable and eco-friendly mode of transportation for daily commuting. The Indian government has launched several incentives and subsidies to promote the adoption of electric two-wheelers, resulting in a significant increase in sales in recent years.
The normal charger segment is still the dominant in the electric vehicle market, as it is the most widely available and affordable option for users. Normal chargers typically provide a charging speed of 6-7 kW, which is sufficient for overnight charging at home or at the workplace. However, with the increasing demand for fast charging, the normal charger segment is expected to witness slower growth in the future.
The fast charger segment is anticipated to grow at the fastest CAGR during the forecast period, due to the increasing demand for quick charging options. Fast chargers can provide charging speeds of up to 350 kW, allowing users to charge their vehicles in just a few minutes. Fast chargers are ideal for long-distance travel and are being installed at public charging stations and along highways. Major automakers such as Tesla, Porsche, and Audi are also launching electric vehicles that are compatible with fast chargers, further boosting the growth of this segment.
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In 2022, the Asia Pacific region accounted for more than 60% of the global electric vehicle sales, with China alone accounting for 41% of global EV sales. In addition, the report states that the Asia Pacific region is expected to continue its dominance in the global market during the forecast period, due to the favorable government policies and increasing demand for eco-friendly vehicles in the region.
China is the world's largest electric vehicle market, with more than 5.92 million electric vehicles were sold in 2022, according to the International Energy Agency (IEA). The Chinese government has implemented several policies and incentives to promote the adoption of electric vehicles, including subsidies for electric vehicle purchases, tax exemptions, and preferential treatment for electric vehicles in license plate lotteries. In addition, China has set a target for new energy vehicles to account for 50% of all new car sales by 2035, further boosting the growth of the electric vehicle market in the country.
Japan and South Korea are also emerging as major markets in the Asia Pacific region. The electric vehicle market in Japan is expected to grow at a CAGR of 9.6% during the forecast period, due to the government's goal of reducing carbon emissions and promoting the use of eco-friendly vehicles. In South Korea, the government has set a target for electric vehicles to account for 33% of all new car sales by 2030, and has implemented several policies and incentives to promote the adoption of electric vehicles, including tax exemptions and subsidies for electric vehicle purchases.
Furthermore, the Asia Pacific region is also witnessing significant investment in the electric vehicle market. The total investment in the electric vehicle market in Asia Pacific is expected to reach USD 200 billion by 2025, driven by the increasing demand for electric vehicles and the favorable government policies in the region.
Following are the different segments of the Global Electric Vehicle Market:
By Vehicle Type:
By Power Output:
|Market Size Value in 2022
|US$ 278.7 Bn
|Expected Revenue in 2050
|US$ 72,798 Bn
|Value (USD Bn)
|By Type, By Vehicle Type, By Charger, By Power Output, By Region
|Tesla Motors, BMW Group, Nissan Motor Corporation, Toyota Motor Corporation, Volkswagen AG, General Motors, Daimler AG, Energica Motor Company S.p.A., BYD Company Motors, Ford Motor Company, Zhejiang Geely Holding Group, Tata Motors Limited, Mahindra & Mahindra Limited, MG Motor India, Olectra Greentech Ltd., JBM Auto Limited, Other Prominent Players
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Electric vehicle runs on electricity alone and employs an electric motor instead of combustion engine.
Less air pollution, less noise pollution, higher efficiency, low maintenance cost, and low fuel and operating costs are some of the benefits associated with electric vehicles.
Gas-powered vehicles are declining as gas is non-renewable source of energy and doesn’t promote sustainable development.
The Global Electric Vehicle Market was valued at US$ 278.7 Bn in 2022.
The Global Electric Vehicle Market is estimated to expand at a CAGR of 21.99% during the forecast period 2023-2050.
Factors such as increasing demand for low-emission vehicles and government initiatives to accelerate EV deployment are driving the growth in the Global Electric Vehicle Market.
Lack of EV charging infrastructure poses a big challenge to the overall growth of the electric vehicle market.
Clean and renewable energy sources like solar and wind power are being increasingly integrated into the utility grids used to charge electric vehicles to reduce the use of hydrocarbon-based energy sources.
Global Electric Vehicle Market is segmented into five broad categories namely – by type, by vehicle type, by charger, by power output, and by region.
Battery electric vehicle holds the highest share in the Global Electric Vehicle Market in 2022.
100-250 kw power output segment has the fastest CAGR in the Global Electric Vehicle Market during the forecast period.
Asia Pacific dominates the Global Electric Vehicle Market in 2022.
The key players in the Global Electric Vehicle Market are Tesla Motors, BYD Company Motors, BMW Group, Nissan Motor Corporation, Volkswagen AG, Hyundai, KIA Motors, SAIC and BAIC among others.
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