Electric Vehicle Market is Representing 23.1% Growth Through 2032: Rising Environmental Concerns are Boosting EV Sales

Seoul, April 19, 2023 (GLOBE NEWSWIRE) -- Precedence Research predicts, the global electric vehicle market size worth at USD 205.58 billion in 2022 and is estimated to increase around USD 1,716.83 billion by 2032. Instead of running on any fuel, electric vehicles are operated on electricity. Electric vehicles depend on electric motors, where energy is stored in rechargeable batteries. They are poised to transform mobility in upcoming years across the globe. Rising environmental concerns and fluctuating oil prices have increased the demand for electric vehicles worldwide. The rising number of public transports shifting to electric vehicles has given a boon to the global electric vehicles market. Considering the increased demand for electric vehicles, the market is expected to boom during the forecast period. Rising government initiatives for developing and selling electric vehicles provide lucrative opportunities for the market's growth.

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According to the Global EV Outlook 2022, 2 million electric vehicles were sold globally in just the first quarter of 2022. Electric vehicles offer multiple benefits, including reduced noise and air pollution, no carbon emission, more efficient motors, lower maintenance, and enhanced performance.

The passenger electric vehicles segment dominates the global market due to the rising government's initiative to develop and sell electric vehicles. Asia Pacific shows the highest sales of electric passenger vehicles. At the same time, North America and Europe are the regions with growing demand for electric passenger vehicles. Major automotive companies such as Hyundai Motor, Kia Corporation, Tesla, BMW, Ford Motor and many others have participated in the electric vehicle market by expanding their business portfolio. The involvement of reliable automotive companies in the market has helped increase consumer acceptance of electric vehicles.

Key Takeaway

• Asia Pacific has accounted revenue share of 42% in 2022.
• By propulsion type, the BEV segment has accounted revenue share of 67% in 2022.
• By vehicle type, the passenger car segment has captured 62% of revenue share in 2022.
• By vehicle class, the mid-priced segment has captured largest revenue share of 74% in 2022.
• The hybrid electric vehicle segment was valued at USD 77,581.7 million in 2021.
• The passenger car market was accounted for USD 127,394 million in 2021. 
• The commercial vehicle EV market was accounted for USD 47,351.9 million in 2021.
• The luxury EV market was valued at USD 104,380 million in 2021.

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Scope of this report

Report Coverage	Details
Market Size in 2032	USD 1,716.83 billion
CAGR	23.1%
Asia Pacific Revenue Share	42% in 2022
BEV segment Revenue Share	67% in 2022
Key Players	BYD Company Ltd., Daimler AG, General Motors Company, Ford Motor Company, Mitsubishi Motor Corporation and Groupe Renault

Regional snapshot:

Asia Pacific is the leading the biggest marketplace for electric vehicles. With a rising population and developing automotive industries in countries such as China, India, Japan and South Korea, the market holds the potential to maintain growth during the forecast period. [H1] China is the most significant contributor to the electric vehicle market growth in the Asia Pacific. The country also leads as the biggest distributor of raw materials required in the manufacturing of electric vehicles.

Attractive policies associated with the electric vehicles offered by the Indian government are helping the market to grow in the country. Rising environmental concerns, fluctuating fuel prices, the developing automotive industry, new start-ups in the EV market, and scope for development due to the presence of major manufacturing companies are primary factors to boost the growth of electric vehicles in India. The government of India has launched FAME (Faster Adoption & Manufacturing of Electric Vehicles) scheme to provide an attractive incentive in the form of subsidies. Moreover, the government has decided to turn all government vehicles electric before 2030, and this initiative will boost the scope of electric vehicles in India. Technological advancements in Japan, along with the rapid adoption of electric public transportation, have fueled the market in Japan.

The presence of major key players in Asia Pacific is growing the market exponentially. Companies such as Electrotherm, Hero Electric Vehicles Pvt Ltd., Hyundai Motor India Limited, JBM Auto Limited, Mahindra Electric Mobility Limited, Ampere Vehicles, Benling India Energy & Private Limited, BYD Company Limited, Hyundai Motor Company, Kia Corporation and Toyota Motor Corporation are headquartered in Asia Pacific.

Rising investments by major companies in North America are boosting the growth of the electric vehicle market. The pace of investment in electric vehicles by companies such as Ford Motor Company, Toyota, General Motors and Panasonic tripled in 2022. Since President Biden took office, $85 billion has been invested in the manufacturing of electric vehicles. The US car market declined 23% in 2020, though electric car registrations fell less than the overall market. In 2020, 295 000 new electric cars were registered, of which about 78% were BEVs, down from 327 000 in 2019. Their sales share nudged up to 2%. Federal incentives decreased in 2020 due to the federal tax credits for Tesla and General Motors, which account for the majority of electric car registrations, reaching their limit.

Companies such as Chevrolet Motor Company, Ford Motor Company, Lucid Group Inc., Rivain and Tesla Inc. are continuously involved in developing advanced electric cars, which has boosted the market's growth in North America. Moreover, the price reduction of electric cars is projected to act as a boon for the market's growth in the region. For instance, in January 2023, Tesla, the biggest electric car manufacturer in the US, reduced its electric car prices worldwide. This step is anticipated to result in changed consumer behaviour with increased worldwide sales.

Rising awareness towards sustainable development has boosted the European demand for electric vehicles. However, the higher prices of electric cars in Europe are hampering the growth of the overall market. Germany, Italy, Netherlands and France have shown rapid growth in the sales of electric vehicles. In recent years, the Netherlands has increased the number of EV charging stations in the country to make the experience seamless. Moreover, the European Union has already imposed strict regulations regarding carbon emissions from automobiles, and this has scaled up the demand for electric vehicles in the region. The widespread automotive sector in European countries, with the presence of globally leading companies such as BMW AG, Daimler AG, Energica Motor Company and Volkswagen AG, contributes to the market's growth.

Overall Europe's car market contracted 22% in 2020. Yet, new electric car registrations more than doubled to 1.4 million representing a sales share of 10%. In the large markets, Germany registered 395 000 new electric cars and France registered 185 000. The United Kingdom more than doubled registrations to reach 176 000. Electric cars in Norway reached a record high sales share of 75%, up about one-third from 2019. Sales shares of electric cars exceeded 50% in Iceland, 30% in Sweden and reached 25% in the Netherlands. In European countries, BEV registrations accounted for 54% of electric car registrations in 2020, continuing to exceed those of plug-in hybrid electric vehicles (PHEVs). However, the BEV registration level doubled from the previous year while the PHEV level thripled. The share of BEVs was particularly high in the Netherlands (82% of all electric car registrations), Norway (73%), United Kingdom (62%) and France (60%).

Market dynamics:

Driver:

Increased demand for fuel-effective vehicles

Due to rising prices of petrol and diesel and decreased fossil fuel reserves, the demand for fuel-efficient vehicles has increased in recent years. Fuel efficiency is considered to reduce the environmental impact of vehicles, and electric vehicles convert electricity directly into a movement that emits zero carbon and offers high motor performance. While the world is looking for a cost-saving and eco-friendly transportation option with fuel efficiency, electric vehicles are considered a more efficient option for mobility. Thus, the rising demand for fuel-effective vehicles is seen as a driver for the growth of the global electric vehicle market.

Restraint:

Lack of EV charging stations

Electric vehicle charging stations or points are necessary for the market's growth. The unavailability of charging stations limits the adoption of electric vehicles. Electric vehicles require timely charging to run efficiently. The electric vehicle market is still growing in many countries where the use of charging stations is considered low. Along with this, the cost of setting up a charging station is high. These factors have resulted in the lack of EV charging stations, especially in underdeveloped or developing countries. Thus, the compatibility issue with the EV charging station network is considered a major restraining factor for the market. However, many countries are installing electric vehicle charging stations to make the experience seamless. Moreover, cost reduction of charging stations, the government's initiatives to increase the number of such stations and rising investment by major automotive companies in setting up EV charging stations will combat this restraint. For instance, in January 2023, Tata Power signed an agreement with GAIL Gas Limited to set up DC fast charging points for electric vehicles in Bengaluru, India.

Opportunity:

Deployment of automated driving assistance system (ADAS) in electric vehicles

Automated driving assistance system in electric vehicles provides surveillance cameras and sensors with automated technology to detect nearby obstacles. This system offers extra protection to the vehicle by preventing potential damage. Advanced driver assistance systems (ADAS) enables safer driving and reduces the chances of human errors. Deploying automated driving assistance systems in electric vehicles will offer a seamless driving experience for consumers. Rising demand for smart, automated vehicle systems will surge the need for ADAS in electric vehicles in the upcoming years. A smart braking system, location navigation, steering and lighting are a few advanced features offered by ADAS. Increased awareness of safety during driving is another factor that will propel the demand for ADAS in electric vehicles. Considering the rapidly evolving technological world, deploying ADAS in upcoming electric vehicles will offer lucrative opportunities for manufacturers, designers and companies involved in the global market.

Challenge:

Lack of public acceptance of electric vehicles

The need for more public acceptance of electric vehicles has created an obstacle for the market. Factors such as lack of proper infrastructure, higher upfront cost, extended charging time, low suitability for intra-station travel, higher insurance costs and lack of recognized players involved in the market adversely affect public acceptance of electric vehicles. Moreover, a lack of awareness about the benefits of electric vehicles in underdeveloped countries has impacted the market's growth. Additionally, increasing metro train facilities in several countries are prone to create a challenge for the sales of electric vehicles.

Related Reports

Recent developments in the electric vehicle market:

• In January 2023, a globally leading automotive company, Tata Motors, unveiled an electric version of the Tata Harrier SUV at Auto Expo 2023. The electric Tata Harrier SUV is set to launch in India by 2024. The car has a 360-degree camera and an advanced driver assistance system.
• In January 2023, the Automotive Research Association of India (ARAI) launched a 100kW DC charger for electric vehicles. The association has planned to launch advanced driver assistance system verification and validation test facility in Pune, India.
• In January 2023, Audi (Bangladesh) became the first brand to launch a battery electric vehicle (BEV) in Bangladesh. Audi launched an all-electric e-Tron 50 SUV at the Dhaka showroom. The vehicle is designed for everyday use with a powerful and efficient electric motor.

Market Segmentation

By Propulsion Type

• Hybrid Vehicles
  • Pure Hybrid Vehicles
  • Plug-in Hybrid Vehicles
• Battery Electric Vehicles
• Fuel Cell Electric Vehicles

By Components

• Battery Cells & Packs
• On-Board Charge
• Motor
• Reducer
• Fuel Stack
• Power Control Unit
• Battery Management System
• Fuel Processor
• Power Conditioner
• Air Compressor
• Humidifier

By Vehicle Type

• Passenger Cars
• Commercial Vehicles
• Two-Wheelers
• E-Scooters & Bikes
• Light Commercial Vehicles
• Others

By Vehicle Class

By Top Speed

• Less Than 100 MPH
• 100 to 125 MPH
• More Than 125 MPH

By Vehicle Drive

• Front-Wheel Drive
• Rear Wheel Drive
• All Wheel Drive

By EV Charging Point Type

• Normal Charging
• Super Charging

By V2G

By Geography

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)

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