Once mocked as toys, electric vehicles have become an inevitable step for the global auto market. The fact that electric vehicle sales are on pace to reach over 1.6 million this year, up from just a few hundred thousand in 2014 is enough to portray the future of this exuberant industry. The government support across various countries in the form of grants, subsidies, and tax rebates is proving to be a major driving factor for the electric vehicle market. Improving charging infrastructure, increasing vehicle range, and reducing the cost of batteries have fuelled the demand for EVs across the globe. The major restraints considered in the study include the poor charging infrastructure, limited vehicle range, and the short lifespan of the EV battery, which restricts the sales of electric vehicles.
The Lithium-ion battery prices have tumbled by 80% in this decade. The prices are supposed to fall in coming years too. Policy support is another boosting factor. Governments around the world have offered generous EV purchase incentives to help get the market rolling. At the same time, tightening fuel economy standards will require significant electrification of the vehicle fleet, and China’s ‘New Energy Vehicle’ quota is forcing automakers into EVs faster than most of them would like. Increasing concern of environmental pollution, government level initiatives, and huge investments by automakers are propelling the growth of the electric vehicles market.
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The FCEV (Fuel Cell Electric Vehicle) segment (zero-emission vehicles) is set to register the highest growth rate in the electric vehicle market followed by BEVs (Battery Electric Vehicle) and PHEVs (plug-in hybrid electric vehicle), because of the availability of better subsidies and support from governments. Fuel cell vehicles have better fuel economy and can travel around 300–400 miles with a full fuel tank with refueling time of around 3 to 5 minutes. It makes FCEVs an ideal option for transportation on a definite route.
Its Zero-emission nature encourages many governments to adapt BEVs. Various governments around the world support the sales of BEVs through their higher subsidy and tax rebate structures in comparison to HEVs and PHEVs. Increasing vehicle range and improving charging infrastructure have fuelled the demand for BEVs. Tesla Model S and Nissan Leaf were the most successful and highest selling BEV models in 2016. Decreasing battery prices, increasing environmental awareness among consumers, and decreasing charging time will lead the growth of BEV sales.
An increasing number of charging stations in countries such as China, US, and the UK would positively affect the demand for PHEVs. The demand for PHEVs would also rise due to various tax benefits and incentives provided by the governments of different countries. For instance, the Japanese government is providing subsidies up to USD 8,500 for PHEVs. China is leading the market for PHEVs in the Asia Pacific owing to the availability of advanced technology and increased government incentives on purchase of PHEVs.
The passenger car is the largest segment in the global electric vehicle market. The growth can be attributed to the growing demand for fuel-efficient vehicles, increasing environmental awareness among consumers, and competitive pricing in comparison to the ICE passenger cars. The increasing support from governments in China, Japan France, Norway, and the US, and the OEM’s efforts to improve the existing EV models would drive the sales of electric vehicle passenger cars during the forecast period. Major OEMs have also announced the launch of the EV variants of their most successful IC (internal combustion) engine models.
Asia Pacific is the largest market for automotive Electric Vehicles. China is the largest market because of the government support and the availability of strong charging infrastructure. In 2017, 21% of all global EV sales were in just 6 Chinese cities, all of which have significant restrictions on buying and using new internal combustion engine vehicles. The alarming pollution levels in these countries have forced their governments to announce various kinds of financial and nonfinancial benefits to promote the sales of EVs. In Europe, the spectre of potential bans is pushing both buyers and automakers away from diesel. Urban air quality concerns have quickly become central pillars of municipal policy and EVs sales are benefiting.
Looking at the current pace, it can be confidently concluded that by 2040 around 55% of all new car sales and 33% of the global fleet will be electric. By the time, the cost ineffectiveness will be considerably rectified with falling battery prices and improving charging infrastructure. The depleting fossil fuel resources and the growing awareness regarding greenhouse gas emissions are compelling governments to formulate the regulations in line with the green energy. Electrified busses and cars will displace more than 7 million barrels of transportation fuel per day in 2040. China is and will be the largest electric vehicle market for future years. China will account around 50% of global electric vehicle market in 2025. Europe and US are next in line with around 14% and 11% current market share respectively.
The global electric vehicle market is dominated by major players such as Tesla (US), BYD (China), BMW (Germany), Nissan Motor Corporation (Japan), Volkswagen (Germany). Electric vehicle components manufacturers such as LG Chem. (South Korea), Panasonic Corporation (Japan), Delphi Automotive (UK), Samsung SDI (South Korea), Automotive Energy Supply Corporation (Japan), and EV infrastructure providers such as Car Charging Group (US) and Charge Point, Inc. (US) have the dominant influence on the market
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