The growth of self-driving electric vehicle technology is likely to bring growth opportunities for the market in the forthcoming time period.
According to forecasts Precedence Research, the global electric vehicle industry will exceed a value of about US$ 1103.17 billion by 2030. The current value of the market was valued at US$ 170 billion in 2021. The CAGR in the years 2022-2030 will be up to 23.1 percent.
Electric vehicle is an electrically powered vehicle that uses traction motor or electric motor for propulsion. They have shown attractive growth over the past decade and their adoption rate is still prospering in double digit growth. On the basis of product they are categorized into Battery Electric Vehicle (BEV) and Plug-in Hybrid Electric Vehicle (PHEV). Presently, BEV dominated the sale of electric vehicles across globe. However, PHEVs are anticipated to flourish significantly over the coming years. The growth of PHEV is attributed to its benefits over BEV and driver-friendly features. Some of the attractive features of PHEV are extended driving range due to presence of liquid fuel tank & internal combustion engine, low battery cost and size, and charging flexibility at any gas station.
Growth Factors Of Electric Vehicles
Even though the oil prices have declined prominently, electric vehicles adoption is increasing day by day. Rising environmental concern for pollution and CO2 emission, favorable government policies for adoption of electric vehicles, and significant investment by EV manufacturers are some of the major factors driving the global electric vehicle market. Some of the manufacturers are also promoting workplace and residential charging stations to over the charging constraints. For instance, in December 2017, Electrify America LLC announced to install more than 2,800 residential and workplace charging stations by June 2019 in 17 different metropolitan cities of U.S.
However, lack of global standard for the charging infrastructure is one of the major reasons that hinder the market growth. Nonetheless, technological advancement in electric vehicle charging stations powered by renewable energy open up new opportunities in the market growth.
Key Players & Strategies
The global electric vehicle industry is consolidated and highly competitive owing to the presence of large number of players. Market players are significantly involved in merger, acquisition, partnership, regional expansion and other marketing strategies to retain their position in the global market. For instance, in March 2020, Nikola Corporation, a zero-emission truck startup announced its merger with VectoIQ, dedicated for the development of mobility as a service and autonomous fleet.
Some of the key players in the market are BYD Company Ltd., Ford Motor Company, Daimler AG, General Motors Company, Mitsubishi Motor Corporation, Groupe Renault, Nissan Motor Company, Toyota Motor Corporation, Tesla Inc., and Volkswagen Group, among others.
Key Trends Of the Electric Vehicles
One of the factors supporting the growth of global electric vehicle market is rising prices of fuel and diesel. An electric vehicle is adopted on a large scale due to high price of fuels. This type of vehicles is fuel efficient and does not emit any kind of toxic gases. This factor is driving the demand for electric vehicles in the market. In addition, government of emerging and established nations is taking initiatives and actions for the development of global electric vehicle market. The expansion of global electric vehicle market is also being driven by reduction in prices of electric vehicle batteries. The stringent government regulations against carbon emissions and greenhouse gases emissions are boosting the growth of global electric vehicle market.
Electric vehicle producers and regulators are increasing their focus and efforts. Electric vehicle technologies such as fully electric and plug in hybrid electric vehicles are appealing solutions for achieving environmental and socioeconomic goals. Electric vehicles can reduce dependency on oil-based fuels and if powered by low carbon energy can achieve considerable reductions in greenhouse gas emissions. Electric vehicles are also ideally adapted to helping alleviate air pollution concerns due to their zero emissions. Furthermore, electric vehicles are pushing advancements in battery technology, which is a critical problem for productivity in the clean energy transition.
Main Challenges Of The Electric Vehicles
One of the major challenges for the growth of global electric vehicle market is the high cost of manufacturing. As compared to traditional type of vehicles, electric vehicles are quite expensive. This is due to advanced features embedded in vehicles as well as technological developments. In addition, the manufacturers need high capital investments for manufacturing electric vehicles. This factor is hindering the growth of global electric vehicle market. Moreover, electric vehicles require charging station and infrastructure. Not only have the countries around the world had electric vehicle charging station. This is another challenge that is restricting the expansion of global electric vehicle market. Furthermore, in some of the developing nations, government is not taking proper steps for the promotion of electric vehicles. In addition, proper guidelines are also not imposed for adoption of electric vehicles. This factor is hampering the electric vehicle market growth.
Opportunities Of the Electric Vehicles
Declining costs of electric vehicle batteries
Due to technological breakthroughs and the mass production of electric vehicle batteries in huge quantities, the cost of electric vehicle batteries has decreased over the last decade. Because electric vehicle batteries are one of the most expensive components of the car, this has resulted in a reduction in the cost of electric vehicles.
Asia Pacific seeks the most lucrative growth over the forecast period owing to rising adoption of electric and zero-emission vehicles in the region. The government of various Asian countries has issued stringent regulations for the CO2 and greenhouse gas (GHG) emission. This has forced the auto-manufacturers to move their production towards more efficient and environment-friendly vehicles. In June 2019, Japan had issued a new CO2 emission standard for 2030, according to this car manufacturing must focus in reducing the CO2 emission by 32% by 2030 in comparison to 2016. Other countries are also taking significant initiative for controlling the vehicle emission. For instance, in 2020, China made huge investment in electric car infrastructure to promote e-mobility. Volkswagen AG, one of the leading electric vehicle manufacturers has signed a joint venture with China and planned to invest USD 11.30 Bn for industrialization of e-mobility in China.
Europe and North America are the prominent electric vehicles market with around 45% combined revenue share globally. Europe after Asia Pacific is the second most lucrative EV market owing to various governments plan for zero emission on-road fleet by 2030. In June 2020, the government of Germany announced to double the subsidies on electric vehicles. The initiative has taken to promote electric vehicle sales and restrict diesel vehicle sales. Similarly, in July 2016, the U.S. government planned to accelerate electric vehicle adoption by announcing some private sector and federal actions such as launch of FAST act process and loan guarantees up to USD 4.5 Bn for the deployment of electric vehicle charging station.
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