Electric Vehicle Market to Hit Growth 41.6% by 2028

The electric vehicle market is set to grow at a noteworthy CAGR of 41.6% during forecast period 2021 to 2028 and to reach valuation USD 1,212.2 billion by 2028.

The global Electric Vehicle market size was valued at US$ 2,373.6 thousand units in 2020, according to a new report by Vision Research Reports.


Why an electric vehicle?

An electric vehicle, as compared to a fuel vehicle, runs on electricity. Instead of an internal combustion engine, these vehicles are powered by an electric motor that requires a continuous supply of energy from batteries. Due to several technological advancements, electric vehicles have grown in popularity. Electric vehicles conquer conventional vehicles in terms of fuel economy, carbon emissions, and maintenance as well as the convenience of charging at home, comfortable ride and reduced engine noise. The battery, hybrid, and plug-in hybrid electric vehicles are the three types of electric vehicles. Furthermore, electric vehicles do not require engine maintenance, but they are significantly more expensive than their gasoline counterparts.

What are the growth factors of electric vehicle industry?

The factors such as increased demand for fuel-efficient, high-performance, and low-emission vehicles, as well as stringent government rules and regulations governing vehicle emissions, all contribute to the growth of the electric vehicle market.Furthermore, factors such aslow fuel economy and high manufacturing costs are expected to impede the growth of the electric vehicle market. However, factors such as technological advancements and proactive government initiatives will help the electric vehicle market growth during the forecast period.

Many countries imposed a two-month-long complete lockdown due to COVID-19 outbreak, affecting vehicle production. Manufacturing plants all over the world have been closed, and vehicle sales have suffered greatly. However, the majority of automobile manufacturers resumed vehicle production with limited capacity and necessary safety guidelines. The conditions are expected to be improved in the upcoming years as lockdown restrictions are being lifted in various countries. Thus, the production of electric vehicles has restarted, which will have a positive impact on the market in near future.

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Regional Snapshots


The Asia-Pacific held the largest share in the electric vehicle market. China, as the world's largest electric vehicle producer and user, has a monopoly in the region's electric vehicle market. The governments of China, South Korea, and India have taken steps such as providing subsidies to electric vehicle buyers, requiring all vehicle manufacturers to produce electric vehicles based on the number of vehicles produced, providing substantial support for the installation of electric vehicle charging stations in major cities, and enacting regulations against excessively polluting vehicles. This upsurge is attributed to the growing demand for electric cars in China, Japan, and India. In 2018, about 45.0% of the electric cars on road were in China as compared to 39.0% in 2017. Furthermore, various companies are focusing on manufacturing electric vehicles in China.

The North America and Europe electric vehicle markets are the fastest growing markets globally. North America held a substantial market share of over 15.0% in terms of revenue. The government initiatives for increasing consumer awareness about electric vehicles as well as surge in the research and development activities are creating lucrative opportunities for the growth of the market in these regions.

Market Dynamics

Drivers - Surge in demand for efficient vehicles


As gasoline is a fossil fuel, it is not a renewable source of energy and is expected to be depleted in the future. It is critical to develop and use alternative fuel sources to support sustainable development. This entails the use of electric vehicles, which do not require gasoline and are more cost effective than conventional vehicles. An electric vehicle converts more than half of the electrical energy from the grid to power at the wheels, whereas a gas-powered vehicle only converts about 17-21% of the energy stored in gasoline. Because of the recent increase in the price of petrol and diesel, there has been an increase in demand for fuel-efficient vehicles.

Stringent government rules and regulations

An internal combustion engine generates power in a traditional fuel-powered vehicle. In a general case, the combustion system completely burns the fuel and produces just carbon dioxide and water as waste; nevertheless, the combustion system produces a variety of toxic gases, resulting pollution. An electric vehicle, on the other hand, employs an electric motor that is driven by a constant source of electricity and hence does not emit any pollutants. The government of some countries such as U.S., China, France, and Germany has enacted strict laws and regulations regarding vehicle emissions, which is paving way for the growth of electric vehicle demand in the market.

Restraints - High cost of production

Electric vehicles are more preferable than regular vehicles, although they are more expensive. The lack of charging infrastructure linked with the development of electric vehicles has proven to be a hindrance to the market's expansion. Similarly, manufacturers require a significant amount of capital and assets, which could stifle the market growth. The cost of batteries is predicted to fall in the next years as a result of increased production of electric vehicle batteries in huge quantities and developments in technology.As a result, electric vehicle manufacturing necessitates a significant investment, which has a negative impact on market growth.

Opportunities - Technological advancements

The automobile manufacturers are concentrating on the development of improved electric vehicle systems that are predicted to emit fewer pollutants at cheaper costs. Companies have also begun developing reduced engines for use in vehicles, as smaller engines aid in meeting the pollution standards. This is because they emit fewer pollutants than heavier and larger engines. These engine's compactness and cost-effectiveness add even another dimension to their utility. As a result, the future development of advanced Gasoline Direct Injection (GDI) systems opens numerous prospects for key players in the market.

Challenges - Lack of infrastructure for charging electric vehicles

The lack of infrastructure to support the growth of electric vehicles has proven to be a barrier to the growth of electric vehicle market. Many countries throughout the world have few electric vehicle charging outlets. As a result, public electric vehicle charging becomes less accessible, lowering demand for electric vehicles in the market. Despite the fact that many governments are attempting to establish electric vehicle charging infrastructure, most countries have not been able to develop an adequate number of charging stations. Once a well-developed electric vehicle charging network persists around the world, demand for electric vehicles will rise in the market.

Report Highlights

The product segment is bifurcated into Battery Electric Vehicles (BEV) and Plug-in Hybrid Electric Vehicles (PHEV). In 2019, the PHEV segment held the market share exceeding 30.0% in terms of revenue. Furthermore, the BEV segment is expected to witness a CAGR of over 25.0% in terms of revenue during the forecast timeframe. This is attributed to the increasing environmental awareness and benefits of BEV among people.

The PHEV segment is projected to register the highest CAGR of over 45.0% in terms of revenue during the forecast timeframe. This upsurge is due to the initiatives taken by the government of developing countries such as India and China to promote the usage of electric vehicles. Furthermore, companies such as Volkswagen Group are focusing on increasing its plug-in electric car sales. In January 2020, the company announced an increase of about 60.0% in its plug-in electric car sales as compared to 2018.

Key Players

The companies operating in the market are BYD Company Ltd. Daimler AG Ford Motor Company General Motors Company Groupe Renault Mitsubishi Motors Corporation Nissan Motor Company Tesla, Inc. Toyota Motor Corporation and Volkswagen Group.

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