Electric Vehicle Market worth $951.9 billion by 2030

The global electric vehicle market size was valued at?USD 388.1 billion in 2023 and is expected to reach USD 951.9 billion by 2030 at a CAGR of 13.7% during the forecast period 2023-2030. With advancements in technology, increasing environmental consciousness, and supportive government policies, EVs have gained significant traction as a viable and sustainable transportation option. As concerns over climate change and air pollution intensify, consumers and industries are increasingly turning to electric vehicles to reduce their carbon footprint and contribute to a greener future. This growing global momentum has propelled the electric vehicle market into a transformative phase, with innovations and investments driving the expansion of EV adoption across the world.

The study involved four major activities in estimating the current size of the electric vehicle market. Exhaustive secondary research was done to collect information on the market, the peer market, and the child markets. The next step was to validate these findings, assumptions, and sizing with the industry experts across value chains through primary research. The top-down and bottom-up approaches were employed to estimate the complete market size. Thereafter, market breakdown and data triangulation processes were used to estimate the market size of segments and subsegments.

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Electric Vehicle Market Growth Dynamics:

Driver: Reducing prices of EV batteries will increase demand for EVs by making them cost effective

Due to technological advancements and the production of EV batteries on a mass scale in large volumes, the cost of EV batteries has been decreasing during the past decade. This has led to a decrease in the cost of electric vehicles as EV batteries are one of the most expensive components of an electric vehicle. The prices of EV batteries fell significantly in the last decade, from USD 1,200/kWh in 2010 to USD 160/kWh in 2023 and is expected to decrease in the coming years. Meanwhile the price is as low as USD 100 per kWh in China. This is because of the reducing manufacturing costs of these batteries, reduced cathode material prices, higher production, etc. The prices of EV batteries are expected to fall to approximately USD 60 per kWh by 2030, which is expected to significantly reduce the prices of EVs, making them cheaper than conventional ICE vehicles. The price of EV batteries is expected to reach around USD 80 per kWh by 2025. This will bring the price of EVs to the same level as that of ICE vehicles in the market and start a big shift to EVs. From 2025, we can expect EVs to get cheaper than some ICE vehicles. The improvement in battery technology is the main reason for this fall in battery prices. Once Solid-State Batteries enter the electric vehicle market, we can expect another price fall (per kWh) by the end of this decade.

Opportunity: Rising demand for electric vehicles in the automotive and transportation sectors

Increase in the adoption and demand for electric vehicles has accentuated the need to develop charging infrastructure and the electric vehicle market. Leading markets for electric vehicles such as China, US, and Germany are investing significantly in electric vehicles and EV charging infrastructure along with research & development for faster and efficient charging methods, longer range EVs, and lower cost batteries. Significant investments by automakers are expected to cater to the rising demand for EVs. Countries across North America and Europe along with many Asian countries have adopted measures to reduce emissions during the coming decades and replace their vehicle fleets for lower emissions by varying numbers by 2035. This is expected to lead to a significantly high demand for electric vehicles. OEMs offer a wide range of vehicles, from small hatchbacks such as Leaf to high-end sedans such as Tesla model 3. The wide range of product offerings has attracted a high number of consumers, resulting in an increased market for electric vehicles. For instance, in January 2018, Ford announced plans to increase planned investments to USD 11 billion by end of 2022 for the development of EVs. The company introduced 40 EVs in 2022, of which 16 are expected to be fully electric and 24 are expected to be plug-in hybrid vehicles. The investment is higher than the previously announced target of USD 4.5 billion. Further, Stellantis also plans to come with 29 new EVs by 2030. Launched in September 2020, SAIC-GM-Wuling has a range of 106 miles on a single charge and was one of the highest selling EVs in 2021 and 2022.

Commercial vehicles to be the fastest growing market by volume during forecast period

The commercial vehicle segment includes LCVs and HCVs. HCVs combine two categories of vehicles ? heavy trucks and buses & coaches. The nature of these vehicles limits their production volumes and growth rates as they are used in specific applications such as logistics, construction, and mining industries. On the other hand, LCVs have come a long way from having bare-essential features to full-blown utility vehicles that can be used for passengers as well as commercial purposes. The majority of used LCVs and HCV’s include vans, mini-buses, pickups, trucks etc. Various companies such as Volvo Group, Daimler AG, Traton Group, BYD, Nikola Motor, Tesla, DAF Trucks, etc. already have EV models available or are currently under development. For instance, in May 2022, Stellantis and Toyota Motor partnered to develop a new large-size commercial van, including a battery electric version. This collaboration completes a full lineup of light commercial vehicles (LCV), consisting of compact, mid-size, and now a large-size LCV. Similarly, ZF's Commercial Vehicle Solutions (CVS) department unveiled 'AxTrax 2' and 'AxTrax 2 dual’ electric central drive system designed for various types of vehicles, ranging from light delivery vans to heavy-duty trucks and trailers. Increasing sales of electric buses, particularly in China, has contributed to the growth of the electric bus segment. In the near future, several countries are expected to replace their existing fuel-based bus fleets with electric buses. The increasing trend of the replacement of fossil fuel-based public transport fleets with electric buses is expected to drive the growth of electric commercial vehicle market during the forecast period. Additionally, the growth of e-commerce, logistics, and shared mobility are expected to drive the growth of electric commercial vehicles during the forecast period. Electric vans are expected to witness significant growth in Europe and Asia owing to their extensive use in businesses. In the coming years, EV LCVs are expected to be the fastest-growing market.

FWD to be the largest market during the forecast period

A front wheel drive vehicle has the transmission system attached to its front axle and wheels. It is significantly cheaper to design and produce compared to other wheel drives. The vehicle is therefore cheaper for consumers. Most front wheel drives provide better mileage compared to rear wheel drives as the weight of the drivetrain is lower than that of the rear wheel drive. They also provide better traction as the weight of the engine and transmission are over the front wheels. This makes the vehicle easier to operate in difficult weather conditions such as snow and heavy rain. However, the handling of these vehicles is harder compared to other drives, especially at faster speeds. In 2022, there were total sales of 1.8 million FWD EV cars in Asia Pacific followed by 0.3 million in Europe and 0.04 Million in North America. BYD Song Pro/Plus was the second best-selling passenger car worldwide which has a FWD type. Some popular FWD EVs include BYD? Qin Plus, BYD Han, Tesla? Model Y, BYD Donphin, Tesla? Model 3, BYD Yuan Plus EV, BYD? Tang, Tesla Model Y, Tesla? Model 3, GAC Aion Y, GAC Aion S, Changan Benni EV, Chery QQ Ice Cream, Hozon Neta V EV, Chery EQ 1 etc. These vehicles are better suited for places with high traffic, metro cities, etc. Most mini EVs including GW Black Cat, GW White Cat and GW Good Cat are sold under FWD specification. These 3 cars sold well in the past few years. FWD EVs were relatively high in use in the past due to manufacturers simply converting their existing ICE vehicle structure to EV by replacing parts during production. This worked well in the initial shift to EVs when manufacturers were not sure about plans to develop EVs fully.

“Middle East and Africa is expected to be the fastest growing market in the EV market”

The Middle East & Africa region has started giving importance to the electric vehicle market in the recent past. Governments of countries such as the UAE, Egypt, South Africa, and Cyprus have been working on growing their EV demand and EV charging stations across the region. These countries have provided incentives for EV buyers. Companies such as Tesla, Geely, Toyota, Volkswagen, and Nissan are leading this market. A large share of the EVs sold in this region are bought from China and Europe. Due to the low power prices in these regions, the cost of fuel for EVs reduces significantly, but the vehicle ownership costs make up for much of the difference. There is an advantage for the use of EVs in the Middle East: the urban areas are closer together and an 80% charge on a decent EV enables travel wherever needed within the states. The rising disposable incomes of people in this region along with the need for emission reductions has led to an increase in the demand for EVs in the last few years. The UAE for instance, plans to add over 42,000 EVs in Dubai by 2030. The country also plans to be among the world leaders in developing charging stations. It plans to provide free EV charging till 2025 to promote the EV market. The EV market in the Middle East & Africa is led by countries such as South Africa and the UAE while Egypt is a newly growing market. These countries are working towards developing demand and the adoption of EVs to reduce dependence on petrol in the coming years. These countries are also developing EV charging stations across their regions to cater to the upcoming demand for EVs.

Key Players

The EV market is dominated by established players such as BYD (China), Tesla (US), Volkswagen AG (Germany), SAIC Motors (China), and Stellantis (Netherlands), among others.

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