Electric Car Market by Technology (BEV, PHEV), by Segment (Economy, Low, Medium, Premium), by Geography (U.S., Canada, China, Japan, Netherlands, Norway, U.K., Germany, France) – Global Market Size, Share, Development, Growth, and Demand Forecast, 2013–2023

Electric Car Market Overview

The global electric car market sales are estimated to be 927,485 units in 2017, witnessing a CAGR of 33.6% during 2017-2023. The stringent emission norms all across the globe coupled with government subsidies and incentives for EVs is the major factor driving the market for electric cars. Apart from this, the declining automobiles’ battery cost and entry of several new electric vehicle (EV) variants is expected to benefit the electric car market during the forecast period.

GLOBAL ELECTRIC CAR MARKET, BY TECHNOLOGY, UNITS (2013-2023)

On the basis of technology, the electric car market is categorised into Battery Electric Vehicle (BEV) and Plug-In Hybrid Electric Vehicle (PHEV). BEVs held the larger share in the market mainly due to their dominance in China and higher subsidies on these vehicles over PHEVs. The share of BEVs is expected to further increase during the forecast period with increasing government support for BEVs in comparison with PHEVs as the former is eco-friendlier.

Among all the category, economy EVs are estimated to account for the largest share in the electric car market in 2017, followed by low-segment EVs. Lower prices of these EVs compared to medium- and premium-segment EVs, coupled with their preference in key markets such as China, drove its sales during the historical period.

China is expected to be the largest market for EVs during the forecast period, with a significant contribution to the electric car market. The sales of electric cars in the country is benefitted by the government subsidies and presence of well-established electric car and EV components manufacturers. China, the U.S., and the U.K. are expected to constitute close to 70% of the global EV sales volume in 2023. The rising environmental concern, the growing government support and subsidies for electric cars, and the increasing ownership costs of ICE cars are the major factors driving the demand for EVs.

Electric Car Market Dynamics

Drivers

The stringent emission norms and regulations all around the globe are the major drivers for the growth of electric car market. The emission of greenhouse gases (GHG) has increased significantly over the last decade. To limit the adverse effects of these gases, several actions have been taken all around the world. Several steps are being taken by the European Commission to achieve a cleaner environment with new ambitious environmental targets. For example, as per the Europe 2020 strategy, the European Union (EU) targets to reduce carbon dioxide (CO2) emissions by 20% by 2020, from the emission levels reported for the year 1990.

Many countries have proposed motor vehicle fuel efficiency and GHG emission policies to reduce vehicle emissions. The growing environmental concern around the world is leading to a gradual phase out of fossil fuels. Stringent emission norms would ultimately increase the price of conventional cars and encourage the customers and automobile companies to adopt electric cars. Many countries have increased the taxes on conventional fuel cars and, at the same time, are offering many financial and non-financial incentives on electric cars to promote the sale of low-emission vehicles, benefiting the electric car market.

Restraints

Lack of adequate charging infrastructure and value chain ecosystem is one of the major restraints for the growth of electric car market. Most countries do not have adequate public charging infrastructure. For instance, in France, for every 10,000 registered vehicles, there is only one charging point. Similarly, the average number of charging stations in Germany is around 1.9 per 10,000 electric vehicles.

Government subsidies will have a limited effect on the electric car adoption if there is not adequate charging infrastructure. As the average charging time of an electric car is high, shortage of public charging stations would lead to congestion, which would further lead to reduced public interest in electric cars. Apart from charging stations, support from other entities such as electricity utilities, financial institutions, service providers, and leasing companies is quite limited to back the growth of the electric car market.

Opportunity

Range anxiety in customers is a major factor thwarting the deployment of electric cars around the world. Most electric cars, today, have a low range (less than 120 miles) compared to their equivalent conventional fuel cars. The electric car market is increasingly moving toward long-range electric cars. Companies are focusing on introducing electric cars that can cover more than 200 miles on a single charge. In this regard, the Chevrolet Bolt and the Tesla Model 3 are the cars that offer a mileage of more than 200 miles to their drivers.

Further, with advancement in the battery technology, the range of an electric car can be extended to a limit where it can compete with all major conventional fuel cars. Increasing range will build customer trust and, in turn, will increase their preference for a EV over a conventional car. High-range electric cars offers a lucrative opportunity in the electric car market in the near future.

Electric Car Market Competitive Landscape

The electric car market is highly competitive due to presence of well-established players such as Tesla Inc., General Motors Company, and Nissan Motor Company Ltd. BYD Company Limited (BYD) stood as the industry leader because of its market dominance in China and popularity of its Tang and Qin plug-in electric cars. BYD was closely followed by the Renault–Nissan–Mitsubishi Alliance because of the growing popularity of the Nissan Leaf and the Mitsubishi Outlander. Tesla Inc. accounted for less than 15% of the global EV sales in 2017, However, with the launch of the Model 3, the share of Tesla Inc. in the electric car market is expected to increase significantly in coming years.

Other important players in the global electric car market included BAIC Motor Corporation Limited, Geely Automobile Holdings Limited, BMW Group, General Motors Company, Hyundai Motor Company.