The electric car market size is expected to advance at a CAGR of 23.8% during 2023–2030, to reach 45 million units by 2030.
Due to the growing concerns about the negative environmental impact of cars driven by gasoline and diesel, governments all over the world are encouraging the development of vehicles running on alternative fuels. EVs are, thus, becoming popular as a greener mode of transportation, with governments of numerous nations offering incentives to encourage their adoption, including subsidies, tax exemptions and refunds, and reduced parking/toll charges.
Apart from the automobiles themselves, leading EV markets, such as China, the U.S., and Germany, are investing a lot in R&D on EV charging infrastructure, for charging methods that are faster and more efficient. To fulfill the rising demand for EVs and reshape the industry, automakers are expected to follow governments in investing in EV and associated infrastructure R&D.
Range anxiety among customers is a major factor restricting the deployment of electric cars around the world. Most such automobiles today have a shorter range (less than 120 miles) compared to their ICE counterparts. With the advancement in the battery technology, the range of an electric car could be extended to a limit where it can compete with the conventional fuel cars. The increasing range will build customer trust and, in turn, increase their preference for an EV over a conventional car.
Hence, the sale of long-range models will drive the market in the future. Now, companies are focusing on introducing electric cars that can cover more than 200 miles on a single charge. Among the available models that offer such a long driving range are Chevrolet Bolt and Tesla Model 3. As a result, the demand for EV batteries that store more charge and self-discharge slowly is rising significantly.
Japan is set to witness significant growth in the market during the forecast period, with around 23% CAGR. The government introduced a new scheme in 2016 that grants higher subsidies to BEVs, with a maximum of $7,700.
Moreover, Japanese automaker Nissan might soon make known its EV strategies for India, which is being seen as a significant market for EVs.
Furthermore, the German market will continue to grow during the forecast period, majorly driven by the stringent emission norms. Additionally, electric cars in the country are exempted from the circulation tax for the first 10 years. To curb the emission levels in the country, the government is expected to continue to strongly support the purchase of electric cars and levy additional taxes on conventional cars during the forecast period.
Moreover, there has been considerable growth in the demand for electric vehicles in the U.K. in the last few years. Specifically, PHEVs have witnessed significant growth in sales due to the increasing launch of such models. Moreover, in 2017, to reduce the level of nitrogen dioxide in the country, the government has announced a ban on the sale of new conventional vehicles by 2040.
Furthermore, additional taxes, such as congestion tax and parking surcharges on conventional vehicles, have encouraged customers to opt for EVs. The government also plans to introduce a “toxin tax” on diesel vehicles, of up to $26.6 (GBP 20) per day, in the most-polluted cities in the country. Additionally, His Majesty’s Government provides an upfront subsidy of up to $4,500 for category 1 cars with a mileage of 70 miles or more and less than 50 g/km of CO2 emissions; $2,500 for category 2 cars with a mileage of 10–69 miles and less than 50 g/km of CO2 emissions; and $2,500 for PHEVs with a mileage of 20 miles and 50–75 g/km of CO2 emissions.
The most-significant electric car market players are Toyota Motor Corporation, Honda Motor Co. Ltd., BMW AG, Ford Motor Company, Volkswagen AG, General Motors Company, Hyundai Motor Company, Tesla Inc., BYD Company Limited, BAIC Motor Corporation Limited, and Renault Group.