Favourable Government Policies and Subsidies to Drive the Demand for Electric Vehicles
Global electric vehicle market is driven by various initiatives taken by governments of many nations to promote the production and sales of electric vehicles (EVs). Governments all over the world are increasing their investments in electric mobility by offering attractive incentives and policies to promote the sales of electric vehicles. For instance, in 2019, the German government and vehicle manufacturers agreed to increase monetary incentives for battery-powered vehicles under the "Environment Bonus" scheme. The total incentive will be USD 6,680 per vehicle, with the vehicle industry covering half of the cost, and the government plans to implement these incentives by 2025. Similarly, the Indian government announced its plans in 2019 to spend USD 1.4 billion to subsidize hybrid and electric vehicle sales by 2022. Any vehicles costing less than USD 21,177 are applicable for these incentives, resulting in increasing demand for electric vehicles over the forecast period.
Increasing government regulations on the emission of greenhouse gases in the atmosphere caused by Internal Combustion Engine (ICE) vehicles have led to the expansion in demand for electric vehicles. For instance, the European Union has set a goal of achieving net-zero greenhouse gas emissions by 2050. Electric vehicles generate lower emissions as compared to traditional vehicles. Governments all over the world too are increasing awareness and promoting the adoption of electric vehicles to reduce oil usage, pollution, and emissions.
The worldwide electric vehicle sales grew by 43% from 2019 and the global electric vehicle market share rose to a new record of 4.6% in 2020 as per the International Energy Agency. Countries such as the United States, China, and many European countries have seen considerable increases in the sale of electric vehicles in recent years, which will contribute to market growth. The market is expected to be driven by increasing electric vehicle usage in the commercial and government sectors. For instance, the UK government approved 200 electric buses in 2020, with the goal of making all buses fully electric by 2025, saving almost 7,400 tonnes of CO2.
Passenger Car Segment to lead the Electric Vehicle Market
The passenger car is expected to be the fastest-growing electric vehicle market segment over the forecast period. The passenger car segment led the market with a market share of more than 90% in 2020 owing to increased demand and sales for passenger electric cars in the Asia Pacific followed by Europe and North America. China, Japan, and South Korea are the countries in Asia that are leading the passenger electric vehicle market. This is attributable to the governments' strong support for passenger electric vehicles in these countries. These countries have implemented strict emission regulations and have a variety of subsidies, grants, and incentives to encourage people to shift to electric vehicles. Europe's EV sales surpassed China's in 2020 because of these efforts, whereas China sold more mini-EVs in 2021.
Growing Popularity of EVs to Drive Growth of Asia Pacific Electric Vehicle Market
The Asia Pacific is the largest user of electric vehicles and is expected to grow at the fastest rate throughout the forecast period. The increasing popularity of electric vehicles is prompting the region's automobile manufacturers to launch electric vehicles. As the market evolves and consumer preferences shift from conventional vehicles to electric vehicles, more conventional vehicle manufacturers are likely to launch electric vehicles in the market, enhancing market growth during the forecast period.
Countries like China, Japan, and South Korea lead the Asia Pacific electric vehicle market. China, being the world's top electric vehicle manufacturer and user, has a hold on the region's electric vehicle market. In 2018, China accounted for 45% of all electric vehicle sales on the road globally, up from 39% in 2017. Moreover, many companies in China are focusing on the production of electric vehicles. Volkswagen Group announced its plan to produce 22 million electric vehicles by 2026, half of which are to be manufactured in China. Tesla, Inc., on the other hand, expects to manufacture around 150 thousand 3s Model automobiles in Shanghai, China. In addition, the Indian government announced tax benefits for the purchase of electric vehicles in 2019. The government intends to deduct interest paid or loans taken for the purchase of an electric vehicle in income tax.
The rapid growth of the electric vehicle market in North America can be ascribed to the growing initiatives by the Department of Energy (DOE) to build charging infrastructures throughout the U.S. to support the increasing number of electric vehicles in the region. For instance, Policymakers, auto manufacturers, and charging network companies in North America have formed a non-profit named Veloz to promote electric vehicles. The organization’s objective is to encourage electric vehicle market innovation, investment, marketing, and expansion. Similarly, Electrify America, a California-based electric vehicle manufacturer, has announced a USD 2 billion investment in zero-emission vehicle (ZEV) infrastructure across the United States over the next ten years, from 2017 to 2027, with USD 800 million invested in California.
Global Electric Vehicle Market: Competitive Landscape
In December 2021, BYD introduced its new second-generation e6 EV for the Indian market. This MPV has a battery pack with a capacity of 71.7 kWh and a range of around 250+ miles on a single charge. The deliveries for this model have already started by February 2022. On the other hand, in October 2020, Hino and BYD signed an agreement to set up a new company for commercial BEVs development.
Few of the players in the Electric Vehicle market include SAIC Motors (China), Stellantis (Netherlands), Tesla (US), BYD (China), and Volkswagen AG (Germany).
Regional Classification of the Global Electric Vehicle Market is Described Below:
Middle East and Africa
*Regions and countries are subject to change based on data availability
Key Elements Included In The Study: Global Electric Vehicle Market
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