Electric Vehicle (EV) Market Size, Share & Industry Analysis By Vehicle Type (Passenger Car and Commercial Vehicle), By Propulsion Type (Battery Electric Vehicle (BEV) and Hybrid Electric Vehicle (HEV)), By Drive Type (All Wheel Drive, Front Wheel Drive, and Rear Wheel Drive), By Range (Up to 150 Miles, 151-300 Miles, and Above 300 Miles), By Component (Battery Pack & High Voltage Component, Motor, Brake, Wheel & Suspension, Body & Chassis, and Low Voltage Electric Component) and Regional Forecast, 2024-2032

The global electric vehicle market size was valued at USD 500.48 billion in 2023 and is projected to grow from USD 671.47 billion in 2024 to USD 1,891.08 billion by 2032, exhibiting a CAGR of 13.8% during the forecast period (2024-2032). The Asia Pacific electric vehicle industry held a market share of 51.24% in 2023. Additionally, the U.S. electric vehicle market is projected to grow significantly, reaching an estimated value of USD 233.70 billion by 2032, driven by the favorable government subsidies and policies.

The environmental impact of conventional gasoline vehicles and the rise in fuel prices have paved the way for alternative fuel vehicles in the market. Buyers are gradually getting inclined to use battery-powered or hybrid automobiles, which is anticipated to drive the market. All models use one or more electric motors for propulsion. Electricity is the main energy source for EVs. There is no internal combustion engine installed in them. A sudden rise in the market’s CAGR can be attributed to the robust demand for alternative fuel vehicles.

Fossil fuel-based vehicles are one of the main causes of air pollution across the world. Therefore, it has forced many governing bodies to impose strict emission regulations on car manufacturers to curb vehicle emissions. In recent years, the demand for BEVs has increased considerably among consumers because these vehicles do not use traditional fuels, such as gasoline or diesel. The maintenance cost of EVs is also considerably less, which gives it an advantage over conventional fuel-based vehicles. The COVID-19 pandemic had a major impact on the market during 2020 and 2021. There was a sudden decline in the number of on-road vehicles. However, the sales of all types of EVs improved post-June 2020 as the lockdowns were lifted in most countries. The sales of BEVs and HEVs, in particular, were dominant during the post-pandemic period. The 2023-2025 period is predicted to be a booming period for EV sales as OEMs are planning to launch new EV models in the coming years. Furthermore, the robust support from governments for vehicle electrification and the decline in battery prices are expected to keep the market growth buoyant during the forecast period.

Electric Vehicle Industry Trends

Rising Investment in EVs to Boost Market Growth

Electric vehicle market growth is anticipated to be fueled by increasing investment in the field of electric mobility. Notable industry players including Daimler AG, Ford Motor Company, BYD, and Renault Group are spending more money on their plans to manufacture EVs. For instance, BYD said in September 2022 that it will begin EV production in Thailand in 2024 with a capacity of 150,000 electric vehicles per year. With assistance from the Thailand Board of Investment, BYD will also construct a facility for EVs with cutting-edge right-hand drive technology at WHA Rayong 36 Industrial Estate. Major corporations are spending extensively on the creation of EVs, including Daimler AG and Mercedes Benz. As a result, during the forecast duration, the market is anticipated to record notable growth.

Electric Vehicle Market Driving Factors

Favorable Government Subsidies and Policies to Augment Market Growth

Increasing demand for EVs will likely accelerate the market growth during the forecast period. Governments are offering attractive incentives and policies to encourage the sales of EVs. Some of these incentives include reduced selling prices, zero or low registration fees, and free charging infrastructure of EVs at multiple charging stations. Additionally, a number of governments around the world exclude import, purchase, and road taxes based on various subsidies. The production of EVs has increased due to these subsidies for the auto industry. Governments have also made significant infrastructure investments and developed helpful policies. For instance, over the next five years, the U.S. government intends to spend USD 287 billion on building new highways. In order to support the development of these vehicles, the government will also be putting up EV charging stations all around the United States. In the future years, it is anticipated that these activities will increase the market share of electric vehicles.

Strict Government Regulations on Vehicle Emissions to Boost Market Growth

To reduce the amount of greenhouse gas emissions in the atmosphere, governments of many countries have implemented strict vehicle emission regulations. For instance, in 2022, the European Union formed a regulation to reduce the CO2 emissions of light and medium commercial vehicles by 15% before 2025. The Petroleum Ministry of India mandated all automotive manufacturers to start producing BS-VI vehicles after 1 April 2020. The decision was aimed at reducing air pollution in the country. These stringent steps taken by several regulatory bodies to curb air pollution are expected to boost this industry’s growth in the coming years.

Restraining Factors

Higher Manufacturing and Battery Costs to Restrain Market Progress

EVs are superior to fossil fuel-based automobiles, but their cost is higher than that of the latter. These vehicles have not yet achieved economies of scale as they are not mass-produced. In addition, the absence of EV charging infrastructure has proven to be a negative factor, which has affected the market's growth. The manufacturers also need a lot of investment and assets, which may hamper the market's progress. However, owing to the production of EV batteries in large volumes and technological advancements, the cost of batteries is expected to decrease in the coming years.

Electric Vehicle Market Segmentation Analysis

By Vehicle Type

Passenger Vehicles to Hold Maximum Market Share Due to Increasing Demand for PEVs

Based on vehicle type, the market is segmented into passenger and commercial vehicles. The passenger vehicle segment holds the maximum market share due to increasing sales in China, India, Norway, and Germany. The adoption rate of EVs in Asia Pacific is high owing to the presence of EV manufacturers, original equipment manufacturers (OEMs), and other automakers in the region. These factors will help promote the growth of this segment during the forecast period. Further, the commercial vehicle segment is estimated to be the fastest growing in the coming years owing to the ever-increasing innovations in EV batteries to improve commercial vehicle load capacity.

By Propulsion Type

BEVs to Hold Top Market Position Due To Innovations from Key Operating Players

Based on the propulsion type segment, the market is segmented into Battery Electric Vehicles (BEVs) and Hybrid Electric Vehicles (HEVs). The BEV segment is expected to hold a notable market share and grow further due to the vast advantage of an electric vehicle. The growth is attributed to the rising production of EVs by OEMs. For Instance, In February 2024, BYD announced that the company is set to launch its third electric car, the BYD Seal, in India electric vehicle market on March 5. The electric sedan boasts a sleek design, advanced features, and a range of up to 700 km on a single charge. The HEV segment is the second dominant segment as this vehicle provides the dual option of working as a fuel-based and electric automobile, particularly in regions with inadequate charging infrastructure.

By Drive Type

Affordability of Front-wheel Drive Vehicles to Drive Component Segment Growth

Based on the drive type, the market is divided into all-wheel drive, front-wheel drive, and rear-wheel drive. The front-wheel drive segment accounted for the largest market share in 2023. This segment is also expected to record the fastest CAGR during the forecast period. This growth is attributed to the cost efficiency of the vehicle. Front-wheel drive systems are generally less expensive to manufacture and maintain as compared to rear-wheel drive or all-wheel drive systems. This makes front-wheel drive vehicles more affordable for customers, thus fueling the segment’s growth. The all-wheel drive segment accounted for a significant market share in 2022. The growth can be credited to the increasing popularity of all-wheel drive systems in the global automotive industry. The rear-wheel drive segment held a considerable market share in 2022. The growth is due to technological advancements in vehicle systems.

By Range

151-300 Segment Dominates the Market Due to Increasing Adoption of Passenger Vehicles

Based on range, the market is divided into Up to 150 miles, 151-300 miles, and above 300 miles. The 151-300-mile range segment holds the maximum market share as most passenger vehicles deliver this range. The rising sales of passenger EVs are expected to augment the segment’s growth. The up to 150 Miles segment holds the second largest due to the adoption of light commercial vehicles and electric vans. The adoption of electric vans is still in its nascent stage. Thus, the growing demand for EVs will drive segmental growth during 2024-2032.

By Component

Battery Pack & High Voltage Component Holds Maximum Market Share Due to Major Cost Contribution

Based on components, the market is divided into battery pack & high voltage components, motor, brake, wheel & suspension, body & chassis, and low voltage electrical components. The traction battery pack holds the maximum share due to major cost contributions and is a main supply for the vehicle functioning. Also, the price/value of these packs will decrease significantly in the upcoming years. Moreover, the major manufacturers are focused on developing traction batteries & high-voltage components that help to enhance performance and reduce cost, which will drive the market growth during the forecast period. Further, the motor holds the second largest share due to its adoption as an EV. Rising EV demand among major countries coupled with technological advances by OEMs will augment the market growth.

Regional Analysis of Electric Vehicle Market

The market is analyzed across North America, Asia Pacific, Europe, and the Rest of the World.

Asia Pacific is expected to grow significantly in this market due to the growing demand for passenger cars in developing nations. China accounts for the largest share in terms of passenger cars and other automobiles. North America is also expected to witness the highest growth in the market. The regional market’s growth can be attributed to rising initiatives by the Department of Energy (DoE) to build EV charging infrastructure throughout the U.S. to support the growing number of EVs in the region.

Furthermore, Europe is expected to hold a prominent market share. The steps taken by governments to reduce carbon emissions have been driving the market’s growth in Europe. The U.K., Germany, and France are important countries contributing to the region's growth. Besides, the rapid adoption of fuel-efficient vehicles will augur well for the European market. Countries in the Rest of the World region hold a smaller market share due to the lack of charging infrastructure and capital.

Competitive Landscape

Companies Focus on Acquisitions, Partnerships, and Developments to Gain Competitive Edge

The market is highly competitive and fragmented with the presence of key players, such as General Motors Company, Nissan Motors Co. Ltd., Tesla, Inc., Toyota Motor Corporation, BYD Company Ltd., Daimler AG, and Ford Motor Company, among others.

Tesla Inc. is a California-based EV manufacturing company, and its cars are well known for their autopilot mode and semi-autonomous features. The company is also known for its innovative product design, technological enhancements, and quality assurance. To fulfill the charging station gap in North America, Tesla constructed a network of charging stations across the U.S. and Canada. The company also built solar power generation plants to make green energy available for these charging stations.

Daimler AG is one of the world's leading manufacturers of commercial vehicles and high-end automobiles. The company has launched a range of passenger cars and commercial vehicles to support the growing EV demand. A few prominent EVs launched by the company include EQC, Smart EQ, GLC F-Cell, and Concept EQV. Moreover, Daimler AG also provides financing, insurance, fleet management, leasing, and innovative electric mobility services.

List of Key Companies Profiled:

• BMW Group (Germany)


• BYD Company Ltd. (China)


• Daimler AG (Germany)


• Ford Motor Company (U.S.)


• General Motor Company (U.S.)


• Nissan Motor Corporation (Japan)


• Tesla (U.S.)


• Toyota Motor Corporation (Japan)


• Volkswagen AG (Germany)


• Group Renault (France)

Recent Developments In The Electric Vehicle Industry

• In March 2023, Moscow signed a contract with KAMAZ for 1,000 electric buses. There are also plans to purchase another 200 electric buses from GAZ Group. Moscow currently runs 1,055 electric buses on 79 routes. Moscow plans to install nearly 200 ultra-fast charging stations for the electric buses, open a second electric bus park in the Mitino district northwest of Moscow, and launch 29 more electric bus routes.


• February 2023 – BYD has added two new dealer corporations to its network in the Europe region. Motor Distributors Ltd (MDL) is active in Ireland and will offer BYD models at select locations including Dublin and Cork. RSA is a dealer with whom BYD already works in Norway, and it will offer EVs of Chinese-make in Finland and Iceland. BYD initially launched three EV models in select European countries at the end of 2022. Two more series could follow in 2023.


• November 2022 - Feintool signed a contract with a renowned European (OEM). Under the contract, the company delivered stators and rotors to manufacture electric drives for electric vehicles. Innovative and patented adhesive packaging connections will also be used in the production


• October 2022 - Daimler Truck AG signed a strategic partnership agreement with Gehring Technologies GmbH to focus on building expertise in process development and prototype construction of commercial vehicle-specific electric motors. The partnership covers the prototypical construction of so-called "truck-e-fied" e-motors and further developing and testing innovative production processes.


• July 2022 – Ford announced plans to ramp up its global electric truck, van, and SUV production by up to 600,000 units annually by 2023. Demand for EVs (and the batteries that power them) is expected to grow dramatically over the next few years. Ford will use new, less expensive batteries in its Mustang Mach-E next year and in the F-150 Lightning by 2024.

REPORT COVERAGE

The market report provides a detailed analysis and focuses on key aspects, such as leading market players, vehicle type, and leading applications of the product. Besides, the report offers insights into the latest market trends and highlights key industry developments. In addition to the abovementioned factors, the report encompasses several factors that have contributed to the market’s growth in recent years.

Electric Vehicle Industry Report Scope and Segmentation