An electric vehicle (EV) uses one or more electric motors for propulsion. The advancements in battery technology have boosted the driving range of electric vehicles. At the global level, the sales of electric vehicles are increasing continuously, and are set to soar higher in the future.
China and the US are considered as the major markets for electric vehicles. The rising demand for electric vehicles in China is expected to help OEMs strengthen their distribution network and footprints in the global market. The country is now all set to explore market opportunities for electric vehicles in the US. In the recent news on 17th Jan 2019, Kandi Technologies Group, Inc. has announced its plans to strengthen its footprint in the US market by providing passenger electric vehicles. Kandi, which started making electric vehicles in 2013, and is hoping to ship two of its models to the US later this year. This is expected to help China become the primary global supplier for OEMs by building a business case to compete with foreign players.
The increasing environmental pollution and the threat of global warming have accentuated the need to replace petroleum-fueled vehicles with emission-free substitutes. After decades of R&D, the industry has found electric vehicles to be the best substitute of traditional-fueled vehicles.
MarketsandMarkets™ Point of View:
Ibrahim Rassiwala – Senior Research Analyst : Chemicals and Materials, at MarketsandMarkets™, shares his Point of View as mentioned below:
With a view to reduce crude oil consumption, automotive emissions, and air pollution, governments around the world are adopting and implementing favorable policies to promote the use of electric vehicles. EV promotion efforts are increasing, with continuous support from many governments, automotive OEMs, and other government & non-government agencies that are not only promoting the sales of zero-emission vehicles, but also taking steps toward a favorable regulatory framework, charging infrastructure, and financial support.
Per a MarketsandMarkets™ research study, the global electric vehicle sales in 2017 reached 1.19 million units, and is projected to witness a huge increase of 32.57% to reach 10.79 million units by 2025. This growth is mainly because of the improving charging infrastructure, increasing vehicle range, and reducing cost of batteries.
Ambitious EV targets and policy support from governments across the globe have resulted in the lowering of EV costs. In addition, factors such as extended vehicle range and improvement in charging infrastructure have fueled the demand for electric vehicles, globally. The Electric Vehicles Initiative (EVI), which is a multi-government policy forum dedicated to accelerating the introduction and adoption of electric vehicles, worldwide, has set a target of reaching an electric car fleet of 20 million by 2020, globally. The Paris Declaration on Electro-Mobility and Climate Change has also set a similar global deployment target of 100 million electric cars by 2030. Countries, including China, have a low waiting period for electric vehicles as compared with ICE powered vehicles. Due to the growing stringency of emission norms, the European countries, including Germany are planning to have one million electric vehicles on road by 2020. China dominates the market for passenger electric cars, followed by the US. North America is expected to be the fastest-growing market for electric vehicles. However, countries in APAC, such as Japan and China also have huge potential for the electric vehicle market. In 2017, China overtook the US to become the largest market for electric vehicles. The key players in the electric vehicle market are ABB (Switzerland), Tesla (US), Schneider Electric (France), ChargePoint (US), and AeroVironment (US).
Electric passenger car being the largest segment of the global electric vehicle market is witnessing huge adoption, owing to the rising demand for fuel-efficient vehicles, increasing environmental awareness among consumers, and competitive pricing in comparison to ICE passenger cars.
Significant advances in financial support from governments in the form of tax rebates and subsidies and regulations to promote eco-friendly vehicles have led to an increase in the electric vehicle adoption rate. Additionally, the demand for electric vehicles has increased due to improvement in battery technology, charging technology, and increased vehicle range. Earlier, electric vehicle batteries took a long time to charge completely. Level 3 or level 4 chargers can now charge an electric vehicle in less than an hour, which enables the vehicle to run for more than 200 kilometers. Government regulations, improved efficiency and performance range, and the availability of subsidies for electric vehicles are the key factors influencing the buying decision of consumers.
EV charging station is an infrastructure that uses electricity to charge battery electric vehicles (BEVs) or plug-in hybrid electric vehicles (PHEVs). The station consists of a box with a cord and a plug. Some charging stations can be used at home while others are used for on-street facilities provided by electric utility companies. Panasonic Corporation (Japan), Automotive Energy Supply Corporation (Japan), BYD Auto Co., Ltd. (China), and Samsung SDI (South Korea) are some of the largest battery manufacturers that cater to the global demand for EV batteries.
Overall, the market for electric vehicles is growing at a rapid pace in the countries, such as the US, Canada, the UK, and Germany due to the availability of charging infrastructure, which is a key driver for the increasing adoption of electric vehicles. Government funding, subsidies, and incentives; increasing concerns regarding environmental pollution, and huge investments by automakers in electric vehicles are also driving the electric vehicle market.
Since passenger car is the largest segment of the automotive industry, it offers immense growth opportunities for the electric vehicle market. The passenger car segment of the electric vehicle market is growing at a significant rate in the emerging economies of APAC, owing to the rise in the GDP and population, improved lifestyle, increased purchasing power of consumers, and the development of infrastructure. Therefore, the market for electric vehicles is emerging, with China and the US at the forefront.