According to a new market research report, the electric car market is expected to grow at a CAGR of 37.1% from 2021 to 2028 to reach $1.9 trillion by 2028. By volume, this market is expected to grow at a CAGR of 36.2 per cent from 2021 to 2028 to reach 69.3 million units by 2028.
Electric cars use one or two electric traction motors for propulsion instead of a conventional transmission unit solely powered by an internal combustion engine. Traction motors are powered by rechargeable battery packs or through an internal combustion engine that charges the vehicle’s battery pack, which runs the traction motor and propels the vehicle. Such vehicles are known as hybrid electric vehicles.
In battery electric vehicles, the battery pack is recharged by plugging into a charging station connected to the national power grid. Electric cars are increasingly used for private transportation and shared mobility services. The major factors driving the growth of the electric cars market include supportive government policies and regulations, increasing investments by leading automotive OEMs, rising environmental concerns, and decreasing prices of batteries.
Moreover, the growing adoption of autonomous driving vehicles provides significant opportunities in this market. However, the lack of charging infrastructure in developing countries obstruct the growth of this market to some extent. Also, range limitations of electric vehicles, lack of fast-charging infrastructure, and high cost of electric vehicles are major challenges for the growth of the electric cars market.
Geographically, the Asia-Pacific region accounted for the largest share of the global electric car market in 2020 by value and volume. The large share of this region is primarily attributed to increasing demands for EVs and associated charging facilities, growing number of start-ups offering numerous solutions and services in the electric mobility industry, attractive incentive programs for electric car buyers, and the presence of regional core competencies of countries such as China, Japan, South Korea, and India in manufacturing and technological developments. China is expected to dominate the Asia-Pacific market through 2028, mainly due to extensive government support for adopting electric mobility and increasing investments by foreign automotive OEMs in the Chinese electric vehicle industry.
The key players operating in the electric car market are Nio Inc.(China), Alcraft Motor Company Ltd.(U.K.), BMW Group (Germany), BYD Company Ltd. (China), Daimler AG (Germany), Faraday & Future Inc. (U.S.), Ford Motor Company (U.S.), General Motors Company (U.S.), Honda Motor Co., Ltd. (Japan), Hyundai Motor Company (South Korea), Nissan Motor Co., Ltd. (Japan), TATA Motors Limited (India), Tesla, Inc. (U.S.), Volkswagen AG (Germany), and Mahindra and Mahindra Ltd.(India) among others.