Electric Passenger Cars Market Size, Share & Trends, COVID-19 Impact Analysis | 2021-2028
The global electric passenger cars market was worth USD 120.81 billion in 2020. It is expected to grow at a compound annual rate (CAGR 32.5%) between 2021 and 2028. The adverse effects of COVID-19 lockdowns in the first half of 2020 on the automotive industry caused a significant drop in passenger car sales worldwide. Despite all this chaos, 2020 saw a significant year for the market with approximately 3.0M units sold, nearly 40% more than 2019. China, with its government’s support, was a significant market disruptor with the success stories of WulingHongguang Mini EV (and Tesla Model 3). China accounted for more than 30% of global electric car sales in 2020. It will continue to enjoy great momentum, thanks to the expanding network of public EV charging infrastructures and the anticipated rise in consumer demand during the forecast period
Electric vehicles are one of the most important technologies to reduce air pollution. To encourage their adoption, subsidies are provided by governments around the world for electric vehicles. The Canadian government offers a subsidy of up to USD 3700 for the purchase of plug-in hybrid electric and battery electric vehicles. The Japanese government also provides a subsidy of up to USD 3,700 for the purchase of battery electric vehicles and USD 1,800 for the purchase of plug-in hybrid electric vehicles.
Due to rising fuel prices, electric vehicles are gaining popularity in many countries. Electric vehicles can be used as an alternative to petrol and diesel vehicles. They are powered by lithium-ion batteries and have a hybrid charging facility. Many ride-hailing companies have set their sights on electric vehicles replacing their internal combustion engines. Uber India, for instance, plans to have 3,000 electric vehicles in its fleet before the end of 2021.
The overall business environment for 2020 and the subsequent years have been altered by the COVID-19 pandemic. The pandemic has caused significant disruption in many industries, including the automotive industry. The pandemic was a time of high demand for electric passenger cars. Global sales of electric passenger cars increased by more than 40% in 2020 compared to 2019. Most companies experienced disruptions in their production processes due to the lockdown. The increasing government initiatives to promote low-emission fuel vehicles led to an increase in electric passenger car adoption after the lockdown.
In 2020, the battery electric vehicle segment was responsible for more than 60% of the total revenue. It is expected to continue its dominance in the future. More than 15 BEV models were available in the U.S. as of 2021. BEV will see a slower growth rate than PHEV due to range anxiety. The Tesla Model S has the best range, while the model 3 is the most efficient. In 2020, 70% of all BEV sales were made by the vendor.
In terms of revenue, the plug-in hybrid electric car segment will experience the highest CAGR (over 32%), over the forecast period. Government authorities in both developed and emerging countries have taken initiatives to encourage EV use. PHEVs combine batteries and alternative fuel to power their internal combustion engines. Volkswagen Group is focusing its efforts on increasing sales of plug-in electric cars. The company announced a 60.0% increase in plug-in electric vehicle sales between 2018 and 2020.
In 2020, the European market was responsible for more than 45% of the total revenue. This high revenue share can be attributed to increasing sales of electric passenger cars in countries like Germany, France, and Norway. As part of their efforts to combat the effects of the pandemic, the European governments have increased subsidies for electric cars. In Germany, for example, subsidies were increased by USD 2,500 to USD 1,500 for the purchase of PHEV and BEV.
Asia Pacific is expected to experience a CAGR exceeding 37% in revenue between 2021 and 2028. China, Korea, Japan lead the region’s market. China, the largest producer, and user of electric passenger vehicles will be the dominant market player for the duration of the forecast period. There have been many steps taken by the government to encourage the adoption of electric cars, such as subsidies for buyers and the installation of charging stations for electric vehicles. Also, laws requiring manufacturers to produce electric vehicles according to the number of vehicles produced have been passed.
North America will experience the second-highest CAGR, at over 39%, in terms of revenue between 2021 and 2028. In 2020, the U.S. was the country with the highest revenue share and will continue to be the dominant force over the forecast period. The sales of electric vehicles in the United States declined in 2019 and 2020 due to a decrease in the federal tax credit for General Motors Company (and Tesla).
With the presence of many regional and global players, this market is highly competitive. The market was dominated in 2020 by Tesla, SAIC Motor Corp Limited, TOYOTA MOTOR COMPANY, TOYOTA MOTOR Co., General Motors Company and Nissan Motor Company. The industry’s main strategy is organic growth. This includes product launches to satisfy consumer demand and expand product offerings. TOYOTA MOTOR CORPORATION, for example, announced in April 2021 the launch of LS in Japan and Mirai in North America. These models are equipped with advanced driving assistance technology.
To increase electric vehicle adoption, market players are also keen to form partnerships and joint ventures. BYD Company Ltd. and TOYOTA MOTOR CORPORATION entered into an agreement in April 2020 to create a new company called BYD TOYOTA EVO TECHNOLOGY CO. LTD. This company is responsible for the research and development of BEVs. The following are some of the major players in the global market for electric passenger cars:
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