Growing government incentives, subsidies and exemption of road taxes drive the penetration of electric vehicles (EVs) of all types fuelling the EV market, which is projected to surpass the valuation of $ 1.53 trillion by 2031.
According to the latest report on Electric Vehicle Market by Transparency Market Research, the market is expanding at a CAGR of 26.62% during 2021 - 2031. Passenger vehicles have emerged as the lucrative segment for players in the electric vehicles market.
State policies offer subsidies for e2W based on the size of their lithium-ion battery packs, promoting the adoption of products in the EV market. In addition, policymakers in developed and emerging economies are offering financial incentives, which help market players strengthen charging station infrastructure and vehicle dealership training, the global market intelligence company said.
Leading carbon emitters of the world are embracing the electrification of road transport as a key step toward meeting their climate goals. Various legislations, notably in India, China, and the US are thus promoting zero-emission vehicle (ZEV) standards, catalysing automotive manufacturers to increase the production of EVs. In turn, this has spurred the commercialisation scope of EVs. Consequently, this has been propelling industry investments in battery infrastructure, especially to spur sales of passenger and commercial vehicles, Transparency Market Research observed.
Thus, a combination of favourable economics and climates concerns arising from the steadily rising CO2 emissions from the transportation industry are broadening the outlook.
Some of the key players in the EV market include Volvo Cars, Toyota, Protean Electric, Nissan, Hyundai, Honda, Motors, Ford, Daimler, Continental, BMW, Baic Motor and ABB.
According to the report, the introduction of new battery chemistries, adoption of new battery materials, and advancements in manufacturing techniques by vehicle manufacturers have catalysed the market prospects for all types of EVs. In developed countries, such as Europe and North America, incentives for EVs have translated into increased access to charging stations.
Furthermore, in emerging markets, manufacturers of battery-powered two-wheelers are looking to capitalise on the vast consumer appetite for green electric alternatives. For instance, several automobile manufacturers in the EV market have geared towards expanding the charging options for their new models and also the cost by incorporating simpler battery designs.
Transparency Market Research stated that the high cost of EVs compared to vehicles powered by internal combustion engines is a major concern for buyers. Nonetheless, in recent years, there has been an increased propensity for all stakeholders—ranging from raw material suppliers to automotive manufacturers to battery manufacturers and recyclers—to collaborate and improve the environmental footprint of EVs on one hand while making them more affordable.
Several leading automotive manufacturers are keen to capture revenues by meeting the substantial demand for electric cars, such as in India. Governments in the European Union and the UK have been offering utility incentive programmes, which spurred the growth momentum of the electric vehicles market.
The rise in demand for oil in various countries, coupled with soaring fuel prices the world over in recent years, has nudged policymakers to promote awareness about electrical alternatives. A few countries have been looking to phase out sales of internal combustion vehicles in the next few decades.
The past few years have witnessed governments in various countries developing new guidelines and plans to become carbon neutral by adopting non-fossil fuel energy sources. Subsequently, this has spurred the implementation of green policies, notably in the transportation sector, as it is viewed as one of the most significant contributors to global carbon emissions. This is a key driver for consumer awareness about the gains of electrification of the sector, thereby boosting the appetite for electric vehicles, the global market intelligence company noted.
Courtesy: Transparency Market Research. NB: Photo is representational; courtesy: Volvo Cars.