The global electric vehicle market size was estimated at USD 317.26 billion in 2024 and is anticipated to reach around USD 2,453.48 billion by 2034, expanding at a CAGR of 22.69% from 2025 to 2034.
The growing funding and investments by key market players drive the electric vehicle market growth. Ford had previously stated that it would invest $11.5 billion in electrifying its vehicle lineup between now and 2022. It recently claimed that it had upped its spending on driverless and electrified vehicles to help boost vehicle sales in the face of ongoing lockdowns. Mercedes-Benz also confirmed that it will release 25 new plug-in hybrid electric vehicles and entirely electric cars by 2025. Companies' diverse product offers have attracted many customers, resulting in an expanding market for electric vehicles.
Electric Vehicle Market Key Takeaway
Asia Pacific has dominated the market with a 42.14% revenue share in 2024.
The Asia Pacific EV market was valued at USD 107.68 billion in 2024.
By propulsion type, BEV accounted largest revenue share 67.7% in 2024.
By vehicle type, the passenger car segment accounted for 62.4% of revenue share in 2024.
By 2040, Europe is expected to achieve 40% greenhouse gas reduction and net zero by 2050.
In Europe, Norway and Iceland have newly registered 86% and 64% electric cars in 2021 respectively.
The hybrid electric vehicle segment is expected to reach USD 301.67 billion by 2030 valued at USD 77,581.7 million in 2021.
The plug-in hybrid EV segment is expected to hit revenue of USD 385,617 million from 2025 to 2034.
The passenger car electric vehicle market was valued at USD 127,394 million in 2021 and is projected to hit USD 598,735 million by 2030.
The commercial vehicle EV market was valued at USD 47,351.9 million in 2024
The luxury EV market is projected to reach USD 441,273 million by 2030 valued at USD 104,380 million in 2021.
Asia Pacific Electric Vehicle Market Size and Growth 2025 to 2034
The Asia Pacific electric vehicle market size was exhibited at USD 134.11 billion in 2024 and is projected to be worth around USD 1,069.02 billion by 2034, growing at a CAGR of 23.07% from 2025 to 2034.
Geographically, the Asia Pacific region dominated the EV market in 2024 and is anticipated to have the highest CAGR of all the geographies during the forecast period. According to estimates, China will hold the most outstanding market share for electric vehicles in the Asia-Pacific region in 2023, followed by India and Japan. The significant market share of China is primarily attributable to the country's extensive government support and expansion of the infrastructure for charging electric vehicles, improvements in the quality of electric vehicles, and an increase in the number of charging stations.
Asia Pacific is home to most EV battery manufacturers, including China, South Korea, and Japan. The dominance of the battery industry is increasing in China. Chinese manufacturers like CATL and BYD have increased and widened their global market shares due to the government's extensive investments and encouraging regulations.
Furthermore, many people can now afford to own cars because of China's robust economic expansion. As a result, there has been an increase in mobility, the significant automobile market in the world. Still, there has also been a substantial increase in urban air pollution, greenhouse gas emissions, and dependence on imported oil.
China is the primary electric vehicle market globally, accounting for nearly half, i.e., 45% of the global electric vehicle sale. Other countries such as Japan, Korea, and India are also opportunistic markets as the governments of these countries are significantly investing in EV startups to promote the manufacturing and sale of EVs across the globe. In July 2019, the Japanese firm Mitsui & Co. invested USD 13.3 million in an Indian e-Vehicle startup, SmartE. The investment would help SmartE to bring multiple synergies in the global EV market for its long-term growth. Similarly, in June 2019, Toyota Motor Corp. invested USD 2 Bn to develop electric vehicles in Indonesia.
Furthermore, the Indian government's involvement in building a charging infrastructure is also boosting the Asia Pacific EV market. For instance, the FAME II initiative in India provides funding of up to USD 135 million to stimulate investment in EVSE for electric buses. This should pay for one low-power charger and one rapid charger for every ten buses. Thus, the market for electric vehicles in the Asia Pacific area is expanding due to the factors mentioned above.
The governments of developing and developed nations are providing subsidies to market players, and stringent regulations are driving the growth of the electric vehicle market in the Asia-Pacific region. China's Ministry of Transport provides grants and other incentives for developing low-emission bus fleets, affecting the market even more favorably. Despite the COVID-19 outbreak, Chinese bus manufacturers sold 61,000 additional new energy buses in 2020.
Europe and North America witness substantial growth in the global electric vehicle market. This is attributed to the increasing demand for electric vehicles in the U.S., Norway, France, and Germany. Germany and Norway are the leading markets in the European region, witnessing a CAGR of nearly 40%. Moreover, to promote electric vehicles in North America, policymakers, automotive manufacturers, and charging network companies have launched a non-profit organization called ‘Veloz.’ The organization aimed to attract innovation, investment, marketing, and growth in the electric vehicles market. Electrify America, a U.S.-based electric vehicle manufacturer, announced to invest of USD 2 Bn in Zero Emission Vehicle (ZEV) infrastructure across the U.S. over ten years from 2017 to 2027, out of which USD 800 Mn was invested in California, one of the largest ZEV markets across the world.
The upsurge in the growth of the electric vehicles market in the European region is highly attributed to the harmonious developments in implementing strict emigration regulations by the European Union and adding a focus on reducing the number of conventional buses. Norway leads the way for electric mobility relinquishment in Europe. The share of battery electric vehicles in new auto deals rose to 54.3% in 2020, which is anticipated to surpass 65% of the market share in 2021.
The U.S. is dominating the electric vehicle market in the North American region, and the rising demand for electric automobiles in the U.S. accounts for this proportion. In addition, Electrify America, a non-profit organization dedicated to promoting electric vehicle adoption, announced intentions to invest $200.0 million in California in 2018. As a result, demand for electric vehicles in North America is expected to rise over the projection period.
Electric Vehicle Market Growth Factors
A significant number of initiatives taken by the government of various countries, such as tax rebates, subsidies & grants, and other non-financial benefits in car registration and access to carpool lanes expected to drive the sale of electric vehicles in the coming years. For instance, in November 2019, German car manufacturers raised their cash incentives for electric cars to move away from the transition from combustion engines to battery-powered engines to reduce harmful emissions. Countries such as the U.S., China, and different countries in Europe, have registered significant growth in the sale of electric vehicles in the past few decades that, in turn, will contribute to the market growth.
However, lack of charging infrastructure, variations in setting load & lack of standardization are some significant factors hindering the market growth. Different regions, such as China, Europe, the U.S., Japan, Korea, and others, have different standards for electric vehicle charging. Some electric vehicle manufacturers, such as Tesla Inc., are focusing on global standardization of charging infrastructure to overcome this drawback. Nevertheless, the rising adoption of electric vehicles in government and commercial sectors is anticipated to drive the market. For instance, in 2020, the U.K. government approved 200 electric buses with an ambition to make all buses fully electric by 2025, which could save nearly 7,400 tonnes of CO2 every year.
Increase in demand for fuel-effective, high- performance, & low- emigration vehicles
Strict government rules & regulations toward vehicle emigration along with reduction in cost of electric vehicle batteries and adding fuel costs.
Lack of high manufacturing cost, charging structure, and range serviceability and anxiety
The market of electric vehicles is likely to be affected positively by the recent trend of self-driving trucks. Furthermore, the top OEMs, similar to Volvo, Daimler Vera, and Tesla, are among others that have been developing automatic-driving electric vehicles for the market. Therefore, technology regarding self-driving will surge the demand for electric cars, in the long run, owing to the colorful advantages of decreased accident threat, easy use, and presence of value-added features. This technology is anticipated to develop in the coming 5-6 times. Therefore, the growth of self-driving electric vehicle technology will likely bring growth opportunities for the market in the forthcoming period.
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