Originally published by Spendedge: Why is Electric Vehicle Market the Biggest Investing Sector for the Next Decade?
Global electric car market share and size
The electric vehicle sector is projected to witness sales surpassing 5 million units worldwide in the next five years. Europe, led by countries such as Norway, Germany, and the UK, is poised for rapid growth in electric vehicle adoption. Additionally, the implementation of various electric vehicle-related policies is expected to drive market expansion.
Market consolidation and collaboration among major industry players are viewed as critical factors in the electric vehicle market. Automotive companies are expanding their presence through partnerships with local entities while aiming for synergies to develop more advanced electric vehicles, leveraging their technological expertise. Furthermore, the growing demand for electric vehicles with longer ranges is anticipated to unlock significant growth opportunities, potentially displacing a substantial portion of internal combustion engine-powered cars.
Companies in the electric vehicle market are adapting to market demands by enhancing their market presence. They can utilize customized supply market intelligence solutions to stay informed about market dynamics.
Electric vehicle market trends
Monetary government subsidies
Despite its relatively small current market size, the electric vehicle market holds significant growth potential. Governments worldwide are planning substantial investments to incentivize electric vehicle adoption through policies such as purchase credits, free charging station usage, establishment of charging infrastructure, and complimentary parking for electric vehicles. Companies are encouraged to explore opportunities in European nations and capitalize on evolving political agendas. While the market size remains modest, companies should seize the dynamic conditions shaped by governmental regulations to support electric vehicle purchases.
Shared mobility services
The utilization of shared mobility services is rapidly increasing, with over a billion individuals globally using ride-hailing apps. The continued growth of such services is expected to reduce the demand for private vehicle ownership, with shared mobility services likely to embrace electric vehicles due to favorable economics and governmental policies. While electric vehicles currently constitute a small portion of the shared mobility fleet, their share is anticipated to expand significantly by the end of the decade.
Failure to keep pace with the shared mobility fleet category could hamper the growth of the electric vehicle market. Companies are advised to engage procurement experts to gain comprehensive market insights.
Technology advances
Advancements in battery storage technology have been accelerated by the high demand for batteries in consumer electronics. Ongoing developments, such as changes in battery characteristics and the scale of manufacturing plants in the automotive sector, indicate continued cost reductions. The expansion of manufacturing capacity for automotive batteries reflects the dynamic nature of battery technologies and underscores the significance of electric vehicles in achieving further cost reductions in battery storage, thereby driving the electric vehicle market forward.
Key indicators in the electric vehicle market
Incentives and Subsidies: Governments frequently offer financial incentives and subsidies to both consumers and manufacturers to promote electric vehicle adoption. These incentives, including tax credits and rebates, make electric vehicles more appealing to consumers and help offset initial higher costs.
Charging Infrastructure Development: Government initiatives aimed at establishing a widespread and accessible charging network are critical for electric vehicle market growth. Policies supporting public charging stations, regulatory frameworks, and collaborations with private entities signify a supportive environment.
Emission Standards and Regulations: Stringent emission standards and regulations on conventional vehicles can drive electric vehicle demand. Government policies encouraging automakers to produce electric or low-emission vehicles play a pivotal role in transitioning to cleaner transportation options.
Research and Development Support: Government support for research and development in the electric vehicle sector can accelerate technological advancements. Funding for innovative technologies and battery research signifies a commitment to long-term sustainability and competitiveness.
Public Procurement and Fleets: Government procurement policies can significantly impact the electric vehicle market. Prioritizing electric vehicles in government fleets or public transportation systems creates a stable market for manufacturers and drives economies of scale.
Development: Electric vehicle & charging technology
The surge in electric car registrations has led to increased production of automotive lithium-ion batteries, with EV battery demand rising by 65% in 2022. Growing sales of battery electric vehicles and plug-in hybrid electric vehicles have driven this surge. To meet the rising demand for electric vehicles, all facets of the EV battery supply chain, from raw material extraction to EV production, must expand. Developments in battery characteristics, including changes in battery chemistry and energy density, are expected to yield cost reductions and enhance production efficiency. The expansion of electric car production capacity by various EV manufacturing plants, supported by increased policy backing, indicates that the supply of EVs will keep pace with demand.
Conclusion
The global electric vehicle (EV) market is experiencing rapid growth, with sales projected to exceed 5 million units globally over the next five years. Europe, particularly Norway, Germany, and the UK, is expected to lead in EV adoption. Market consolidation and collaborative ventures among major firms are driving advancements in EV technology and market expansion. Government subsidies and the rise of shared mobility services are further propelling EV adoption. Technological progress, particularly in battery storage, is reducing costs and enhancing production efficiency in the EV market. Key indicators such as incentives, charging infrastructure development, emission standards, and public procurement policies signal strong support for EV expansion. The surge in EV battery demand necessitates the expansion of the entire supply chain, promising a sustainable future for the global EV industry encompassing electric cars, buses, trucks, and hybrid vehicles.
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