The global electric passenger cars market size is expected to reach USD 1.04 trillion by 2028, growing at a anticipated CAGR of 32.5% from 2021 to 2028.
The rising crude oil prices, coupled with favorable government initiatives to promote electric vehicle adoption, are expected to drive the demand for Electric Vehicles (EVs).
Moreover, increased benefits offered by electric vehicles over internal combustion vehicles, such as lower total cost of ownership, better performance and zero fuel emission, are anticipated to contribute to the growing demand for EVs in the forthcoming years.
The cost of electric vehicle batteries has been declining over the past few years owing to the mass-scale production of electric vehicle batteries and technological advancements. This has resulted in a decrease in the cost of electric vehicles as the battery is one of the most expensive and prominent parts of an electric vehicle.
In 2010, an electric vehicle battery cost more than USD 1,000 per kWh. The price dropped in 2020 to over USD 135 per kWh. This decline in the cost of electric vehicle batteries is expected to create significant opportunities for users and manufacturers over the forecast period.
The Covid-19 pandemic has resulted in lockdowns and social distancing globally, consequently leading to losses for automobile, manufacturing, entertainment, restaurant and hospitality industries. The unfavorable business scenario has impacted the production of electric vehicles in 2020.
However, the overall sales of electric passenger cars increased by over 40% in 2020, reaching around 3 million units. Several companies across the developed and emerging economies have increased their electric vehicle charging stations post lockdown. Moreover, the market did not face significant losses during the pandemic due to increased demand. Besides, with favorable government initiatives to support electric vehicle adoption, the market will likely witness significant growth over the coming decade.
In 2020, Europe captured around 45% of the electric passenger cars demand and is estimated to register a CAGR exceeding 39% over the forecast period. This share is attributed to the rising demand for electric passenger cars in countries such as Germany, the U.K., France, Norway, Netherlands and Sweden.
Moreover, 2020 was the target year for the EU’s emission standards that limit the average CO2 emissions per km driven for new cars. The European government also increased subsidies in countries such as France, Germany and Italy to increase the sale of electric vehicles in the region and counter the pandemic’s effect.