The Electric Vehicle Market was valued at US$ 4093 thousand units in 2021 and is estimated to reach US$ 34,756 thousand units by 2027, with a CAGR of 22.6% from 2022 to 2027.

An electric vehicle, unlike other vehicles that run on fuel, is powered by electricity. The built-in electric motor provides constant power from the batteries and does not have an internal combustion engine. Lithium-ion batteries, zinc-air batteries, molten salt batteries, and other nickel-based batteries are some types of batteries used for electric vehicles. Electric vehicles are specifically designed to reduce pollution. With the latest technological advancements in electric vehicles, many people are inclined to adopt these vehicles. It is expected that the global share of electric vehicles will increase from 2% in 2016 to 30% by the end of 2030. Electric vehicles can be charged with electricity and are environmentally friendly vehicles.

The increasing prevalence of air pollution reduction across the globe due to the trend of adopting electric vehicles instead of vehicles that run on fuel is a major factor driving the demand for the electric vehicle market. Moreover, government support for the manufacturing of electric vehicles with the latest technologies is a major trend in the electric vehicle market.

Market Drivers and Restraints:

Increasing demand for carbon emission reduction is a key factor driving demand in the market. Growing awareness about the introduction of various electric vehicles with the latest features is increasing the demand in the market. In many countries, government organizations are investing heavily in electric vehicles, which is positively impacting the growth rate of the market. Moreover, the creation of awareness through digital platforms is having a major impact on the demand for the electric vehicles market. Increasing demand for zero-emission vehicles is likely to boost the market demand. Also, the introduction of various schemes in favor of end users by companies will boost the growth rate of the electric vehicle market. The introduction of vehicles with advanced features is expected to level the growth rate of electric vehicle market sales.

In the future, the demand for electric vehicles happens to be increasing across the globe due to rising fossil fuel prices. This attribute is expected to sustain the market demand to some extent. Decreasing fossil fuel reserves drive the increasing prices of gasoline and diesel, which increases the growth rate4 of the electric vehicle market. The electric vehicle has the ability to convert 50% of the electrical energy from the grid, which increases the demand for the market. E-commerce companies such as Amazon and others are introducing electric vehicles to reduce carbon emissions, which is boosting the demand for electric vehicles. Government plans to introduce many electric buses as public transport, especially in developed and developing countries, which will boost market demand. Collaborations among market players to bring an advanced version of electric vehicles with upgraded features are boosting the market demand. Focusing on launching lower-cost electric vehicles by automotive companies with the latest technologies will boost market growth.

However, electric vehicles are very expensive and not affordable for ordinary people, which is slowly limiting the demand in the electric vehicle market. The lack of skilled technicians and high maintenance requirements are restraining the growth rate of the market. Increasing risks of the vehicle during long trips are slightly hindering the demand for electric vehicles. Stringent government rules and regulations in approving new technologies pose a major challenge to market players. The rising cost of raw materials used to manufacture electric vehicles is increasing the cost of the final product, which is restricting the demand in this market. The lack of suitable charging stations is restraining the growth rate of the market.

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The report is segmented as follows:

The Electric Vehicle Market is segmented by Vehicle; the Market is segmented by Propulsion; the Market is segmented by Components; the Market is segmented by Charging Station; the Market is segmented by Vehicle Class; the Market is segmented by Power Output:

By Vehicle (Passenger Car, Commercial Vehicle, Two-Wheeler)

By Propulsion (BEV, FCEV, PHEV, HEV)

By Components (Battery Cells and Packs, O-Board Charge, Infotainment, Electric Motor)

By Charging Station (Normal Charging, Super Charging)

By Vehicle Class (Mid-Priced, Economy, Luxury)

By Power Output (Less than 100 KW, 100-250 KW, Above 250 KW)

Market Regional Segmentation:

North America holds the largest share of the electric vehicle market. Rising per capita income and growing investments in the automotive industry are increasing the demand in the market. Creating awareness about reducing pollution in all countries is significantly boosting the demand for this market in North America. In emerging economies such as the U.S. and Canada, the demand for electric vehicles has been very high in recent years. The rapid adoption of technological advancements in the automotive industry is driving the growth rate of the electric vehicle market. The government has set a target to increase the production rate of electric vehicles by 2050, which is likely to boost the demand in the market.

Europe is the next country with the largest share in the electric vehicle market. High disposable income in urban areas and increasing adoption of electric vehicles amid rising fuel prices are boosting the demand in the European market. Government support in providing subsidies for electric vehicles is also driving the demand in the market. Countries such as Germany and the U.K. are focusing on introducing new electric vehicles with advanced technologies at lower costs, which are gaining more traction over the market shares.

Asia Pacific is expected to witness the highest CAGR in the coming years due to increasingly stringent government rules and regulations to promote zero-emission vehicles. India and China are major contributors to market share. The Chinese electric vehicle market has the highest growth opportunity. The installation of electric charging stations with good infrastructure is a key growth factor for the market in China. India plans to increase sales of electric vehicles by introducing electric buses in urban areas. The introduction of innovative technologies is accelerating the growth rate of the electric vehicle market.

Latin America will witness a significant growth rate in the upcoming period. The sales of the electric vehicle market in the Middle East and Africa will show a slow growth rate during the forecast period 2022 - 2027.

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Impact of the COVID-19 pandemic on the market:

The sudden outbreak of the COVID-19 pandemic resulted in enormous losses for businesses. The flight ban and strict lockdown measures in 2020 brought many changes to the company. In the first days of the pandemic, all companies were completely shut down due to the restrictions imposed by the government, which limited the production and sale of new vehicles. Manufacturers of inputs were stopped until the government issued guidelines to release vehicles. In 2021, all companies slowly resumed their operations as instructed by the government, and the demand for electric vehicles slowly increased. The market shares of electric vehicles will soon reach the highest CAGR.

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