How big is the electric cars market today, and what are its future growth expectations?
The electric cars market size has grown exponentially in recent years. It will grow from $474.31 billion in 2024 to $619.37 billion in 2025 at a compound annual growth rate (CAGR) of 30.6%. The growth in the historic period can be attributed to environmental concerns, government incentives, consumer demand for efficiency, increasing demand for hybrid powertrains, rising demand for automated transmission.
The electric cars market size is expected to see exponential growth in the next few years. It will grow to $1677.4 billion in 2029 at a compound annual growth rate (CAGR) of 28.3%. The growth in the forecast period can be attributed to battery technology advancements, stricter emissions regulations, infrastructure expansion, autonomous electric vehicles, rising demand for connected cars. Major trends in the forecast period include range improvement, electrification in various segments, charging convenience, integration of smart technology, sustainable materials.
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What have been the primary factors driving the electric cars market’s growth?
The growing demand for electric vehicles is driving the growth of electric cars market. Electric cars are one of the fastest-growing segments of the electric vehicle market. According to the IEA, in 2021, electric car (including fully electric and plug-in hybrids) sales doubled compared to previous years to nearly 6.6 million. According to Forbes, electric vehicles (EVs) will surge to 57%, which is more than half of global passenger car sales by 2040. The major companies in the automobile industry, such as Tesla, BMW, Volkswagen, and others, are expected to release around 200 models of electric vehicles. Electric vehicles don’t use fuel or gas, and they are more economical than other vehicles. The demand for an electric vehicle is growing because of its low maintenance, less carbon emissions, convenient charging, less noise from the engine, and higher fuel costs. The growing demand for electric vehicles is driving the growth of electric cars market. Electric cars are one of the fastest-growing segments of the electric vehicle market. For instance, in August 2024, according to a report published by the International Trade Administration, a US-based agency, e-commerce for consumer goods was projected to account for sales of hybrid electric vehicles that surged by 30.7% year-over-year, increasing their market share from 8.6% in 1Q24 to 9.6% in 2Q24. Their share grew slightly from 1.7% to 2.0% year over year. Electric vehicles don’t use fuel or gas, and they are more economical than other vehicles. The demand for an electric vehicle is growing because of its low maintenance, less carbon emissions, convenient charging, less noise from the engine, and higher fuel costs.
What are the key segments within the electric cars market?
The electric cars market covered in this report is segmented –
1) By Type: Battery Electric Vehicle (BEV), Plug-in Hybrid Electric Vehicle (PHEV), Hybrid Electric Vehicle (HEV)
2) By Battery Type: Lithium-Iron-Phosphate (LFP), Lithium–Nickel–Manganese Cobalt Oxide (Li-NMC), Lithium–Titanate Oxide (LTO) Battery, Lithium–Nickel–Cobalt–Aluminum Oxide (NCA) Battery, Nickel–Metal Hydride (NiMH) Battery, Lead Scid Battery
3) By Application: Home Use, Commercial Use
Subsegments:
1) By Battery Electric Vehicle (BEV): Compact BEVs, Mid-Size BEVs, Full-Size BEVs, Luxury BEVs
2) By Plug-In Hybrid Electric Vehicle (PHEV): Compact PHEVs, Mid-Size PHEVs, Full-Size PHEVs, Luxury PHEVs
3) By Hybrid Electric Vehicle (HEV): Full Hybrid Electric Vehicles (FHEV), Mild Hybrid Electric Vehicles (MHEV)
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Which key players are shaping the electric cars market?
Major companies operating in the electric cars market include Toyota Motor Corporation, Bayerische Motoren Werke Aktiengesellschaft, BYD Company Limited, Tesla Inc., Renault Group, Volkswagen AG, General Motors Company, Beijing Automotive Industry Holding Co. Ltd., SAIC Motor Corporation Limited, Daimler AG, Chery Automobile Co. Ltd., Hyundai Motor Company, Ford Motor Company, Changan Automobile Co. Ltd., Volvo Car Corporation, Anhui Jianghuai Automobile Co. Ltd., Renault-Nissan-Mitsubishi Alliance (Renault-Nissan SAS and Mitsubishi Motors Corporation), Jiangling Motors Corporation Group (JMCG), Zotye Automobile Co. Ltd., Mitsubishi Motors Corporation, Zhengzhou Yutong Bus Co. Ltd., Geely Automobile Holdings Limited, Great Wall Motor Company Limited, Audi AG, Jaguar Land Rover Automotive PLC, Mahindra Electric Mobility Limited, Honda Motor Co. Ltd., Energica Motor Company S.p.A., Nissan Motor Co. Ltd., Lightyear BV
How will emerging trends drive the electric cars market throughout the forecast period?
Major players in the electric car market are focusing on new electric vehicles, such as electric SUVs, to meet growing consumer demand for sustainable and high-performance mobility solutions. Electric SUVs are sport utility vehicles powered entirely by electric motors using energy stored in rechargeable battery packs, offering a sustainable alternative to traditional fuel-powered SUVs. For instance, in November 2024, Mahindra & Mahindra, an India-based automobile manufacturing company, has unveiled its flagship electric SUVs, the BE 6e and XEV 9e, starting at Rs 18.90 lakh and Rs 21.90 lakh, respectively, with deliveries expected by early March 2025. Featuring advanced LFP battery technology and certified ranges exceeding 650 km, these launches aim to strengthen Mahindra’s position in the competitive EV market.
How do regional factors impact the electric cars market, and which region is the largest contributor?
Asia-Pacific was the largest region in the electric cars market in 2023. Western Europe was the second largest region in the electric cars market. The regions covered in the electric cars market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
What Does The Electric Cars Market Report 2025 Offer?
The electric cars market research report from The Business Research Company offers global market size, growth rate, regional shares, competitor analysis, detailed segments, trends, and opportunities.
An electric car is an electric vehicle that runs on a chargeable battery such as a nickel-metal hydride (NI-MH) battery, lithium-ion battery, or fuel cell battery.
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