The global electric vehicle market will reach $8,8-trillion by 2030, growing at a CAGR of 33,6% from 2024 to 2030, according to a new report from Grand View Research.

Growing emphasis on environmental sustainability and the need to reduce greenhouse gas emissions is propelling the growth of the electric vehicle (EV) market.

Governments across the world are implementing stringent regulations and offering substantial incentives – such as the UK plug-in vehicle grant, the clean vehicle rebate project federal tax credit in California, and Italy’s Superbonus tax credit – all aimed at promoting the adoption of EVs and recognising their potential to significantly cut down on air pollution and dependence on fossil fuels.

Additionally, advancements in battery technology are enhancing the efficiency, range, and affordability of EVs making them more appealing to consumers and thereby fostering the growth of electric vehicles in the market.

The growth of the EV market is being significantly driven by the replacement of existing vehicle fleets with electric alternatives.

This transition is propelled by several key factors, including the increasing awareness of environmental sustainability, stringent government regulations aimed at reducing carbon emissions, and the long-term economic benefits of EVs. Automakers and government agencies are leading this shift by updating their fleets with electric vehicles to meet sustainability goals and comply with regulatory standards.

For example, in January 2024, AB Volvo introduced a heavy truck model named Volvo FM Low Entry developed with electric drive. The launch is in line with the company’s aim to expand the electric product range and aid customers in a smooth transition from conventional trucks to fully electric trucks for local transportation.

Additionally, advancements in EV technology such as improved battery life and faster charging times have made electric vehicles more practical and appealing. Financial incentives, such as tax rebates and subsidies, further encourage the adoption of EVs.

Additonal highlights from the report include:

* Based on type, the passenger car segment is expected to register the fastest growth from 2024 to 2030. Prominent battery manufacturers and passenger car manufacturers are focusing on improving batteries to offer longer ranges. This technological progress opens avenues for innovation in charging infrastructure, faster-charging solutions becoming increasingly available, reducing charging times, and enhancing the convenience of EV ownership.

* Based on propulsion type, the Battery Electric Vehicle (BEV) segment is anticipated to hold the highest share from 2024 to 2030. Automakers are majorly focusing on investment in electric vehicle development, underscoring the growing significance of BEVs in the transportation sector. Prominent players in the automotive industry are ramping up their electric vehicle offerings and introducing new models with enhanced features and competitive pricing, thereby contributing to segmental growth.

* The Fuel Cell Electric Vehicles (FCEV) segment is anticipated to witness a significant growth from 2024 to 2030 owing to the advancements in hydrogen production and infrastructure that have played a crucial role in the expansion of FCEVs. Innovations in hydrogen generation methods such as electrolysis powered by renewable energy sources have made hydrogen production more sustainable and cost-effective.

* Based on drive type, the Front-wheel Drive (FWD) segment held a market share of 58,5% in 2023. Automotive manufacturers are investing heavily in FWD EV platforms to streamline production processes and reduce costs, leveraging economies of scale. Technological innovations in electric drivetrains have also played a pivotal role, allowing for more compact and efficient FWD systems that provide adequate power and performance.

* Based on end-use, the personal electric vehicle sector is projected to capture a substantial portion of the market propelled by increasing interest in advanced, eco-friendly modes of individual transportation. This growth is fueled by the synergy between autonomous driving technology and electric drivetrains as they combine to offer efficient and intelligent transportation solutions, thus contributing to widespread consumer adoption.

* Asia Pacific is expected to register the fastest CAGR from 2024 to 2030. The Asia Pacific region is witnessing a remarkable surge in the adoption of electric vehicles – particularly electric scooters. This trend is primarily fueled by the increasing awareness of environmental sustainability and the pressing need to reduce carbon emissions. Electric scooters, with their compact size, agility, and zero-emission nature are emerging as the go-to-choice for many urban dwellers which is propelling the growth of electric vehicles in emerging economies of Asia Pacific.