Electric Vehicle Market Trends

Growth Drivers

• Expansion of charging infrastructure: Some regions are actively working to build an extensive public charging infrastructure, as it acts as a fundamental requirement for electric vehicle adoption. According to the European Alternative Fuels Observatory, the EU operated 632,423 public charging points by 2023 to support approximately 3 million battery electric vehicles. The European Commission targets 3.5 million chargers by 2030, yet additional installations of 2.9 million devices are required to reach this goal, which translates to 410,000 annual installations. Such innovations are expected to create immense opportunities for the market. Moreover, reliable expansion of charging infrastructure is critical for overcoming anxiety about vehicle range enhancement as well as boosting user convenience to push EV market growth throughout Europe.
• Zero-emission goals: The trend towards zero-emission electric vehicles is creating a great deal of momentum around the world.  The UN states that in 2023, global greenhouse gas emissions spiked to an all-time high of 57.1 gigatons of CO₂, a 1.2% increase from the previous year.  This is leading both consumers and business enterprises to move towards cleaner alternatives.  Environmental concerns are driving consumers towards electric vehicles. Additionally, regulatory efforts are taking off, and government investment is needed in clean mobility.  This collaborative effort is driving innovation in the field of electric vehicle development as well, ranging anywhere from the development of batteries with longer ranges to more public charging options in urban settings, making EV vehicles achievable and accessible modes of twenty-first century transportation.  
• Rising fuel prices and economic operating costs: Given the volatility of oil prices around the world and a general trajectory upward in fuel pricing, electric vehicles are far less expensive in operate. Electric vehicles have much lower energy costs per mile compared to gasoline or diesel. Maintenance costs are also lower because of fewer moving parts, no oil changes, and regenerative braking. Individuals as well as fleets of vehicles are more attracted to electric vehicles for lower costs in the long run. As long as fuel remains volatile, especially in oil-importing countries, the economic decision to transition fleets to electrics will remain a major incentive across all vehicles and segments including two-wheelers, cars, and commercial vehicles.

Development of natural gas prices for household consumers in the EU, 2014-2024

Source: European Commission

Global Electric Car Sales from 2014 to 2024 (in millions)

Source: IEA

Global Electric Car Sales by Region and Type (2014-2024) (in Million)

Source: World Economic Forum

Challenges

• High upfront costs: High upfront costs are expected to be a major barrier to the broad adoption of electric vehicles. While battery prices have lowered over the years, it is still evident that EVs are more costly than internal combustion engine (ICE) vehicles, as they are still expensive due to the high cost of batteries. This problem is especially prevalent in developing markets where consumers may have lower disposable income and fewer avenues to finance the purchase of EVs. However, government subsidies, tax incentives, and rebates are expected to cut battery prices and promote the adoption of zero-emission vehicles.
• Limited charging infrastructure: The accessibility to charging infrastructure continues to be a significant barrier in the uptake of EVs. In contrast to gasoline stations, which are visible and considered the normal infrastructure, public EV charging stations are limited, especially in rural and less developed settings. Given the widespread perception of slow charging speeds, battery types, and different charging standards for EVs, this fear is known as "range anxiety". Also, the other factors involved in charging that can create have been cited as potential hurdles to the user experience.