The global new energy car market size was evaluated at US$155.172 billion for the year 2020 and is estimated to reach US$951.312 billion by 2027, growing at a CAGR of 29.57%.
New energy refers to all those types of alternative energy, which are any other than fossil fuels. New energy cars are four-wheelers that run with the help of alternative sources of energy that do not burn fossil fuels and even cause less or no harm to the environment, such as electricity, solar, and biogas. The market for new energy cars is projected to witness rapid growth over the forecast period, primarily due to the growing government focus on the adoption and promotion of vehicles with greener energy technologies. Furthermore, the constantly growing adoption of electric vehicles in both developed and developing economies of the globe is owing to the growing disposable income, increasing fuel prices, and increased government spending for the setting up of necessary infrastructure for the easy deployment of electric vehicles. The market is also expected to show decent growth on account of the growing investments by existing automotive manufacturers to enter the market, further showing the potential for the market to witness growth during the next five years. Additionally, the growing efforts by transport providers for the adoption of the electric fleet is also one of the key factors playing a significant role in shaping the market growth in the coming five years. Moreover, the considerably lower maintenance and running costs of these vehicles are also key factors supplementing the adoption of new energy cars globally.
Increased Government efforts are driving the market growth
The global new energy car market is primarily driven by the fact that the governments of several countries globally are implementing various policies and regulations in the automotive sector with an aim to curb carbon emissions and protect the environment. This has further led to increased spending by the governments of various countries for the setting up of necessary infrastructure, which will enable them to deploy NEV cars in a hassle-free manner. For instance, in November 2018, EV Motors India, in partnership with DLF, ABB India, and Delta Electronics, planned to set up 6500 electric vehicles (EC) charging stations across the country over the next five years. Furthermore, the policies implemented by the governments of several countries to promote the sales of electric vehicles are also significantly driving market growth in the next five years. For example, the Electric Vehicle Initiative, a multi-government policy launched under the Clean Energy Ministerial (CEM), is a high-level dialogue among the Energy ministers of the major economies across the globe. The main aim of this policy is to accelerate the introduction and adoption of electric vehicles worldwide. Also, in June 2017, [email protected] by the CEM began to accelerate the deployment of electric vehicles by 30% by the year 2030, thereby positively influencing the market growth over the next five years. Similarly, in developing economies like India and China, among others, governments are taking all the necessary steps to promote sales as well as the production of electric vehicles. For example, the government of India is fostering Investments in research and development in technology, including battery technology, power systems, motors, connectivity, energy management system, monitoring infrastructure, and assuring industry involvement in the National Electric Mobility Mission Plan 2020. Thus, providing an impetus for the market to grow throughout the forecast period. Also, the subsidy schemes for purchasing electric vehicles are another factor that is augmenting the demand for electric vehicles for both individuals as well as enterprise use, thus positively impacting the new energy cars market growth throughout the course of the next five years.
Also, electric cars have been gaining much traction lately, which can be seen from the fact that their deployment has increased exponentially over the past years.
The graph above clearly indicates that the deployment of electric cars globally reached 3.29 million units by the year 2018 from 0.23 million in the year 2013. This can be backed up by the fact that the constantly growing fuel prices, subsidy schemes, and numerous other government support assist the growing deployment of electric vehicles throughout the globe. Moreover, the increasing purchasing power coupled with the rapid adoption of sustainable transportation methods has also led to an upsurge in demand for new energy cars, especially in developed economies.
The new energy car market has been segmented on the basis of type, end-user, and geography. By type, the classification of the market has been done on the basis of battery electric vehicles, plug-in hybrid electric vehicles, and others. On the basis of end-user, the segmentation of the new energy car market has been done into individual and enterprise. Furthermore, on the basis of geography, the distribution of the market has been done in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific.
BEVs to hold a decent market share
By type, the battery electric vehicles are anticipated to hold a healthy share in the market throughout the next five years. The primary factor supplementing the growth of this segment includes the presence of a large variety of cars offered by numerous manufacturers under this segment. Also, the growing focus on the adoption of zero-emission vehicles coupled with the growing government focus on the deployment of electric vehicles is some of the additional factors bolstering the growth of this segment throughout the next five years. The plug-in hybrid vehicle segment is expected to witness notable growth during the forecast period. Plug-in hybrid electric vehicles are those electric vehicles that use batteries for powering up the electric motor and also use an alternative fuel such as gasoline or diesel to power the other propulsion source, such as an internal combustion engine. These vehicles can run on electricity, and fuel also offers a higher fuel economy than conventional vehicles. The market is poised to grow because of the increasing penetration of PHEVs in various countries. The entry of new players in this segment is also a key factor supplementing the growth over the forecast period.
Enterprise segment to witness considerable growth
By end-user, the individual segment is expected to hold a substantial share in the market. The major factors supporting the share and growth of this segment include the growing purchasing power of the people, especially in developing economies, along with the growing awareness among the users towards the adoption of low-emission vehicles. Also, the benefits of subsidies and low running costs are some of the additional factors which have led to an upsurge in demand for new energy cars for individual usage.
However, the enterprise segment is anticipated to show considerable growth during the next five years. The booming penetration of EVs by ride-sharing companies has further led to a promising growth of this segment during the next five years. For example, in 2019, the Indian Government announced its plan to deploy around 40% of electric feet for taxi providers throughout the country. Similarly, the companies are also looking forward to increased funding primarily for the adoption of the electric fleet also shows the growth potential of this segment. For example, in March 2019, Ola announced its spin-off electric business unit as a spate unit and also received funding from Tiger Global and Matrix India worth US$56 million.
APAC to show promising growth
Geographically, North America and Europe are anticipated to hold noteworthy market shares throughout the next five years. The presence of a well-established infrastructure and strict pollution policies are some of the key factors supplementing the share of the North American region in the new energy cars market throughout the forecast period. However, the market in the Asia Pacific region is expected to show robust growth during the forecast period on account of increased government spending on the promotion of sales of electric vehicles in countries like India, China, and South Korea, among others.
The automotive industry has reported significant advancements in the development of environmentally friendly technology.
According to a news statement by Toyota dated May 17, 2022, Air Liquide, CaetanoBus, and Toyota Motor Europe signed a Memorandum of Understanding with the purpose of developing integrated hydrogen solutions. The three companies will pool their efforts to manage the whole hydrogen mobility value chain, from sustainable or low-carbon hydrogen production through distribution and refuelling systems, as well as vehicle deployment. Buses, light commercial vehicles, and automobiles will be the primary emphasis, with the objective of boosting the heavy-duty truck category.
According to a press release issued by the UK government in December 2021, subsidies of up to £1,500 (about US$1,956) have been offered for electric cars priced under £32,000 (approximately US$41,728). The UK government has allocated £3.5 billion (about US$4.56 billion) to help the transition to electric vehicles.
Squad Mobility released the SQUAD Solar City Vehicle as mentioned in a press release dated 16th May 2022. It features a two-seater tiny city car that runs on solar energy. The SQUAD will be ready in 2023 and can be pre-ordered for €6250 (US$6717 approx) (ex VAT). SQUAD is a Dutch start-up established in 2019 that aims to make solar-powered transportation more accessible to the general public.
The COVID-19 pandemic had a significant influence on most organizations. The world economy has been on a downward trajectory as a result of the shutdown of most significant sectors. The outbreak had a severe impact on the automobile industry as well. Sales and manufacture of new automobiles fell as a result of the implementation of lockdown measures and the halting of the manufacturing industry. The market was further hampered by a scarcity of workers and raw supplies. Industries worldwide reported a shortage of semiconductors due to the lack of production. Even after most lockdown rules were relaxed, there had been a delay in supply and manufacturing lines, resulting in a significant slowdown. Due to the lack of vehicles, customers were confronted with extended queues.
However, the market has been recovering at a rapid pace, owing to the advancements in the automobile industry, and the growing demand for renewable energy sources. Countries have announced various incentives and schemes to help in the fulfilment of environmental standards and decrease pollution. Hence, the market is anticipated to grow substantially in the forecasted period.
Prominent/major key market players in the new energy car market include Tesla Inc., BMW, BYD Company Ltd., General Motors Company, Daimler AG, and Suzuki, among others. The players in the new energy car market are implementing various growth strategies to gain a competitive advantage over their competitors in this market. Major market players in the market have been covered along with their relative competitive position and strategies, and the report also mentions recent deals and investments of different market players over the last few years. The company profiles section details the business overview, financial performance (public companies) for the past few years, key products and services being offered, along with the recent deals and investments of these important players in the new energy car market.
|Market size value in 2020||US$155.172 billion|
|Market size value in 2027||US$951.312 billion|
|Growth Rate||CAGR of 29.57% from 2020 to 2027|
|Forecast Unit (Value)||USD Billion|
|Segments covered||Type, End-User, And Geography|
|Regions covered||North America, South America, Europe, Middle East and Africa, Asia Pacific|
|Companies covered||BYD Company Ltd, Tesla, Inc., BAIC Group, General Motors Company, Honda Motor Company, Ltd., Ford Motor Company, Hyundai Motor Company, Volkswagen AG, Mercedes-Benz Group AG, TATA Motors Limited, Suzuki Motor Corporation, Bayerische Motoren Werke AG, The Volvo Group, Groupe Renault, The Nissan Motor Company, Ltd|
|Customization scope||Free report customization with purchase|
Frequently Asked Questions (FAQs)
Q1. What will be the new energy car market size by 2027?
A1. The global new energy car market is estimated to reach a market size of US$951.312 billion by 2027.
Q2. What factors are anticipated to drive the new energy car market growth?
A2. The new energy cars market is projected to witness rapid growth primarily due to the growing government focus on the adoption and promotion of vehicles with greener energy technologies.
Q3. What are the growth prospects for the new energy car market?
A3. The new energy car market is estimated to grow at a CAGR of 29.57% over the forecast period.
Q4. What is the size of the global new energy car market?
A4. New Energy Car Market was valued at US$155.172 billion in 2020.
Q5. Which region holds the largest market share in the new energy car market?
A5. Geographically, North America and Europe are anticipated to hold noteworthy shares in the new energy car market owing to the presence of a well-established infrastructure and strict pollution policies.
BYD Company Ltd
BAIC Automotive Group Co., Ltd.
General Motors Company
Honda Motor Company, Ltd.
Ford Motor Company
Hyundai Motor Company
Mercedes-Benz Group AG
TATA Motors Limited
Suzuki Motor Corporation
Bayerische Motoren Werke AG
The Volvo Group
The Nissan Motor Company, Ltd
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