The global electric car market recorded a 29.97% year-over-year growth rate in 2021, thanks to vendors implementing growth strategies like increasing production capacity, opening new plants, and partnering with fellow businesses, per the latest report by
But even with this growth, there are a few challenges standing in the way of this flourishing industry—namely affordability. As such, it’s estimated that market growth momentum will decelerate at a compound annual growth rate of 27.49% between 2020 and 2025.
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Key factors driving electric vehicle market growth
The increasing demand and sales of battery electric vehicles (BEVs) are the main factors leading to growth in the electric car market.
In 2021, global sales of plug-in hybrid vehicles (PHEVs) and BEVs increased significantly, particularly in the United States, Europe, and China. Over the last few years, China specifically has seen an increase in the number of BEV producers, thanks to the country's increased desire for new energy vehicles.
The presence of electric cars’ supporting infrastructure, government regulations, and subsidies and incentives for the usage of all-electric vehicles are only a few of the significant elements driving the growth of the all-electric vehicle market in China.
Meanwhile, regional sales in Europe were led by Norway, the Netherlands, Germany, Iceland, and Poland.
High ownership costs putting brakes on EV industry
The high cost of ownership of BEVs, on the other hand, will be a significant challenge for the electric car market during the same forecast period.
Improved socioeconomic conditions, enhanced electric vehicle infrastructure, increased localization of manufacturing, and government incentives and subsidies make BEVs substantially more affordable in developed automotive markets.
But this isn’t the case for many emerging auto markets. For most consumers in these areas, an entry-level BEV is more expensive than comparable gas-engine vehicles in the same price segment.
Because of the undeveloped local market and the scarcity of electric vehicle service parts, after-sales services such as component maintenance are also expensive. These factors will likely continue to stifle the expansion of the global electric vehicle industry.
With the inevitable growth of the electric car market, you may find yourself owning one in the near future. Though they do come with some higher costs, you can always save money by shopping for and comparing different
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