Government mandates and infrastructure investments to fuel EV growth globally

The electric vehicle (EV) sector registered exponential growth during the last decade due to depleting fossil fuel reserves and growing awareness about the impact of global warming. As EVs are a viable option to replace internal combustion engine (ICE) vehicles, EV sales increased substantially in several countries despite the automotive industry facing supply chain constraints in 2020 due to the COVID-19 pandemic. Global EV sales reached 7.7 million units in 2022, up from 1.4 million units in 2018, and are anticipated to reach 51.6 million units in 2035, driven by government mandates and infrastructure investments, according to GlobalData, the data and analytics company.

GlobalData’s latest report, Electric Vehicles Market Report, Update 2023 – Global Market Outlook, Trends, and Key Country Analysis, shows that during 2022-35, the total EV market is expected to expand at a compound annual growth rate (CAGR) of 15.9%, whereas the passenger EV segment is expected to register a CAGR of 26.1%. The commercial EV segment is expected to record a CAGR of 15% during the same period. The sales of battery electric passenger cars are expected to reach 44 million units by 2035 from 7.3 million units in 2022. The sales of battery electric commercial vehicles were 0.4 million units in 2022 and are anticipated to reach 7.6 million units by 2035.

Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, comments: “The increasing prices of gasoline, growing EV infrastructure, including the number of charging stations, maintenance hubs and facilities related to electric vehicles, and growing concern about environmental pollution are the major reasons behind the increasing adoption of electric vehicles worldwide.”

China is the largest EV market in the world, with annual sales of battery electric vehicles (BEVs) of five million units in 2022. Being an early adopter of EVs, China has numerous local and international companies offering a range of EV models. The government’s focus on the promotion and adoption of EVs to reduce pollution is another important factor contributing to the growth of the EV market in China.

Saibasan adds: “The Asia-Pacific (APAC) region is leading the EV market in terms of annual sales globally, followed by Europe and the Americas. In 2022, APAC accounted for 69.3% of the sales, followed by Europe with 19% and the Americas with 10%. The presence of market leader China in the APAC region is the key factor for its major share. The region is anticipated to hold the major share of the market of 41.4%, followed by Europe with 31.6% and the Americas with 19.4% by 2035.”