A Comprehensive Insight into the Four-Wheeler Electric Passenger Car Market

The year 2019 witnessed the sale of 2.1 million four-wheeler electric passenger cars — a record that holds to date. On the global front, this was a 40% year-on increase, reflective of the fact that a shift from conventional vehicles to their electric counterparts was now on the cards.

No doubt, the COVID-19 pandemic slowed down the growth; however, that certainly doesn’t entail prolonged market sluggishness. After all, the zero-emission policies would be even more profound in the coming days, and governments would be pushing towards renewable fuel economy standards. 

To that end, let’s explore the four-wheeler electric passenger car market and identify investment opportunities that might present themselves. 

What is the Market Size?

On a global basis, the four-wheeler electric passenger car market constituted a value of $162.34 billion in 2019; however, it is estimated that the figure would rise to 802.81 billion in the next six years.

As it stands, the market is expected to grow at a CAGR of 23% between the forecast period. Some estimates about the market growth project the CAGR to be in excess of 27% until 2026, which does make sense considering the expectation of exponential market growth in the New Normal.

Due to a number of factors such as stricter emissions norms, rising government subsidies, and emission standards that mandate an average fuel consumption of less than a specific amount (may vary) g/km – more vehicles are likely to be sold in APAC and North America as compared to the rest of the world. That said, Asia Pacific is set to grow at a CAGR of 20.1% between 2021 and 2027, Europe with 25.3%, and North America with 27.5%.

In fact, every populous country, including India, has been promoting the adoption of electric vehicles. Consider this; GOI’s initiative FAME [Faster Adoption & Manufacturing of (Hybrid &) Electric Vehicles] is one of the many examples of government policies and initiatives targeted at reducing CO2 emissions and bringing about a change in the environment through the promotion of four-wheeler electric passenger cars. 

Not to forget that there are a few challenges that need to be overcome for interminable market growth. One of the most important issues is the lack of charging infrastructure. Another challenge to the growth of the four-wheeler electric passenger car market is its high initial cost. Nevertheless, with the increasing number of automakers striving to develop an eco-friendly ecosystem, the market’s growth is imminent.

What are the Market Drivers?

1. Reduced Electric Vehicle Battery Cost

Battery cost has gone down, which is good news for the four-wheeler electric passenger car market. Having said that, it would be interesting to note that the effect of the aggressive competition is still being felt in the four-wheeler electric passenger car market. Lower battery costs for OEMs, their suppliers, batteries, and/or components will see an increase in sales. 

2. Technological Development

The four-wheeler electric passenger car market has come a long way in terms of technology, design, etc. In addition to this, it is expected to move towards plug-in hybrid/electric vehicles in the coming years. This will see a rise in demand for four-wheeler electric passenger cars across all continents and regions.

3. Government Initiatives & Policies

Government incentives have increased emission standards and reduced fuel consumption. This is with a view to reducing global emissions and carbon footprint. These initiatives are in line with the governments’ efforts to reduce greenhouse gas emissions and energy consumption. 

4. Economic Development & Growth in APAC and Europe 

It is predicted that economic growth in the Asia Pacific and Europe will help propel the number of units sold per year in these regions, and rightly so. 

Why Invest in the Four-Wheeler Electric Passenger Car Market?

Battery innovation holds immense potential for four-wheeler electric passenger car OEMs. However, despite that, there are still challenges such as lack of charging infrastructure, higher initial costs, etc., that need to be overcome before full-on growth can be achieved. But in due course, it is likely that the market will consist of more than a hundred manufacturers. The market is also impacted by the government’s encouragement to adopt cleaner vehicle technologies as it promotes a change in the environment. 

To that end, the global four-wheeler electric passenger car market is expected to develop further with a focus on new product innovations and disruptive technology. Fundamental product enhancements will be the key to exponential growth. The blockchain trading economy will remove many barriers in due course. This includes the digitization of vehicles and structures for fast transaction and sales approval. 

Order Four-Wheeler Electric Passenger Car Market Report from EIRI

From sub-segments analysis to global value chain analysis and regional market dynamics to key trends, the report covers every aspect of the four-wheeler electric passenger car market.