×
In fact, the first electric car was built way back in 1884 by Thomas Parker, relying on high-capacity rechargeable batteries. What held back earlier iterations of electric vehicles was the high cost, low top-speed, and limited range of the vehicles. These issues have been a persistent thorn in the side of the widespread adoption of electric vehicles and only recently have EVs been practically and economically viable on a large scale.
Costs are now dropping rapidly and a combination of government schemes, tax incentives, fuel efficiency and the lower cost of electricity means that the lifetime cost of an EV may well be lower than that of petrol and diesel cars. Electric vehicle charging is becoming easier with the growing number of charging stations around the world, and the ease of charging your car at home cannot be understated. As electric vehicle battery technology develops so too does the range that EVs can cover which in the early days of the EV market boom was a key sticking point discouraging potential adopters.
Of course, one of the biggest benefits of the proliferation of EVs is their impact on the environment. Fully electric cars produce zero tailpipe emissions, and plug-in hybrid electric vehicles produce no tailpipe emissions when driven in electric mode. Its for this reason why so many governments are giving consumers so many incentives to purchase EVs which has helped spurn the rapid growth of the industry. It is certainly a good time to look at making the switch to electric, with some of the best electric vehicles being released in the past couple of years and due to experience the benefits of economies of scale.
All of these reasons have conjured the perfect storm for the EV market to experience a period of substantial growth. The global market for electric vehicles in 2019 was valued at $162.34 billion. This is projected to reach $802.81 billion by 2027, with a compound annual growth rate of 22.6%.
The Asia-Pacific region contributed the most to the global market, accounting for $84.84 billion in 2019 or a 52.4% share. This market is projected to grow to $357.81 billion by 2027, at a CAGR of 20.1%. North America is projected to grow to $194.20 billion by 2027, at a noteworthy CAGR of 27.5%. Europe accounted for a 22.4% share of the global market in 2019, at $36.26 billion. Europe are also expected to undergo a significant CAGR of 25.3.
Sales of electric cars peaked at 2.1 million units globally in 2019. This surpassed the previous record holding year of 2018 and bought the total stock of electric cars to 7.2 million. 2019 saw electric cars account for about 1% of global car stock and 2.6% of global car sales, which was a 40% increase on the previous year.
Scandinavia are leading the pack in terms of EV adoption, with Norway, Iceland and Sweden having plug-in electric vehicles accounting for 74.8%, 45% and 32.2% respectively of all registered vehicles in 2020. Behind them lie Netherlands, Finland, Denmark, and Switzerland at 18.1%, 16.4%, 14.3% and 13.5%. Its no coincidence that these countries’ governments were behind some of the most stringent policies to incentivize the adoption of electric vehicles. Somewhat surprisingly, the home of the largest contributor to the global EV market – China – only had a 6.2% share of plug-in electric vehicles in new passenger cars in 2020. It certainly goes to show the room for growth the market has.
One of the largest questions looming over the EV supply chain is the production of the cells that make up the batteries. Despite the ever-increasing price of Tesla stocks, this is a problem which is affecting all EV manufacturers. Indeed, in October Elon Musk said that this issue is preventing the company from increasing the production of its semi. Most companies supplying battery technologies are having difficulty scaling a supply chain that was intended to supply the consumer electronics industry and instead supply the transportation industry. The parts and minerals needed to produce components of EVs are scarce. The primary materials in cells are lithium, nickel, cobalt, manganese, aluminum, copper and graphite. The former three are providing the biggest headaches for manufacturers given their scarcity.
As the transition to electric vehicles intensifies, the core differences between EVs and ICE vehicles reveal which supplier subsectors are most at risk. In mechanical terms EVs are more simplistic than typical combustion engines, with some motors only having 3 moving parts compared to upwards of 100 moving parts for combustion engines. Powertrain and electronic components are expected to rise in demand significantly by 2025, to a combined 52% from 44% in 2015. The chassis, body, and interior components are expected to fall in demand as a result of the adoption of EVs as well as advancements in driver-assist technology. In EVs today the lithium-ion battery pack can account for 50% of the value alone.
Charging infrastructure and battery storage are industries which will be required to grow out of necessity as the EV market increases. As it stands, governments are trying to increase the amount of publicly available charging stations and incentivizing private charging stations. Batteries, fuel cells (FCs), and ultracapacitors (UCs) store the electricity in EVs and will surely see a number of innovations and new market players due to its essential role in the EV supply chain.
The respective growth of related industries and markets will be dependant on the type of EV technology which becomes the most prevalent. As it stands there are a number of different EVs and technologies:
Battery EVs (BEVs)
A battery electric vehicle is powered by a battery and single or dual electric motors. These EVs do not use any fossil fuels and must be plugged into a charger to re-fuel.
Plug-in hybrid EVs (PHEVs)
A plug-in hybrid vehicle (PHEV) runs primarily on batteries recharged by plugging into the power grid. It also has a gas-powered internal combustion engine which can charge the battery or be used as fuel if the battery runs out of energy.
Hybrid EVs (HEVs)
Championed by the Toyota Prius 15 years ago, HEVs utilize two drive systems that run at the same time: a gas-powered engine and fuel tank, along with an electric motor and a battery.
Fuel-cell EVs (FCEVs)
A fuel-cell electric vehicle uses on-board fuel cells to generate electricity which powers an electric motor. A fuel-cell vehicle takes just a few minutes to refuel, emits only water in its exhaust and has a range of about 600km.
Lithium-Ion batteries are the most commonly used batteries in electric vehicles although battery technology is constantly evolving at a fast rate. For example, QuantumScape’s recent battery promises to use the industry-standard mixed-metal cathode, although the company has developed a unique solid ceramic separator. Being manufactured without the anode and electrolyte makes it more compact, more energy-dense and safer to operate according to the company.
You can expect more major automotive manufacturers to look to increase their market share in the coming years. As it stands the largest EV manufacturers are:
| Tesla Tesla is the largest global manufacturer as of the first half of 2020. It contributes to 28% of the market share with 178,050 units sold. |
Renault–Nissan–Mitsubishi Alliance Renault/Nissan is the second largest global manufacturer as of the first half of 2020. It contributes to 10% of the market share with 65,521 units sold. |
| Volkswagen Volkswagen is the third largest global manufacturer as of the first half of 2020. It contributes to 10% of the market share with 64,542 units sold. |
BYD BYD sold 46,554 units within the first half of 2020 with 7% of the market share. |
Charging is a core component of the EV market and is another industry which is set to experience substantial growth. The 5 largest companies in order at the moment are:
1. ChargePoint
2. ABB
3. BP
4. Shell
5. Webasto
• $1.1 billion is to be publicly invested in U.S by 2025 courtesy of Volkswagen subsidies.
• UK government announces £73.5 million EV investment … The UK government has announced £73.5 million ($91.3 million)
• China has 1.68m public and private charging piles as of 2020.
• Low-carbon electricity is available to consumers at comparatively low cost—20% lower than the average electricity price in the EU—while prices of conventional automotive fuels in Iceland are among the highest worldwide.
• The European Union’s new emissions standard—95 grams of carbon dioxide per kilometer for passenger cars—could also boost EV sales because it stipulates that 95 percent of the fleet must meet this standard in 2020 and 100 percent in 2021.
1
Clients notify us that they need leading insight for their project.
2
We engage and vet subject matter Experts matched to the request at speed.
3
Clients consult with their shortlisted Expert(s) and obtain forward knowledge to incorporate into their strategic plans.
4
Clients benefit from more refined analysis and practical recommendations to achieve a quantifiable business impact.