The electric vehicles market has witnessed substantial growth due to the need for addressing future energy requirements. The need to achieve sustainable transportation plays a vital role in driving electric vehicles demand. The electric vehicles market is emerging as an integral part of the automotive industry and represents a pathway towards achieving energy efficiency along with reduced emission of pollutants and other greenhouse gasses. Growing environmental concerns coupled with favorable government initiatives are some of the key factors driving market growth. Rising energy cost and competition among emerging energy efficiency technologies is also expected to fuel market growth.
Google’s RechargeIT program and China-based BYD have invested heavily in green car technologies. Widespread adoption of EVs is expected to help reduce CO2 emissions from transportation and dependence on fossil fuels, which in turn is expected to impact the electric vehicles market favorably. Purchasing an electric vehicle remains a major decision for many consumers along with safety concerns regarding any electrical hazards and falls caused by stray power cords. High initial purchase cost, limited driving range and lack of vehicle-recharging infrastructure in public places is expected to hamper the electric vehicles market. For utilities, vehicle development presents challenges such as high cost of infrastructure and peak load impacts of uncontrolled charging, which may hinder EV market growth.
Development of technologically advanced batteries with higher efficiency and durability coupled with integration of advanced features or applications provide significant growth opportunities. Growing adoption is also expected to provide opportunities for consumers, auto manufacturers and utility providers. Smart grids enable smart charging by providing utilities with better control over all aspects of operations, from generation and distribution to metering and billing. The market provides avenues for utilities that prevent problems on the grid through increased flexibility. For example, EV charging can be leveraged by building a grid that is adaptable to varying conditions, with demand-side (price) management and vehicle-to-grid discharge.
The electric vehicles market is broadly classified into Battery Electric Vehicles (BEV), Plug-in Electric Vehicles (PEV) and Hybrid Electric Vehicles (HEV). Penetration of PEVs across the light-duty segment is expected to favorably impact the PEV market growth. The HEV market is expected to witness growth as manufacturers emphasize on developing vehicles in compliance with several regulations to decrease vehicles CO2 emission and consumers seek to lower fuel expenditure.
The U.S. is expected to dominate the electric vehicles market, which can be attributed to favorable government initiatives and incentives. Federal incentives include availability of tax credit for purchase of new qualified plug-in electric drive motor vehicle, reduced license fees, etc. In the state of Florida, EVs are exempted from most insurance surcharges and granted access to carpool lanes. Furthermore, governments in the UK, the U.S. and France are rolling out large-scale initiatives in order to provide these vehicles to government agencies, and build an EV charging network, thereby driving market growth in these regions. Owing to fewer oil subsidies and higher fuel prices, the European electric vehicles market is expected to witness growing demand over the forecast period. Asia Pacific is also expected to witness
Asia Pacific is also expected to witness substantial rise in demand on account of several programs and initiatives that are underway to promote awareness regarding the adoption of electric vehicles. These initiatives include subsidies for electric vehicle buyers, R&D investments, public awareness programs and tax incentives, which are currently successfully adopted in Japan and Korea. China is also expected to emerge as a considerable regional market due to favorable initiatives such as subsidies for EV.
The global electric vehicles market is dominated by key industry players including General Motors, Nissan, Tesla, and Toyota. Other companies include BYD, Daimler AG, Mitsubishi Motors Corporation, Renault S.A., Smith Electric Vehicles and Volkswagen. Key market players focus on developing commercial and strategic relationships with other industry participants. For instance, Tesla started to develop an electric powertrain for the Toyota RAV4 by entering into an agreement with Toyota.
Additionally, the EV market is characterized by intense competition as several new and established automobile manufacturers have already entered or announced their plans to enter the market. Besides the Nissan Leaf, Renault introduced the Renault Fluence, Ford launched Ford Focus, whereas Fiat launched the Fiat 500e as part of its EV offering. In 2014, Volkswagen plans to introduce its fully electric e-Golf.
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