THE IMPACT OF BATTERY TECHNOLOGY ON ELECTRIC CAR MARKET GROWTH

The Impact of Battery Technology on Electric Car Market Growth

The Impact of Battery Technology on Electric Car Market Growth

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Market Overview

In 2024, the global electric car industry is estimated to attain 7.0 million units, with an impressive CAGR of 34.2% projected to advance to 40.7 million units by the end of the decade. Key automakers like Ford, General Motors, and BMW are mainly concentrating on electric vehicles because of increasing consumer interest in decreasing carbon footprints, supportive government guidelines, and improvements in battery tech. Innovations in battery chemistry is improving energy storage, making EVs more competitive with conventional vehicles.

As emissions from internal combustion engine (ICE) vehicles become a growing concern, regulatory agencies are implementing stricter fuel efficiency standards and promoting EV adoption through subsidies and incentives. For battery electric vehicles (BEVs) to be cost-competitive, battery pack costs need to fall below USD 120/kWh; they have already decreased by over 77% from 2010 to 2016 to USD 227/kWh, with further reductions anticipated.

A key trend in the industry is the consolidation and formation of joint ventures among major players to enhance market presence. For instance, foreign companies are partnering with local firms in China, with examples including BYD's collaboration with Daimler AG and Volkswagen's joint efforts with SAIC Motor.

Additionally, global initiatives to reduce greenhouse gas emissions are prompting a shift away from fossil fuels. Many countries are imposing higher taxes on traditional fuel cars while providing financial incentives for electric vehicles, further accelerating the transition to cleaner transportation options.

Key Insights


  • Battery Electric Vehicles (BEVs) hold the largest market share due to advanced model launches.

  • Increased investments in R&D for cutting-edge battery solutions are boosting BEV market growth.

  • Tesla announced in October 2021 that all standard-range models would use lithium-iron phosphate (LFP) batteries.

  • Government subsidies favor BEVs over Plug-in Hybrid Electric Vehicles (PHEVs) in many regions.

  • In France, electric cars emitting up to 20 g CO2/km receive more tax exemptions than those with higher emissions.

  • In the U.S., BEVs benefit from greater Zero Emission Vehicle (ZEV) credits compared to PHEVs.

  • The economy vehicle segment is expected to account for 45% of market revenue in 2024.

  • Lower prices of economy vehicles contribute to their popularity, especially in markets like China.

  • The Asia-Pacific (APAC) region is projected to hold around 50% market share in 2024.

  • China is the leading market in APAC, driven by high-volume electric vehicle manufacturing and government support.

  • Since 2009, the Chinese government has provided substantial subsidies, totaling over USD 47 billion.

  • The government aims to implement Phase IV standards to reduce average fuel consumption in fleets.

  • Emission rules require manufacturers of over 30,000 vehicles annually to obtain carbon credit points.

  • China plans to ban the sale of conventional automobiles by 2030.

  • BEV sales in China are expected to grow significantly due to favorable policies and mandates.

  • Affordable, small cars, which are predominantly BEVs, are preferred by Chinese consumers.

  • The European market is projected to grow at the highest CAGR of around 35.0% during the forecast period.

  • Increased EV adoption in Norway, Germany, and the U.K. is driving European market growth.

  • The U.S. market is expected to grow at a CAGR of 34.5% due to enhanced government support for EVs.

  • Toyota announced plans in July 2023 to boost EV technology development in China to reduce manufacturing costs.


Source: P&S Intelligence

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