Electric Passenger Cars Market size was USD 384.6 billion in 2024 and is estimated to reach USD 16.45 trillion by the end of 2037, expanding at a CAGR of 35.5% during the forecast period, i.e., 2025-2037. In 2025, the industry size of electric passenger cars is evaluated at USD 513.4 billion.
The strict regulations on carbon emissions and favorable government policies on eco-friendly vehicle adoption are expected to boost the sales of electric passenger cars in the coming years. The Paris Agreement, for instance, focuses on limiting greenhouse gas emissions by 43% by 2030. As electric vehicles effectively help to mitigate carbon emissions, manufacturers are continuously focused on advancing their EV performance and design.
As per the International Energy Agency (IEA), if EV sales increase substantially in the coming years, the CO2 emission by cars can be reduced effectively aligning with the Net Zero Emissions by 2050 initiative. Furthermore, it is estimated that Europe, China, and the U.S. are set to experience high sales of electric vehicles including battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV), and fuel cell electric vehicles in the foreseeable future.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
35.5% |
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Base Year Market Size (2024) |
USD 384.6 billion |
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Forecast Year Market Size (2037) |
USD 16.45 trillion |
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Regional Scope |
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Product (Battery Electric Vehicles (BEV), Plug-In Hybrid Electric Vehicles (PHEV))
Battery electric vehicles (BEV) segment is projected to account for electric passenger cars market share of more than 65.5% by the end of 2037. The increasing subsidies on eco-friendly car use, fuel efficiency, and low maintenance requirements are some of the key factors driving the sales of battery electric vehicles. The cost of ownership for BEVs is comparatively lower than for gasoline-based counterparts, as fuel charges have a drastic influence due to several factors such as environmental, geopolitical, or supply chain disruption. For instance, as per the IEA analysis, in Germany, the cumulative costs of medium-sized battery electric car ownership after 5 years were 10% to 20% cheaper than the ICE equivalent.
In December 2020, Toyota Motor Corporation announced the launch of a C+pod ultra-compact battery electric vehicle, especially for local governments, corporate users, and organizations that are keen on exploring new options for BEVs.
Vehicle Type (Hatchbacks, Sedan, Compact SUVs, SUVs)
The compact SUVs segment is expected to account for a significant electric passenger cars market share through 2037 owing to its powerful motor technology. The rapidly increasing population, limited parking spaces, and poor road infrastructure in some regions are boosting the demand for compact electric SUVs. Considering the above factors, several manufacturers are targeting high-potential economies to launch electric passenger cars such as compact SUVs. For instance, in March 2024, BYD Auto Co., Ltd launched the BYD Dolphin Mini compact electric care model in Brazil and Mexico. The compact hatchback design effectively aligns with sustainability trends and is suitable and comfortable for city living.
Our in-depth analysis of the global market includes the following segments:
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Product
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Vehicle Type |
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Europe Market Forecast
Europe electric passenger cars market is set to account for revenue share of around 51.2% by 2037. The strict regulation on carbon emissions and advancing charging infrastructure in the region are mainly fuelling the sales of electric passenger cars. For instance, the IEA estimates that electric car ownership in Europe increased by 20% in 2023.
Norway leads the sales of electric passenger cars in Europe and accounted for a share of 93% in 2023. The reintroduction of electric vehicle sales taxes, supportive incentives, and the Net Zero Emission goal are some key factors contributing to Norway market growth.
In Germany, the low cost of medium-sized EVs compared to ICE counterparts is majorly influencing the market growth. The price of best-selling Dacia Spring, MG, and Renault Megane ranges from USD 23883 to USD 37996 lower than 3 front runner ICEs above 45,000.
Asia Pacific Market Statistics
Asia Pacific electric passenger cars market is expected to observe over 39.5% growth between 2025 and 2037. The strong presence of EV manufacturers, an increasing number of vehicle ownerships, and supportive policies on EV use are pushing the sales of electric passenger cars in the region. India and China are high-earning marketplaces owing to the rapid public investments in infrastructure development including, EV charging stations and continuous development of innovative models due to low labor costs. The existence of the world’s top automobile manufacturers such as Toyota Motor Corporation and Hyundai Motor Company is significantly influencing the sales of electric passenger cars in Japan and South Korea.
China captured around 60% of the new electric vehicle registrations in 2023 due to the country’s new energy vehicle industry development plan (2021 to 2035). The continuous innovations in EV technology and the expansion of public EV charging stations are further contributing to the China electric passenger cars market growth. For instance, according to an IEA report, in 2021 there were around 470 thousand publicly accessible fast chargers in the country.
In India, the cost-effective availability of labor and manufacturing base cuts the operational costs by 10% to 25% compared to Europe and Latin America. The rising environmental concerns and supportive government policies are promoting the adoption of electric passenger cars. For instance, the Government of India allotted around a USD 60.18 billion budget under the Electric Mobility Promotion Scheme to drive green mobility and expand electric vehicle production.
Key players in the electric passenger cars industry are employing several market strategies such as technological advancements, strategic collaborations, mergers & acquisitions, and regional expansions to earn high profits. Strategic partnerships with other players and tech firms are helping them to develop an innovative electric car model that can appeal to a larger consumer base. They are also entering emerging economies to tap new growth opportunities and maximize their market presence. Some of the key players include:
Author Credits: Saima Khursheed
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