The electric vehicle market is growing rapidly. Governments, corporations and consumers are all pushing for a cleaner, more sustainable future, and the uptake of electric vehicles (EVs) is one way that can be achieved. The demand for EVs is increasing in response to government policies, such as the new ZERO VENDENDUM legislation in Norway, tax incentives in Japan, and declining costs of batteries. The growing awareness of environmental concerns has also led to new initiatives to help reduce carbon emissions from transportation. To understand the present growth trend and future potential of this market segment, we have identified the major trends that will transform the industry landscape over the next few years:
Consumers are demanding more autonomy and convenience
People are now increasingly aware that they have the power to change their driving habits and reduce the amount of pollution their vehicles produce. The first and most obvious way to do this is by switching to an EV, which often produces no tailpipe emissions. Plus, with the increased range of EVs available (over 600km in the case of the Tesla Model S), drivers are less restricted when it comes to where they can travel. The growing popularity of ride-hailing services is also spurring people to switch to EVs. If more people choose to ditch their personal vehicles in favor of a shared ride, it could contribute to a decrease in vehicle sales and EV adoption could see a significant surge. As we are seeing, the ride-hailing sector is growing rapidly, and it may be the case that people are now choosing EVs based on convenience— they are charged at their destination and are ready to go when they get in the car.
The price of batteries will continue to drop
The cost of batteries is one of the main challenges that has kept the EV market from growing more rapidly. However, analysts predict that the price of batteries will continue to drop over the next few years, which will make EVs more attractive to consumers. The price of batteries has been declining for years, thanks to government research and investment in the sector. China, for example, has been busy building the largest battery factory in the world, which will produce enough cells to power 1.5 million EVs. Russia, too, has announced plans to invest $50 billion in batteries and other components of EVs, and the EU has earmarked $90 billion for new battery production capacity. The price of batteries is also expected to fall as more consumers start using second-life batteries to power their EVs. This will increase the supply of used EV batteries and could further lower the price of new batteries.
Electronic-based mobility services will grow
In recent years, we have seen the rise of companies such as Uber, Lyft and Didi, which have connected drivers and passengers via an app-based platform. But now, these services are increasingly looking to expand their offerings to include EVs. Uber, for example, has been testing a fleet of EVs in Pittsburgh. If Uber succeeds with this test, it could introduce EVs to many more cities. Lyft has also been testing EV models in various cities, and it appears to be gearing up for a major EV launch in the near future. If these companies manage to convince more people to switch to EVs, it could lead to a significant increase in EV sales. Consumers may be attracted to the convenience of sharing rides in EVs, and the companies themselves may see lower costs from lower fuel prices.
Battery capacity for EVs will increase
The energy density of batteries is another key factor that will determine the success of EVs. The higher the energy density of the battery, the greater the distance the car will be able to travel on a single charge. Some manufacturers have already started to increase the energy density of their batteries. For example, Toyota and Panasonic have formed a joint venture to build a new facility that will produce EV batteries with greater energy density. If these companies manage to increase the energy density of their batteries, they will produce EVs that can travel longer distances on a single charge.
The future of the EV market is bright. If the 5 trends we have identified come to fruition, we could see a significant rise in the uptake of EVs. Policymakers, manufacturers and consumers all have a role to play in helping this market grow. Policymakers can help boost EV sales by introducing more incentives for consumers to buy EVs and making it easier for manufacturers to sell EVs. Consumers can help bring about change by choosing to buy an EV whenever possible. Now is the time to invest in the EV market, as the industry is still in its early stages. It is expected that the market will continue to grow over the next few years, and investors who get in now could see significant returns.