Wiktor Wise
Electric vehicles (EVs) are becoming increasingly popular, and with this surge in interest, several indices have been created to track the performance of companies involved in the EV business. These indices provide a detailed view of the EV market, highlighting potential future trends. For example, the McKinsey Electric Vehicle Index (EVI) focuses on battery-electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), exploring market demand and industry supply. The S&P Kensho Electric Vehicles Index, on the other hand, measures the performance of companies in the electric vehicle sector and its supporting ecosystems. Other indices like the STOXX Global Electric Vehicles & Driving Technology Index and the HERE-SBD Automotive EV Index also provide insights into the EV market, considering factors such as charging infrastructure and consumer insights. As the EV industry continues to grow, these indices will play a crucial role in understanding its development and challenges.
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What You'll Learn
Electric vehicle market share
Electric vehicle (EV) market share has seen tremendous growth in the past decade, with this trend expected to continue in the coming years. Europe and China are the two largest markets for electric vehicles, with Europe accounting for 25% of global electric car sales in 2023, and China dominating the market for electric buses in 2020 with over 90% of sales.
In 2023, the global electric car industry saw a 43% increase in sales from 2019, with Europe's EV sales increasing steadily in most countries. Norway, Sweden, and the Netherlands are the largest European markets, with 95%, 60%, and 30% of all cars sold being electric, respectively. France and the United Kingdom follow closely behind, with 25% of all car sales being electric. The United States, while not one of the top two markets, had cumulative sales of 4.74 million plug-in cars since 2010, with California as the largest regional market with 1.77 million plug-in cars sold by 2023.
China, on the other hand, has been a leader in the electric bus market, with a stock of over 500,000 buses in 2019, accounting for 98% of the global stock. However, in 2023, Chinese demand for electric buses dropped, possibly due to its already large electric bus stock and the end of purchase subsidies. Despite this, China remains a major exporter of electric buses to Latin America, North America, and Europe.
In terms of market penetration, Norway has the highest per capita in the world, with 86.2% of new car sales in 2021 being plug-in electric cars. The Netherlands boasts the highest density of EV charging stations in the world as of 2019.
The growth in EV sales can be attributed to various factors, including the implementation of stricter rules regarding CO2 emission standards and government incentives. For example, the mandated 100% reduction in CO2 emissions for new cars and vans by 2035 has likely contributed to the increase in EV sales in Europe. Additionally, price parity between electric and internal combustion engine (ICE) cars is becoming more achievable, with a significant drop in electric car prices since 2018. In China, it is estimated that 65% of electric cars sold in 2023 were cheaper than their ICE equivalents.
The S&P Kensho Electric Vehicles Index and the S&P U.S. & China Electric Vehicle Index are indices designed to measure the performance of companies in the electric vehicle sector. They take into account various factors, such as advancements in technology and materials, government incentives, and the development of supporting ecosystems.
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Electric vehicle companies
Electric vehicle (EV) companies are businesses that design, manufacture, and sell electric vehicles and related products. These companies are at the forefront of the transition to electric mobility, offering consumers a wide range of electric cars, trucks, SUVs, and more. The EV market is expected to reach over $786 billion in revenue in 2024, showcasing the significant growth and potential of this industry.
One of the leading EV manufacturers is Tesla, which has played a pivotal role in perfecting EV design and performance. Tesla offers a range of high-speed electric vehicles, including the popular Model S, Model 3, and Model X, as well as developing solar panels for homes and businesses. Another notable EV company is VinFast, which prioritizes premium craftsmanship and high-quality parts in its electric vehicles. VinFast's design blends sporty aesthetics with luxurious features, setting a new standard for electric car companies.
Rivian is an EV company known for its commitment to sustainability and animal welfare. Their vehicle lineup includes three SUVs and a pickup truck, all featuring interiors made from 100% animal-free materials and easily recyclable battery packs. Other established automakers, such as Fiat, Dodge, and Jeep, are also entering the EV market with models like the Fiat 500e, Dodge Charger Daytona (an electric muscle car), and the Jeep Wrangler and Gladiator SUV.
The EV market is constantly evolving, with advancements in technology and government incentives promoting clean, zero-emissions travel. Indices like the S&P Kensho Electric Vehicles Index and the S&P U.S. & China Electric Vehicle Index are designed to measure the performance of companies in the electric vehicle sector, providing insights into the trends and issues impacting this dynamic industry. As the EV market continues to grow and innovate, consumers can expect even more options for efficient, stylish, and eco-friendly transportation.
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Electric vehicle trends
Electric vehicle (EV) trends are an important indicator of the health and direction of the EV market. One notable trend is the increasing sales of electric vehicles, with China, Europe, and the United States representing around two-thirds of total car sales. In 2023, China saw 8.1 million new electric car registrations, a 35% increase from 2022. This growth in electric car sales was the main driver of the overall car market, which grew by 5% despite an 8% contraction in conventional internal combustion engine car sales.
Outside of the major EV markets, electric car sales are expected to surpass 1 million units in 2024, a more than 40% increase from 2023. This includes strong contributions from both local and Chinese carmakers in Southeast Asia, as well as anticipated growth in India. Across all regions outside the top three EV markets, electric car sales are projected to represent around 5% of total car sales in 2024, suggesting that global mass adoption may be approaching.
In terms of vehicle size, electric cars are following the trend of their conventional counterparts and getting bigger. In 2023, SUVs, pick-up trucks, and large models accounted for 65% of total ICE car sales worldwide, with even higher percentages in the United States (80%), China (60%), and Europe (50%). This trend is influenced by emissions regulations that have been more lenient for larger vehicles, as well as the higher margins they offer to carmakers.
Battery technology and vehicle design improvements have led to significant increases in the range of electric vehicles. Between 2015 and 2023, the sales-weighted average range of battery-electric cars grew by nearly 75%. While the range of small cars has remained relatively constant, averaging around 150 km in 2023, medium-sized cars and SUVs have seen substantial improvements, with ranges now reaching around 380 km. These advancements are encouraging for consumers considering electric cars for longer journeys.
Affordability is another critical factor influencing EV trends. While EVs are becoming cheaper to purchase, the deterioration of the public charging experience is impacting consumer consideration. Improving charging infrastructure and reducing costs will be key to driving mass adoption of electric vehicles.
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Electric vehicle sales
Electric vehicle (EV) sales have been growing globally, with the global electric car fleet rising to 40 million in 2023, a 35% increase from 2022. This growth is expected to continue, with sales predicted to reach 17 million by the end of 2024. China, Europe, and the United States are the largest markets for EVs, accounting for around 95% of all sales in 2023. In China, new electric car registrations reached 8.1 million in 2023, a 35% increase from 2022. Europe accounted for 25% of global electric car sales in 2023, with sales reaching almost 3.2 million. The United States, along with China and Europe, represents two-thirds of total car sales, and the EV transition in these markets has major repercussions on global trends.
Outside of these major EV markets, electric car sales are expected to surpass 1 million units in 2024, a 40% increase from 2023. This growth is driven by the success of both local and Chinese electric carmakers in Southeast Asia, as well as anticipated growth in India, despite uncertainties surrounding subsidies. Electric car sales outside of the three major markets are expected to represent around 5% of total car sales in 2024, indicating a potential tipping point towards global mass adoption.
The growth in EV sales is influenced by various factors, including consumer preferences for larger and longer-range vehicles, marketing trends favoring SUVs, and advancements in battery technology. Additionally, government policies and regulations related to emissions standards and fuel efficiency play a significant role in market development. The electrification of the heavy-duty sector, including electric LCVs and buses, is also gaining traction, contributing to the overall growth in EV sales.
To measure the performance of companies in the EV sector, indices such as the S&P Kensho Electric Vehicles Index and the S&P U.S. & China Electric Vehicle Index have been developed. These indices track the performance of companies involved in producing electric vehicles, associated subsystems, powertrains, energy storage systems, and charging infrastructure.
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Electric vehicle infrastructure
The development of EV infrastructure is essential to facilitate the widespread adoption of electric vehicles and to support the transition to a cleaner and more sustainable transportation system. Governments and organisations worldwide are taking steps to improve and expand EV infrastructure. For example, the U.S. Department of Transportation's (DOT) Federal Highway Administration (FHWA) has introduced the National Electric Vehicle Infrastructure (NEVI) Formula Program, which provides funding to states to deploy EV chargers and establish an interconnected network. This program aims to enhance data collection, access, and reliability, while also addressing concerns related to energy independence and the environmental impact of the transportation sector.
The NEVI Formula Program offers funding for up to 80% of eligible project costs, covering the acquisition, installation, and network connection of EV chargers. To ensure accessibility and interoperability, the program mandates that EV chargers supported by the program must be non-proprietary, accept open-access payment methods, and be publicly available or accessible to authorised commercial motor vehicle operators from multiple companies. These chargers are strategically located along designated FHWA Alternative Fuel Corridors (AFCs), with the option to propose alternative locations if all AFCs in a state have been fully utilised.
In addition to the NEVI Formula Program, other initiatives are underway to enhance EV infrastructure. For instance, the provisional agreement between the European Council and Parliament outlines a plan to begin deploying infrastructure for electric heavy-duty vehicles from 2025. This includes investments from heavy-duty vehicle manufacturing groups like Traton, Volvo, and Daimler, who have collectively established Milence, a joint venture with the aim of deploying over 1,700 fast and ultra-fast charging points across Europe.
Furthermore, alternative solutions such as stationary storage integration, local renewable capacity, and smart charging are being explored to reduce infrastructure and electricity procurement costs. Electric road systems, which enable dynamic charging through inductive coils, conductive connections, or catenary (overhead) lines, offer promising avenues for reducing system-level cost uncertainties associated with zero-emission long-haul trucks. However, electric road systems also present challenges related to standardisation, compatibility, and infrastructure ownership, along with higher development costs compared to regular charging stations.
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Frequently asked questions
An Electric Vehicle Index (EVI) is a tool that provides an overview of the electric vehicle (EV) market, highlighting its current state and potential future trends.
An EVI analyses the market demand and industry supply of electric vehicles. It also takes into account the number of charging points, vehicle registrations, geography, and road network length.
The purpose of an EVI is to provide insights and data on the EV market to help organisations make informed decisions and strategies.
Organisations in the automotive, mobility, and energy sectors use EVI to gain a detailed view of the EV market and to identify potential future trends.
Yes, there are different EVIs offered by different companies and organisations. For example, McKinsey & Company has its own EVI, while S&P offers the S&P Kensho Electric Vehicles Index and the S&P U.S. & China Electric Vehicle Index. Additionally, HERE and SBD offer an EV Index that provides an in-depth analysis of EV infrastructure in the US and Europe. There is also the STOXX Global Electric Vehicles & Driving Technology Index, which is comprised of companies from selected countries that are exposed to the electric vehicles theme.
