The plug-in electric vehicle market is predicted to grow from USD 698.63 billion in 2025 to USD 1,189.59 billion in 2035 at a CAGR of 5.5%. The hybrid electric vehicle market (HEV+MHEV) is set to grow from USD 446.87 billion in 2025 to USD 667.75 billion in 2035 at a CAGR of 4.1%. EVs are vehicles powered fully or partially by electric motors using energy stored in rechargeable batteries, offering lower emissions and higher energy efficiency compared with internal combustion engine vehicles. Market growth is driven by rising demand in electric passenger cars and commercial vehicles, amid supportive government policies, stricter emission regulations, and significant investments in charging infrastructure and advanced battery technologies.
The battery electric vehicle segment is estimated to witness the largest growth during the forecast period
The BEV segment is estimated to be the major growth driver in the electric vehicle market, securing the largest market share during the forecast period. Advances in battery technology are enabling more energy-dense and cost-effective solutions, supported by a growing range of models that boost consumer adoption. According to the International Energy Agency (IEA), global BEV sales rose about 35% year over year in the first quarter of 2025, with total electric car sales expected to exceed 20 million units in 2025. Leading manufacturers such as Tesla, BYD, and Geely are expanding their BEV portfolios to meet rising demand. Tesla’s Model 3 Performance, launched in April 2024, offers a top speed of 163 mph and rear-wheel drive, appealing to performance-oriented buyers. Similarly, BYD’s Sealion 05 EV, introduced in March 2025, provides advanced features and competitive pricing. These developments underscore the BEV segment’s strong position as the preferred choice for consumers seeking sustainable and high-performance vehicles.
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The passenger cars segment is estimated to account for the largest share in the electric vehicle market during the forecast period
The passenger car segment is expected to hold the largest share in the electric vehicle market during the forecast period, driven by ongoing technological advancements, supportive regulatory frameworks, and growing consumer demand for sustainable mobility. OEMs are heavily investing in improving battery efficiency, expanding charging infrastructure, and enhancing overall vehicle performance. Tesla’s Model 3 and Model Y remain iconic, setting high standards for range, affordability, and market reach, with combined global deliveries reaching approximately 323,800 units in Q1 2025 and 373,700 units in Q2 2025, despite a year-over-year decline due to increased competition and supply chain challenges. Other popular models contributing to this trend include Volkswagen ID.4, Ford Mustang Mach-E, and BYD Song and Qin Plus, reflecting the diversifying consumer options globally. Leading manufacturers such as BYD, Tesla, Volkswagen, Geely, Stellantis, BMW, Nissan, Toyota, Honda, Hyundai, GWM, Mercedes-Benz, Volvo, and GM are actively expanding EV portfolios and ramping production capacities. BMW announced in late 2023 that its Munich plant will fully transition to electric vehicle production by 2027, becoming the first legacy plant in its network to do so. General Motors continues converting existing factories to EV-centric production despite recent challenges and moderating market demand in the US. Meanwhile, Europe maintains stringent CO2 emission targets aiming for a 55% reduction by 2030 and zero emissions by 2035, fostering enhanced EV adoption. In the US, growth has slowed notably amid policy uncertainty and rollbacks under the current administration, with significant cuts to incentives and federal support for EVs, impacting fleet electrification momentum and overall market expansion. In 2024, the Tesla Model Y was the best-selling battery electric vehicle globally, reaffirming passenger cars as the core growth driver in the evolving EV landscape.
TRENDS & DISRUPTIONS IMPACTING CUSTOMERS’ CUSTOMERS
The past revenue mix was dominated by ICE vehicles, with EVs contributing only a small portion, indicating emerging opportunities. The future mix shows a major shift toward EVs, with ICE share significantly reduced. Advancements in battery efficiency, power electronics, and autonomous driving are driving EV growth, enabling new products and services such as battery swapping and ultra-fast charging. Improved infrastructure and battery technology increase charging speed and vehicle range.
Asia Pacific to be the largest region in global electric vehicle market during forecast period
The Asia Pacific region is projected to be the largest market for EVs over the forecast period. Strong government support, extensive manufacturing capabilities, and high consumer adoption in countries such as China, Japan, and South Korea are driving market growth. Expanding charging infrastructure, favorable policies, and increasing investments in battery technologies further reinforce the region’s leading position in the global EV market.
MARKET ECOSYSTEM
The ecosystem analysis highlights various players in the electric vehicle market ecosystem, which is primarily represented by OEMs, Tier 1 integrators/suppliers, and EV charging providers. Some of the major EV manufacturers include Tesla, Volkswagen AG, SAIC Motor, BYD, and Geely-Volvo. Top EV charging providers include companies such as ABB, Shell, and ChargePoint, among others. Tier I suppliers include companies such as Denso, Magna, ZF, Delphi, Bosch, and Continental AG, among others.
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