Electric SUV Market Growth & Trends
The global electric SUV market size is anticipated to reach USD 4.33 trillion by 2030 and is anticipated to expand at a CAGR of 31.9% from 2024 to 2030, according to a new report by Grand View Research, Inc. Increasing concerns about climate change and air quality are prompting consumers to opt for electric vehicles (EVs), including SUVs, which produce lower or zero emissions compared to traditional internal combustion engine vehicles. In addition, several benefits offered by e-SUVs, such as lower operating costs and energy savings, environmental benefits, and additional safety features, are making them more demandable in the global market.
Governments across the globe are offering subsidies, tax credits, and other financial incentives to encourage the adoption of EVs, making them more attractive and affordable to consumers. For instance, in March 2024, the government of India approved a new Electric Vehicle (EV) Policy worth USD 500 million, featuring a range of incentives aimed at attracting investments from global EV companies. This initiative aims to establish India as a major manufacturing hub for advanced EV technology. Such initiatives are expected to bode well for the market growth.
The EV industry, particularly in China, has been experiencing an intense price war as manufacturers compete to gain market share. For instance, according to a report published by IEA, since the end of 2022 in China, intensified competition among major manufacturers has rapidly reduced prices of electric vehicles. The prices of compact electric cars and SUVs declined by up to 10% from 2022 to 2023. In the first quarter of 2024, Tesla further reduced prices, cutting the cost of its Models 3 and Y by up to 6%, compelling rivals to lower prices despite tighter profit margins. The price war has led to substantial price cuts across various electric SUV models, making them more affordable. This has increased demand and driven sales growth.
Furthermore, as electric vehicles become more popular worldwide, substantial advancements in battery technology are driving this evolution. EV batteries are pivotal in achieving electric cars’ full potential and technological progress. By utilizing clean energy, EVs offer a sustainable alternative to traditional gasoline-powered vehicles. Thus, continuous advancements in EV battery technology are boosting the market’s growth.
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Electric SUV Market Report Highlights
- The compact segment dominated the market in 2023. EV manufacturers are introducing a broader range of compact e-SUV models to meet increasing consumer demand for smaller, more versatile electric vehicles. Compact electric SUVs are becoming popular choices for urban commuting due to their smaller footprint, ease of parking, and efficient use of space
- The Battery Electric Vehicle (BEV) segment dominated the market in 2023. The increasing adoption of electric SUVs with BEV technology, owing to its benefits, is driving the segment’s growth. One of the major advantages of BEVs lies in their simplicity. With minimal moving parts, BEVs require low maintenance. They eliminate the need for activities such as oil changes and tune-ups associated with traditional internal combustion engine vehicles
- The 250-500-mile segment is expected to grow at the highest CAGR from 2024 to 2030. The range of 250 to 300 miles in an electric SUV addresses range anxiety concerns and provides a compelling set of advantages for environmentally conscious consumers seeking practical and efficient transportation solutions, contributing to the growth of this segment
- The FWD segment accounted for the highest market share in 2023. FWD adoption is on the rise because it’s more cost-effective to manufacture, requiring fewer components than rear-wheel drive systems. This cost efficiency enables manufacturers to offer electric SUVs at more competitive prices. Such factors are expected to bode well for the segment’s growth
- The Europe region dominated the market in 2023. Growing consumer demand and increasing production and sales of electric SUVs across Europe can be attributed to the market growth in the region. In addition, the vast presence of e-SUV manufacturers such as Volkswagen AG and AB Volvo in the region is boosting the market’s growth
- In June 2024, General Motors launched an electric SUV, the Chevrolet Equinox EV, manufactured at its Ramos Arizpe facility in Coahuila, Mexico. The Equinox EV, powered by GM’s Ultium battery platform, provides a range of up to 513 km on a full charge. It has a 180 kW (241 hp) motor, delivering 32.6 kg-m of torque and FWD traction. In addition, the vehicle includes a dual-port portable charger that supports both 110V and 220V, ensuring flexibility for charging requirements
Electric SUV Market Segmentation
Grand View Research has segmented the global electric SUV market based on vehicle type, propulsion type, vehicle range, drive type and region:
Electric SUV Market Vehicle Type Outlook (Volume, Units; Revenue, USD Million, 2018 – 2030)
- Compact
- Mid-size
- Full-size
Electric SUV Market Propulsion Type Outlook (Volume, Units; Revenue, USD Million 2018 – 2030)
- Battery Electric Vehicle (BEV)
- Plug-in Hybrid Electric Vehicle (PHEV)
Electric SUV Market Vehicle Range Outlook (Volume, Units; Revenue, USD Million, 2018 – 2030)
- Up to 250 Miles
- 250-500 Mile
- Above 500 Miles
Electric SUV Market Drive Type Outlook (Volume, Units; Revenue, USD Million, 2018 – 2030)
- FWD
- RWD
- AWD
Regional Insights
U.S. Electric SUV Market Trends
The electric SUV market in the U.S. dominated the North America market with the largest revenue share and is expected to grow at a considerable growth rate of 37.7% from 2024 to 2030. The market is rapidly expanding in the U.S. with major companies such as Tesla, Inc. The e-SUV market is further anticipated to continue its growth trajectory, with growing investment in research and development, improving charging infrastructure, and expanding model portfolios.
Canada electric SUV market is expected to grow at the highest CAGR from 2024 to 2030. The Canadian market offers a wide range of electric SUVs, including popular models like the Audi Q4 e-tron, Hyundai IONIQ 5, and Kia EV6. These e-SUVs offer various configurations to meet diverse consumer needs, from compact urban commuters to spacious family vehicles.
Asia Pacific Electric SUV Market Trends
The electric SUV market in Asia Pacific is anticipated to grow at a steady CAGR from 2024 to 2030. This growth is driven by the increasing demand for eco-friendly transportation and the presence of numerous emerging economies. In addition, stringent government regulations, environmental concerns, and the expansion of charging infrastructure further accelerate the industry’s overall progress in this region.
China electric SUV market is expected to witness a steady growth rate of 29.4% from 2024 to 2030. The Chinese government has been a major driving force behind the growth of EVs, including electric SUVs. According to the government’s new technical requirements for EVs eligible for tax breaks, starting in 2024, Chinese buyers will be exempt from paying taxes on BEVs that offer a driving range of at least 200 km (approximately 124 miles) per charge. For PHEVs to qualify for this tax exemption, they must have a battery-only range of at least 43 km (approximately 27 miles). Policies such as subsidies for EV buyers, tax incentives, and stringent emissions regulations have encouraged manufacturers and consumers to shift towards electric mobility.
List of Key Players in the Electric SUV Market
- Tesla Inc.
- BYD Company Ltd.
- Hyundai Motor Company
- Toyota Motor Corporation
- Nissan Motor Corporation
- Kia Corporation
- Ford Motor Company
- Volkswagen AG
- AB Volvo
- Honda Motor Co., Ltd.
- Chevrolet
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