The electric car industry is likely to evolve and gain a considerable share of the entire car market. At present, the electric vehicle market comprises only 0.5% of the overall car market. It might take over up to 20% of the market within a decade. The external environment is quite favorable for this growth.
A brief PEST analysis can reveal the major opportunities for the electric car industry. Political factors include governmental restrictions concerning CO2 emissions, taxation, subsidies, and so on. According to Van Den Steen, the US government provides various tax subsidies to carmakers for their development of emission-free vehicles. Some US states (for example, California) provide additional tax subsidies. Furthermore, countries have started introducing various regulations restricting people’s activity that can be associated with greenhouse gas emissions, including driving conventional cars. Finally, electric vehicles owners receive government subsidies as well.
As for economic factors, these include the cost-effectiveness of electric cars, fluctuations in the prices and availability of fuel and associated products, and others. Financial issues have become a characteristic feature of the 2010s, and many countries still have difficulties that affect customers’ buying capacity. The cost-effectiveness of electric vehicles makes them attractive, while the affordable prices of some models make them popular. Social factors are quite influential, and people’s focus on environmental sustainability has resulted in a growing interest in electric vehicles. Finally, technological aspects are equally important, as advances in the sphere of lithium-ion battery development have made electric cars more affordable and more efficient. As a result, the use of this technology has increased considerably within a few years (see figure above). The development of software can make electric cars more popular as people enjoy the features new cars have. These features include autopilot systems, control systems, and so on. It is possible to forecast the growth of the industry on the basis of the history of sales. The sales of electric vehicles grew exponentially during the past seven years. The average growth is about 200% annually. Therefore, by 2020, annual sales are likely to exceed 8.3 million vehicles.