Electric SUV Market Size, Share and Trends 2024 to 2034

Electric SUV Market Size and Forecast 2024 to 2034

The global electric SUV market size is calculated at USD 740.91 billion in 2024 and is anticipated to reach around USD 11,953.03 billion by 2034, expanding at a CAGR of 32.06% from 2024 to 2034. The rising awareness about global warming due to vehicle pollution and the demand for fully equipped luxury vehicles are driving the growth of the market. 

Electric SUV Market Key Takeaways

• Europe led the electric SUV market with the largest market share of 47% in 2023.
• The MEA is expected to grow at a double digit CAGR of 41.7% during the forecast period.
• By vehicle type, the compact SUV segment accounted for the largest market share of 54% in 2023.
• By vehicle type, the mid-sized segment is expected to have substantial growth in the market during the predicted period.
• By propulsion type, the battery electric vehicle (BEV) segment led the market in 2023.
• By propulsion type, the plug-in hybrid electric vehicle (PHEV) segment is predicted to witness significant growth in the market over the forecast period.
• By vehicle range, the up to 250 miles segment dominated the market in 2023.
• By vehicle range, the 250-500 miles segment expected significant growth in the market during the predicted period.
• By drive type, the FWD segment contributed the highest market share of 52% in 2023.
• By drive type, the AWD segment is predicted to witness significant growth in the market over the forecast period.

Europe Electric SUV Market Size and Growth 2024 to 2034

The Europe electric SUV market size is exhibited at USD 348.23 billion in 2024 and is projected to be worth around USD 5,677.69 billion by 2034, growing at a CAGR of 32.18% from 2024 to 2034.

North America is estimated to have significant growth during the forecast period. The growth of the electric SUV market is attributed to the rising economic development in regional countries like the U.S. and Canada, which accelerates the per capita income in the population, which causes lifestyle changes, and the demand for luxury vehicles is driving the sales of the SUV vehicle segment. The rising awareness about environmental pollution due to gasoline vehicles is driving the adoption of electric vehicles. Additionally, the rising presence of the leading automobile companies in the United States is accelerating the growth of the electric SUV market in the region.

The electric cars market was accounting for a strong growth in terms of sales and reached 14 million in 2023; the total sales of electric cars increased from 4% in 2020 to 18% in 2023.

• In the year 2024, the electric car market is seeing significant growth; over 3 million electric cars were sold in the first quarter, which is 25% more than the previous year. In 2024, the expected sales of electric cars will reach around 17 million. 
• In December 2023, the Canadian Government amended its GHG regulations for the inclusion of the latest requirements to expand the availability of zero-emission vehicles, which includes passenger cars and light trucks, with targeting at least 20% zero-emission vehicle sales by 2026, 60% by 2030 and 100% zero-emission vehicle sales by 2035.

Asia Pacific expects a steady growth rate during the forecast period. The growth of the market is attributed to the rising population and the economic stability in the population that drives the demand for the automobile industry and luxury automobiles for enhanced driving experience and rising global warming due to the rising number of vehicle emissions in the regional countries like India, and China due to the continuously rising number of population that causes the increased consumption is creating awareness regarding the environment pollution that drives the demand for the electric vehicles that boosts the growth of the electric SUV market across the region. 

Market Overview

The rise in the automobile industry all around the world, along with the continuous transformation in technologies and launches, is driving the advancements in the automobile industry. The rising disposable income in the worldwide population and the increasing lifestyle standards have made the rising demand for luxurious vehicles and the sales of the SUV segment of vehicles. Additionally, the rising participation of the leading market players in the launch and innovations of electric vehicles and electric SUVs are collectively driving the growth of the electric SUV market. 

How Can AI Impact the Electric SUV Market?

The integration of AI into the electric vehicle revolutionizes the operations of the electric vehicle and enhances a smarter transportation landscape. AI helps in optimizing personalization in driving experience and charging schedules and assists in battery production. AI also assists in lowering carbon emissions and accelerating the industry towards emerging future opportunities. There are several leading luxury automobile brands that are leveraging AI technologies in their electric vehicles for smarter operations and enhanced driving experience.

• In May 2024, Kia, a leading South Korean automobile brand, launched the EV3 Compact SUV, featuring an AI-powered voice assistant, marking it as the first in the company’s range of cars.

Electric SUV Market Growth Factors

• Rising demand: The increasing demand for automobiles by the population due to the rising disposable income in the population and the changing lifestyle preference, increasing demand for luxury goods, and urbanization are collectively driving the growth of the sector.
• Growing Urbanization: The increasing urbanization in the developed economies creates an increased demand for automobiles to save time for commute, and the increasing awareness about environmental pollution caused by gasoline vehicles is driving the adoption of electric vehicles.
• Market competition: The increasing intervention of the leading automobile players in the extension of their electric vehicle portfolio with the development and launch of luxurious and advanced EVs are driving the growth of the electric SUV market.

Market Scope

Market Dynamics

Driver

Awareness regarding electric vehicles

The increasing awareness among the population of climate change due to the excess availability of gasoline or fuel-based vehicles causes a severe impact on global warming by creating enormous carbon pollution. The increasing awareness among the population on environmental pollution driving the shift in preference toward electric vehicles. Electric vehicles do not create any kind of carbon emission in the environment, and having less maintenance cost boosts the demand for electric vehicles and anticipates a higher demand for the electric SUV market.

Restraint

High Cost

The increased cost of electric vehicles, especially in the electric SUV segment, due to its enhanced features, technologies, and comfort, makes it unaffordable for a large category of the population, restraining the growth of the electric SUV market.

Opportunity

Rising market competition

The continuous rise in market competition in the automobile industry and the ongoing intervention of new market players in the industry, along with the advanced launch and development of automobile technologies, are driving the expansion of the market. Additionally, the robust government support for EV adoption by providing tax benefits and pricing is collectively driving the growth of the market.

Vehicle Type Insights

The compact SUV segment accounted for the largest share of the electric SUV market in 2023. The increasing awareness about environmental pollution and the government's support for the adoption of electric vehicles, offering several benefits and subsidies associated with the sale of electric vehicles, are driving the demand for the compact SUV segment. The rising attraction towards the compact SUV in the population is due to its luxury, comfort, appealing design, and fuel efficiency. The rising intervention of the leading automobile players in the integration of electric cars into their portfolio and the development of the compact electric SUV is driving the growth of the compact SUV segment. The rising availability of compact SUVs in the market is further contributing to the growth of the segment.

The mid-sized segment is expected to have substantial growth in the market during the predicted period. Mid-sized SUVs are larger in size and offer more versatility, designs, and fuel efficiency. The mid-sized SUV has the largest space for luggage and larger passenger space with increased legroom. The mid-size offers more comfort to the passenger, which makes it the ideal choice for large families' transport.

Propulsion Type Insights

The battery electric vehicle (BEV) segment led the electric SUV market in 2023. The battery electric vehicle (BEV) is the vehicle's propulsion, which wholly depends on electricity and comes with a rechargeable battery pack. The engine is fully driven by electric energy that emits zero pollution to the environment. The rising pollution level in the environment of gasoline vehicles and the awareness about global warming due to vehicle pollution is driving the preference towards the adoption of battery electric vehicles. Battery electric vehicles are less maintenance-intensive and offer an enhanced driving experience.

The plug-in hybrid electric vehicle (PHEV) segment is predicted to witness significant growth in the electric SUV market over the forecast period. The plug-in hybrid electric vehicle (PHEV) is a fueled engine combined with a battery and electric motor. The plug-in hybrid electric vehicle (PHEV) has a larger energy storage capacity and comes with several advantages, such as emitting zero pollution when driving on batteries, providing fuel efficiency in high traffic conditions, enhancing the driving experience, and tax efficiency due to the government support on sale of plug-in hybrid electric vehicle (PHEV) segment.

Vehicle Range Insights

The up to 250 miles segment dominated the electric SUV market in 2023. The vehicle ranges up to 250 miles. Compact SUVs are used for internal commutes in the cities. These types of compact SUVs are smaller and more compact in design and have a smaller battery pack and a limited vehicle range of up to 250 miles; their smaller size makes them ideal for urban transportation for 2-4 people or small families.

The 250-500 miles segment expected a significant growth in the electric SUV market during the predicted period. The rising demand for the electric SUV for the long distance is driving the growth of the 250-500 miles SUV range. These types of SUVs are the perfect combination of environmental friendliness and practicality. The 50-500 miles range electric SUV is larger in space and the ideal choice for larger groups of people for traveling long distances.

Drive Type Insights

The FWD segment dominated the electric SUV market in 2023. The front-wheel drive (FWD) electric SUV provides the power from the engine to the front wheel while offering several other benefits such as enhanced transaction, fuel economy, more space for cargo and passengers, and lesser maintenance expenses. The front-wheel drive (FWD) is lighter in weight, so it offers fuel economy.

The AWD segment is predicted to witness significant growth in the electric SUV market over the forecast period. It is the drivetrain that transfers power to all the wheels of the vehicles. The all-wheel drive (AWD) provides full traction, support, stability, and enhanced control on vehicles compared to the four-wheel drive (FWD). The all-wheel drive (AWD) runs automatically, and technology helps in all circumstances and necessary adjustments.

Electric SUV Market Companies

• Tesla Inc.
• Hyundai Motor Company
• Toyota Motor Corporation 
• Nissan Motor Corporation
• Kia Corporation
• BYD Company Ltd.
• Ford Motor Company
• Volkswagen AG
• AB Volvo
• Honda Motor Co., Ltd.
• Chevrolet

Latest Announcements by the Industry Leaders

• In January, Elon Musk confirmed the planning for the introduction of the affordable electric vehicle. Musk said the next-generation vehicle will launch in 2025 and introduce the second major growth wave, following the first wave with the launch of Model 3 vehicles in 2017 and Model Y vehicles in 2020.
• Hyundai is introducing its forthcoming EV, the Ioniq 9. The company shared a few introductory images of its flagship electric SUV on its social media handles and official websites.

Recent Developments

• In November 2024, Mahindra is marking a significant milestone by extending its electric vehicle portfolio with the launch of new electric SUVs, the XEV 9e and BE 6e. The vehicle will make its debut in the global market with the name of ‘Unlimited India’ at the event held in Chennai on 26 November 2024.
• In November 2024, Skoda Auto is planning to launch the electric vehicle in the Indian market in 2025. Skoda, planning to launch its best-selling European Enyaq EVs, was prepared and tested for the Indian market.

Segments Covered in the Report

By Vehicle Type

• Compact
• Mid-size
• Full-size

By Propulsion Type

• Battery Electric Vehicle (BEV)
• Plug-in Hybrid Electric Vehicle (PHEV)

By Vehicle Range

• Up to 250 Miles
• 250-500 Mile
• Above 500 Miles

By Drive Type 

• FWD
• RWD
• AWD

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East and Africa