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Electric cars constitute less than 0.1 percent of the vehicle market today, but market and regulatory forces all but ensure electric vehicles will be the future of the auto industry. According to the 2016 Global Electric Vehicle Outlook from the International Energy Agency, the global electric car stock has grown rapidly since 2010, from about 2,000 cars in 2005 to nearly 1.3 million in 2015. The boom in the electric car industry is usually attributed to three factors:

  • The increasing recovery cost globally for fossil fuels used in conventional vehicles;
  • The environmentally-friendly potential of electric vehicles, which produce fewer CO2 emissions than gasoline cars, aiding efforts to reduce greenhouse gases that contribute to climate change
  • The lower fuel cost for electric vehicles in some markets, particularly in the United States.

Regulatory incentives, infrastructure to support electric vehicles, market size, and other factors contribute to a varied adoption rate worldwide, creating pockets of electric-friendly communities and powerful incentives for auto manufacturers to capture early adopters for their electric vehicle (EV) product lines. 

Global electric car market. The United States, China, and Japan lead the world based on electric car stock, making up more than two-thirds of the total global electric car stock. Battery electric cars represent about 60 percent of the global EV market. China dominates this market segment, outstripping Japan in 2014 and the US in 2015. Meanwhile, Norway has the largest domestic market share of battery electric cars, with 0.23 percent of the country’s cars being electric. Norway was also ranked third globally in 2015 based on the number of newly registered battery electric cars.

US electric car market. If China dominates the market for battery vehicle segment, the US is the all-time leader in the hybrid electric car market, a market led by Toyota, Ford, and Lexus. The Toyota Prius is the best selling model despite sales that have declined by more than 30 percent since 2012. The Prius decline is not unique: 28 of the 36 hybrid models in the US hybrid vehicle market have experienced negative sales growth during the last three years. What market share hybrids are losing, plug-in electric vehicles are gaining. US sales of the Tesla Model S grew from roughly 2,000 cars per year in 2012 to nearly 30,000 cars in 2016.

European electric car market. According to the European Alternative Fuels Observatory, total sales of electric cars in Europe increased from 9,000 in 2011 to 209,000 in 2016, a 23-fold increase that was driven more by plug-in hybrid electric vehicles than battery vehicles. In the European Union, the leader by number of battery electric passenger cars sold is France where 22,000 cars were purchased in 2016. As already noted, outside the EU, Norway is the European leader in the electric car market.

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