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If you’re considering investing in the electric vehicle (EV) industry, it’s important to understand the lay of the land. This industry is poised for booming growth worldwide, so it’s no surprise auto manufacturers are working frantically to develop innovative, cost-effective, and high-performing EVs now. Moreover, technological innovation and experimentation mean there are often new developments that could disrupt and shake up the entire space. Identifying those companies with an edge now, in the early days of the industry, could help investors realize significant gains over the next 5 to 10 years.

This primer will introduce you to some of the major players in the EV industry and the quickly growing market demand driving them forward.
 

Top electric vehicle manufacturers

The EV space is full of possibilities and includes auto manufacturers that have become household names over the years as well as EV startups looking to disrupt transportation. These are the top electric vehicle companies by market share, according to Forbes:

1. Tesla: Tesla sold more than 936,000 electric vehicles in 2021, which represented about 14% of the global market share. The company also broke quarterly sales records in Q1 of 2022, topping 310,048 EVs delivered, according to Inside EVs.
    
2. Volkswagen Group: Volkswagen was close behind Tesla with an 11% market share in 2021. The company announced it delivered 452,900 EVs in 2021, doubling sales over the previous year. However, the Volkswagen Group hasn’t seen the same rapid growth as Tesla, selling less than 100,000 EVs in Q1 of 2022, according to Inside EVs.
    
3. BYD: The Chinese company claimed roughly 9% of the global EV market in 2021, selling 593,743 EVs, a 232% increase over the previous year. Unlike Volkswagen Group, BYD has seen a strong start to 2022, selling nearly 150,000 EVs in Q1, according to Inside EVs.
    
4. GM: General Motors held 7.6% of the total EV market share in 2021. The company reported nearly 516,000 EV sales last year, which is more than double its sales the previous year. However, manufacturing and supply chain challenges have kept GM’s actual EV deliveries very low — only 457 EVs reached their customers in Q1 of 2022.
    
5. Stellantis: Stellantis held 6% of the global EV market share in 2021, selling 388,000 units last year. This was double the company’s sales in 2020. In Q1 of 2022, Stellantis’s sales fell 4% compared to the previous year, but net revenues were up 12%.

Other notable companies in the space include Hyundai Motor (5%), and BMW Group (4.8%). Additionally, young startups have rapidly grown into some of the largest companies in the space and are looking to take the EV space by storm, including the likes of Rivian Automotive, Lucid Group, and Nio.
 

Which markets are generating the most demand for EVs?

The growth of the electric vehicle industry is a worldwide phenomenon not limited to any one country. According to the Bloomberg Electric Vehicle Index Country Breakdown, the countries with the largest demand for electric vehicles are China (34%), the U.S. (28%), and Germany (11%). Each is leading the way in three of the major regional markets that EV manufacturers are targeting.

The North American EV market was worth an estimated $12.8 billion in 2020 and is projected to realize a compound annual growth rate (CAGR) of 37.2% from 2021 to 2028, according to Grandview Research. That means the North American EV market would be worth $117.14 billion by 2028. 

The Asia-Pacific EV market is projected to grow at a similar rate of 34.6% CAGR over the same time period, according to market research from Meticulous Research. That means the Asia-Pacific market would be worth $761.97 billion by 2028. 

Finally, the European Union EV market is projected to reach $143 billion in value by 2027, according to Allied Market Research, with a CAGR of 25.4% from 2020. 
 

What else does the EV industry need to recognize its potential?

Growing EV sales and deliveries are a great sign for the industry. However, in order to overtake internal combustion engine (ICE) vehicles, the EV industry has some growing pains to address. 

Chief among those obstacles is the lack of a nationwide electric vehicle charging network. Unlike drivers of ICE vehicles, who have access to a network of gas stations in virtually every town and alongside every major U.S. interstate, EV motorists are left without a lot of options. EV charging stations are few and far between, and where they are available many take more than 30 minutes to significantly charge an EV’s battery. There is currently no accessible, expedient option for an EV motorist out on the open road.

Recently, the federal government announced $5 billion in funding over the next five years for the establishment of EV charging infrastructure nationwide. Coupled with innovative developments in EV charging stations and EV battery technology, expanded charging infrastructure would help make EV charging more accessible, fast, and easy for motorists — this streamlined charging experience is a prerequisite for mass adoption.

There are companies focused on solving the EV charging problem. For example, Washington-based company Kilows has developed lightning-fast charging units that leverage batteries to store energy drawn from the grid at off-peak hours. The company also aims to work with renewable energy producers in order to further reduce the impact EV charging is expected to have on the electrical grid. Its initial goal is to deploy 5,000 Kilows charging containers, each of which contains four plugs for 20,000 EV charging connectors, across the country by 2028.

Additionally, for the widespread adoption of EVs, price points need to come down. That will occur as used EVs are sold by early adopters and technological developments bring down the prices of new models. However, there are currently headwinds slowing progress on this front, including an inflationary economic environment, supply chain delays, and rising prices of necessary precious metals used in EV manufacturing like nickel and cobalt.
 

The electric vehicle industry is still on the ground floor

Although EVs have become more common, they’re still a long way away from being the norm. For auto manufacturers, increasing sales means supporting a more connected electric vehicle charging infrastructure, developing EVs with broader ranges, and lowering price points to make some EV models more accessible to motorists. For investors, this period of laying the groundwork for mass adoption is a prime chance to add young EV and EV charging companies to their portfolio before the multibillion-dollar boom projected by market analysts.