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PESTEL Analysis of Electric Vehicles


PESTEL Analysis of Electric Vehicles

Summary: Electrical vehicles are becoming popular these days and electric car manufacturers are focusing on expanding their business. For that purpose PESTLE analysis or PESTEL is a great tool to understand the external factors for the company when going international.

The PESTLE framework is a useful tool for analyzing the macro-environmental factors that may impact a company or industry. When applied to the electric vehicle (EV) industry, it can help executives identify both opportunities and threats that may arise in different international markets.

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1. Political factors:

The political environment is quite favorable for the development of electric vehicles. The Chinese government has been supportive of the industry with policies and subsidies, while in Europe and the United States, governments are also encouraging the use of electric vehicles through tax incentives and other measures.

Here are political factors affecting electric vehicles in international market

  • Government support and regulations
  • Public opinion and awareness
  • Electric vehicle infrastructure

2. Economic factors:

Electric vehicles are becoming more and more affordable as battery prices continue to decline. At the same time, fuel costs are also rising, making electric vehicles more attractive from a financial perspective.

Electric vehicles (EVs) are becoming an increasingly popular choice for consumers worldwide, as they offer a more sustainable and environmentally friendly option than traditional petrol or diesel vehicles. However, there are a number of economic factors that need to be considered when making the switch to EVs, such as the initial cost of purchase, running costs and availability of charging infrastructure.

Initial cost of purchase

One of the main barriers to wider adoption of EVs is the initial cost of purchase, which can be up to twice as much as a equivalent petrol or diesel vehicle. However, there are a number of government incentives available in many countries that can offset some of this cost, such as tax breaks or subsidies. In addition, the long-term savings on fuel and maintenance costs can make EVs a more cost-effective option in the long run.

Running costs

Electricity is typically cheaper than petrol or diesel, so running costs for EVs are generally lower than for traditional vehicles. However, this will vary depending on local energy prices and the efficiency of the EV. In addition, charging an EV can take longer than refuelling a traditional vehicle, so it is important to consider the time needed for this when planning journeys.

Availability of charging infrastructure

One of the challenges facing wider adoption of EVs is the lack of charging infrastructure in many countries. This can make it difficult to find a place to charge an EV when away from home, which can be a major inconvenience. However, the situation is improving, with many governments and private companies investing in the development of charging networks.

3. Social factors:

Electric vehicles are becoming increasingly popular with consumers due to concerns about climate change and air pollution.

Electric vehicles (EVs) are becoming increasingly popular in many countries around the world as a more sustainable and environmentally friendly alternative to traditional petrol or diesel-powered vehicles. In recent years, a number of governments have introduced policies and initiatives to encourage the uptake of EVs, including financial incentives, investment in charging infrastructure and public awareness campaigns.

However, the penetration of EVs into the global car market is still relatively low, accounting for just 1% of total sales in 2018. A number of factors are thought to be restraining the wider adoption of EVs, including their higher upfront cost, range anxiety and a lack of awareness or understanding about the technology.

In this report, we will examine some of the social factors that are influencing the international market for electric vehicles. We will start by looking at how different countries are promoting EVs and the types of incentives that are being offered. We will then go on to explore public attitudes towards EVs in a number of key markets, including the United States, China and Europe.

4. Technological factors:

Electric vehicle technology is improving rapidly, with new advances in battery technology and charging infrastructure.

Lack of a comprehensive and coordinated international technology development strategy

There is no comprehensive and coordinated international technology development strategy for electric vehicles, which hampers the industrialization process of electric vehicles. The existing technology is not compatible with each other, and there is a big gap between developed countries and developing countries.

Technical difficulties in key components and materials

The production technology of some key components and materials of electric vehicles is relatively backward, such as batteries, motors, power converters, etc., which affects the reliability and service life of electric vehicles.

Incomplete vehicle charging infrastructure

The construction of electric vehicle charging infrastructure is still in its infancy, especially in developing countries. The lack of charging facilities hinders the popularization and application of electric vehicles to a certain extent.

High Cost

The cost of electric vehicles is still relatively high, which is one of the main reasons why consumers are reluctant to buy electric vehicles. In addition, the operation and maintenance costs of electric vehicles are also relatively high.

5. Legal factors:

There are a number of laws and regulations relating to electric vehicles, such as emissions standards and subsidies.

In many countries, governments are offering financial incentives to encourage consumers to switch to EVs. These incentives can take the form of tax breaks, subsidies or other financial incentives, and they are often key in helping to boost sales of EVs.

The automotive industry is under pressure to develop and commercialize electric vehicles (EVs) that are more appealing to consumers and less expensive to produce. Yet, a number of challenges exist in terms of adapting current production processes and developing the necessary charging infrastructure. In addition, as the technology is still relatively new, there are regulatory uncertainties surrounding EVs, which could impact their uptake in different markets.

In this report, we analyze the legal landscape for EVs in four major automotive markets: China, the European Union (EU), Japan, and the United States (US). We identify key regulations and incentives that are currently in place or under consideration in each market, as well as any potential obstacles to the adoption of EVs.

Overall, we find that the legal and regulatory framework for EVs is still in a state of flux, with different approaches being taken by different jurisdictions. However, there are some common trends emerging, such as the need for dedicated EV infrastructure and supportive taxation measures. Given the complex nature of the issues involved, it is likely that the regulatory landscape for EVs will continue to evolve in the coming years.

6. Environmental factors:

Electric vehicles have a much lower environmental impact than traditional petrol or diesel vehicles.

As awareness of environmental issues such as climate change and air pollution increases, there is growing pressure on carmakers to develop more fuel-efficient and low-emissions vehicles. EVs are seen as a key part of the solution to these issues, and this is helping to drive up demand for these types of vehicles.

The impact of crude oil prices on electric vehicles (EVs) is two-fold. Firstly, as petrol and diesel prices increase, the cost advantage of EVs over conventional internal combustion engine (ICE) vehicles becomes more pronounced.

This provides a strong incentive for consumers to switch to EVs, which in turn helps to increase demand and boost sales. Secondly, high oil prices make it more economically viable for carmakers to invest in developing and manufacturing EVs, as they offer a more fuel-efficient alternative that can help to reduce running costs.


The electric vehicles business is certainly good according to pestle analysis. Political factors are supportive of the industry, with many governments around the world committed to reducing emissions from transportation. Economic conditions are also favourable, with electric vehicles becoming increasingly affordable as technology improves. Social trends are also positive, with increasing awareness of the environmental benefits of electric vehicles.

One of the main barriers to the wider adoption of EVs has been the high cost of batteries. However, there have been significant advances in battery technology in recent years, which has led to a reduction in the cost of batteries and an increase in their range and performance. This is making EVs more viable for consumers and is helping to drive up demand.

Another barrier to the adoption of EVs has been the lack of charging infrastructure. However, this is starting to change, with an increasing number of countries investing in the development of charging infrastructure. This is making it easier for consumers to switch to EVs and is helping to boost sales.