The vehicle electrification involves integration of electric drive components such as battery packs, chargers, electric traction motors, electric generators and electric power steering systems into conventional vehicles with internal combustion engines. These electric components are used to supplement or replace the mechanical components in the vehicles. Electric vehicles (EVs) including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), hybrid electric vehicles (HEVs) and fuel cell electric vehicles (FCEVs) are witnessing robust demand owing to growing concerns regarding environmental pollution and depleting fossil fuel reserves. Governments across the globe are offering subsidies and tax rebates on purchase of EVs to encourage adoption of clean fuel vehicles. EVs provide better driving experience with improved torque, acceleration and smooth gear changes. With advancement of technologies, driving range of EVs have increased substantially providing convenience to users.
The global vehicle electrification market is estimated to be valued at US$ 84.41 in 2023 and is expected to exhibit a CAGR of 10% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
The growing demand for electric vehicles driven by increasing environmental concerns is expected to drive growth of the global vehicle electrification market over the forecast period. Government policies encouraging adoption of electric vehicles through provision of subsidies and tax rebates is another key factor fueling market growth. For instance, in the US, the Inflation Reduction Act 2022 provides tax credits of up to $7,500 for purchase of new electric vehicles. Advancements in battery technologies have substantially increased driving range of electric vehicles addressing key adoption barrier of range anxiety among consumers. Lithium iron phosphate (LFP) batteries providing comparable driving range to gasoline vehicles at lower costs are gaining popularity. OEMs are also focusing on developing fast charging networks to support electric vehicle drivers.
The Vehicle Electrification Market is segmented into Electric Vehicle, Hybrid Electric Vehicle and Plug-in Hybrid Electric Vehicle. Hybrid Electric Vehicles dominates the market currently with over 50% share owing to its cost efficiency and lower emissions as compared to conventional vehicles. Hybrid vehicles are gaining popularity as they provide the benefits of both conventional and electric vehicles.
Political: Government incentives and subsidies especially in Europe and Asia Pacific are promoting the adoption of electric vehicles. Stricter emission norms are encouraging automakers to increase electrification.
Economic: Lower fuel and maintenance costs of electric vehicles are attracting customers. Falling battery prices are making electric vehicles more affordable. The total cost of ownership of electric vehicles is becoming comparable to gasoline vehicles.
Social: Increased environmental concerns are driving more consumers towards green vehicles. Rapid urbanization is causing more traffic and pollution in cities making electric vehicles appealing.
Technological: Advancements in battery technologies are improving vehicle range and reducing charging time. Development of fast and ultra-fast charging stations is boosting electric vehicle adoption.
The Global Vehicle Electrification Market Size is expected to witness high growth at a CAGR of over 10% during the forecast period of 2023 to 2030. Regional analysis
Asia Pacific dominates the global market currently with China being the largest market. Government support schemes, production incentives and expanding charging infrastructure are driving electric vehicle adoption in China. Europe is another major region propelled by stringent CO2 norms and bans on combustion engines in select countries in the coming decade.
Key players operating in the Vehicle Electrification Market are Intertek Group Plc, SGS SA, Cenergy International Services, L.L.C., UL International Gmbh, Mistras Group, James Fisher and Sons plc, Global Wind Service, Force Technology, Vestas, and Siemens Wind Power GmbH & Co.KG. Key players are investing heavily in developing advanced battery technologies, fast charging solutions and battery recycling to strengthen their market position. Partnerships, mergers and acquisitions are also common in this space.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it