Electric vehicles and hybrids use advanced battery technology which enables vehicles to travel longer distances on a single charge. This reduces dependence on fossil fuels and helps minimize environmental pollution from vehicles which accounts for a significant share of total emissions globally. Technologies supporting vehicle electrification like advanced batteries and electric motors are continuously evolving to offer enhanced performance, driving range and affordability.
The global Vehicle Electrification Market is estimated to be valued at US$ 84.41 billion in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Government policies and rising environmental awareness among consumers have resulted in substantial growth opportunity for vehicle electrification. Major automotive markets like Europe and China have mandated new vehicle sales to be zero emission by 2035-2040. This creates a large captive market for electric vehicles and plug-in hybrids. Government incentives in the form of subsidies and tax benefits on purchase of electric vehicles is also encouraging more consumers to opt for green mobility solutions. Rising oil prices and total cost of ownership parity with gasoline vehicles will further accelerate adoption of electric vehicles in the mass market segment over the coming decade. Automakers are actively working to introduce affordable long-range electric vehicles over the next 5 years to cater to this growing demand.
Porter’s Analysis:
Threat of new entrants: Technology barrier to entry is relatively high for electrical vehicles as it requires significant upfront capital investments and strong R&D capabilities to develop EV technologies.
Bargaining power of buyers: The bargaining power of buyers is high as there are many established vehicle manufacturers providing electric vehicles with advanced technologies. Buyers have options to choose from different brands based on their requirements.
Bargaining power of suppliers: The bargaining power of suppliers is medium as there are many component suppliers providing critical parts for electric vehicles like batteries, motors, and power electronics. However, the investments required give existing suppliers an advantage.
Threat of new substitutes: Threat of substitutes is medium as hybrid electric vehicles provide an alternative but EVs are gaining popularity due to declining prices and increasing charging infrastructure.
Competitive rivalry: Competition in the electric vehicle market is intense among established automakers as well as new EV startups. Companies compete based on vehicle range, design, charging network, and after-sales service.
SWOT Analysis:
Strengths: Growing consumer acceptance for eco-friendly mobility and government subsidies on EV purchases are driving market growth. Most automakers are investing heavily in developing affordable EV models with longer driving range.
Weaknesses: High production costs of electric vehicles compared to conventional vehicles remain a challenge. Limited driving range and lack of standard charging infrastructure deters mass adoption.
Opportunities: Growing demand for shared, autonomous, and connected electric mobility offers new opportunities. Developing standardized global EV charging solutions can boost sales.
Threats: Rising prices of lithium-ion batteries, which are the most important and costly component of EVs, can impact demand. Dependency on imports for key battery materials can affect supply chain.
Key Takeaways:
The Global Vehicle Electrification Market Size is expected to witness high growth over the forecast period of 2023 to 2030. The market size for 2024 is estimated to reach US$ 84.41 Bn registering a CAGR of 5.9% over the projection period.
Regional analysis: Asia Pacific dominates the global EV market currently accounting for over 50% of sales led by China. Europe is another major regional market for EVs driven by supportive regulatory policies and incentives for electric vehicles in countries like Germany, UK and France. North America is also witnessing high penetration of plug-in electric cars due to growing consumer acceptance in the US.
Key players: Key players operating in the vehicle electrification market include AME, Bosch, Continental, Magna, Johnson Electric, Allison Transmission, Valeo, Borgwarner, Cummins, Dana, Denso, Mitsubishi Electric, GKN, Jtekt, Hitachi, Wabco, and others. These companies are focusing on developing advanced technologies for electrified components and investing in scaling up production capacities to meet growing demand.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it