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The Vehicle Electrification Market Is Expected To Driven By Environmental Regulations

The Vehicle Electrification Market Is Expected To Driven By Environmental Regulations


The vehicle electrification market includes hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs). These vehicles utilize electric propulsion with rechargeable batteries or other energy storage devices. With growing environmental concerns and implementation of stringent emission regulations, automakers are developing electrified vehicle models with lower carbon emissions.

The integration of electric powertrains is enabling manufacturers to comply with corporate average fuel economy (CAFE) and greenhouse gas (GHG) emission standards. Various countries have implemented policies promoting electric vehicles, including purchase incentives and public charging infrastructure investments. Additionally, technological advances have reduced battery costs and improved energy density, making electrified vehicles more affordable and practical for daily use.

The global Vehicle Electrification Market is estimated to be valued at US$ 114.24 Bn in 2030 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 key trends:

One of the key trends in the vehicle electrification market  is the development of all-electric commercial vehicles. Major fleet operators are proactively electrifying their vehicle fleets to lower operating costs and meet sustainability goals. Electric trucks and vans offer significantly lower fuel and maintenance expenses compared to diesel variants. Startups such as Rivian, Arrival and Xos Trucks are unveiling electric vehicles tailored for commercial applications. Established manufacturers like Ford and GM are also investing heavily in productions of electric commercial vehicles. This shift towards electrification of commercial fleets will drive the demand for electric powertrains in the coming years.

Porter's Analysis

Threat of new entrants: The threat of new entrants in the vehicle electrification market is moderate. High capital requirements and the need for technological expertise pose a barrier to entry.

Bargaining power of buyers: The bargaining power of buyers is moderate. Buyers have several product options from different manufacturers, giving them moderate influence over price.

Bargaining power of suppliers: Suppliers of components and materials have moderate bargaining power due to the prevalence of some component manufacturers globally.

Threat of new substitutes: The threat of substitutes is moderate as electric vehicles still account for a small share of the overall automotive market. Consumers are still warming up to the new technology.

Competitive rivalry: Competition in the vehicle electrification market is high amongst the top manufacturers as they continue to invest heavily in new technologies and solutions.

Key Takeaways

The Global Vehicle Electrification Market Size is expected to witness high growth over the forecast period. The global Vehicle Electrification Market is estimated to be valued at US$ 114.24 Bn in 2030 and is expected to exhibit a CAGR of 5.9% over the forecast period 2023 to 2033.

The Asia Pacific region currently dominates the vehicle electrification market owing to the large production and sales volumes of electric vehicles in China. Government incentives and initiatives are driving adoption.

Key players

Key players operating in the vehicle electrification market are AME, Bosch, Continental, Magna, Vector, and Valeo. AME is one of the largest Tier 1 suppliers in Europe and a leading provider of electrified powertrain systems. Bosch is a major player in automotive components and engineering and supplies electric axle drives.

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