The Vehicle Electrification Market comprises products including electric vehicles, hybrid vehicles, battery electric vehicles, plug-in hybrid electric vehicles, and fuel cell electric vehicles. Vehicle electrification helps improve fuel efficiency and reduce carbon emissions, as stringent emission norms are being implemented globally.
The global Vehicle Electrification Market is estimated to be valued at US$ 97.25 billion in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2031.
Vehicle electrification involves partially or fully powering a vehicle using electric motors and batteries instead of solely using an internal combustion engine. This improves fuel efficiency while reducing dependency on fossil fuels. Features like regenerative braking also help recoup lost energy and extend vehicle range. With tightening emission regulations and rising environmental concerns, automakers are increasingly adopting electrification technologies. This is driving Vehicle Electrification Market Demand as well as associated components like electric motors, batteries, and power converters.
Key Takeaways
Key players operating in the Vehicle Electrification Market include AMETEK Inc., Alleima, Teshima International Corporation, Om Steel Tubes Ltd., Tech Tube, Inc., Bison Stainless Tube, LLC, Vita Needle Company, M&M International, Fuji Seiko, Accu-Tube, Eagle Stainless Tube & Fabrication, Inc., Forefront Medical Technologies, Minitubes, Teleflex Incorporated, VIANT, and K-Tube Technologies. Strict emission norms are compelling automakers to electrify their vehicles. This is driving rising demand for electrified vehicles and their components globally. Advancements in battery cell chemistry and manufacturing are improving energy densities, reducing costs, and extending ranges of electric vehicles.
Market Trends
One of the key trends in the Vehicle Electrification Market is the growing popularity of hybrid vehicles. As they utilize both electric motors and gasoline engines, hybrids offer the benefits of electrification without range anxiety. Plug-in hybrid electric vehicles (PHEVs) that can charge via external electric grids are gaining traction as well. Another trend is the rapid development of charging infrastructure to support the rising electric vehicle fleet. Governments are collaborating with automakers and energy firms to establish nationwide public charging networks.
Market Opportunities
One of the major opportunities in the Vehicle Electrification Market is the increasing popularity of electric buses and commercial vehicles. As cities aim to reduce emissions from public transportation, demand for battery-electric buses is surging globally. Electrification of light commercial vehicles is also gaining momentum. Further, the production of lithium-ion batteries at mass scale presents an opportunity for automakers as well as battery suppliers to cater to the growing needs of the electric vehicle industry.
Impact of COVID-19 on Vehicle Electrification Market Growth
The COVID-19 pandemic significantly impacted the growth of the Vehicle Electrification Market in the initial months. Manufacturing facilities and vehicle production came to a halt due to lockdowns imposed globally. Supply chains were disrupted affecting the availability of raw materials and components. This stalled the development of new electric vehicles and hampered the sales of existing models in 2020. However, many nations announced attractive recovery stimulus packages and financial incentives to promote electric mobility post the pandemic. This bolstered the demand for green transportation solutions.
Automakers accelerated their efforts to shift to electric powertrains to meet evolving consumer preferences and emission norms. Original Equipment Manufacturers focused on ramping up production capacities and launched new electric vehicle models to cater to the increasing demand. Governments lifted restrictions gradually allowing factories to resume operations with safety protocols. The supply chains were restored supporting the revival of manufacturing activities. Researchers intensified their work on battery technologies to improve vehicle range and charging infrastructure was expanded across major cities.
It is expected that government initiatives to build a sustainable future coupled with affordable options will push electric vehicle adoption higher compared to pre-pandemic levels. OEMs and automotive industry players recognize this as an opportunity for growth. While short-term sales were impacted, the long-term outlook remains positive for Vehicle Electrification Market if strategies consider building consumer confidence, local production and mass market electric vehicles.
In terms of geographical regions, Europe accounts for the largest value share in the Vehicle Electrification Market currently. The presence of major automakers, strict emission norms and supportive policies have accelerated the adoption of electric vehicles. Countries like Germany, Norway, France and the UK are early adaptors with growing charging infrastructure. However, Asia Pacific is emerging as the fastest growing regional market for vehicle electrification driven by China's efforts to become the global EV leader and innovations in battery technologies.
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