by Vehicle electrification refers to the incorporation of electric powertrains in automobiles either through hybridization or fully electric drives. The global adoption of electrified drivetrains enables enhanced fuel efficiency and zero tailpipe emissions compared to traditional internal combustion engines. Manufacturers are focusing on the development of hybrid systems, electric vehicles, and associated component parts such as electric motors, batteries, and power electronics.
The global vehicle electrification market is estimated to be valued at US$ 84.41 Bn in 2023 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 Dynamics:
Stringent government regulations towards fuel efficiency and curbing greenhouse gas emissions remain one of the key drivers propelling the vehicle electrification market growth. The Corporate Average Fuel Economy (CAFE) standards in regions such as North America and Europe mandate automakers to improve the fuel economy of their vehicle fleet each year. This is compelling OEMs to widely adopt electrified powertrains. Furthermore, governments around the world are offering substantial purchase incentives and subsidies for electric vehicles to boost customer demand and encourage the development of relevant infrastructure. For instance, the India government provides an income tax deduction of INR 1,50,000 on interest paid on electric vehicle loans.
SWOT Analysis
Strength: Vehicle electrification provides better performance with lower emissions. It allows driver to reduce fuel costs over time. Governments across regions are providing subsidies to promote electric vehicles.
Weakness: High initial costs of electric vehicles make them less affordable for many customers. Limited battery range remains a key barrier for widespread adoption. Not all regions have sufficiently built charging infrastructure yet.
Opportunity: Strong government policies to curb pollution are driving demand. Rising environmental concerns are making customers prefer electric options. New players are entering the market with affordable electric cars.
Threats: Customers may still perceive electric vehicles as inconvenient due to range and charging issues. Dependency on rare earth metals increases risks in the supply chain. Established automakers have advantages in manufacturing traditional vehicles.
Key Takeaways
The Global Vehicle Electrification Market Size is expected to witness high growth. Customers are now more aware of benefits of electric cars in reducing emissions and fuel costs. Many countries have introduced incentives and regulations that are supporting faster rates of electric vehicle adoption. The global Vehicle Electrification Market is estimated to be valued at US$ 84.41 Bn in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2023 to 2030.
China is leading the market currently with the largest customer base as well as manufacturing presence of global automakers. The government’s proposed fossil fuel vehicle ban targets are driving momentum in the region. In Europe, countries like Germany and United Kingdom are emerging as major EV markets. Stringent emission norms by the European Union have compelled automakers to invest heavily in electric fleets. The availability of public charging points is also increasing rapidly across major cities.
Key players operating in the vehicle electrification market are AME, Bosch, Continental, Valeo, TRW, ZF, BorgWarner, Denso, and Johnson Electric. They are investing in developing affordable batteries, on-board chargers, and other electric powertrain components. Partnerships between technology and auto companies will help address issues like charging times and longer range batteries.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
