Vehicle electrification refers to the integration of electric power into vehicles, which allows partial or complete electrification of vehicles. Growing concerns regarding environmental pollution and depleting fossil fuel reserves have increased the demand for hybrid and electric vehicles globally. Hybrid vehicles use a combination of an internal combustion engine and electric motor, while electric vehicles are solely powered by electric motor. Electric vehicles offer various advantages such as reduced emissions, lower operating and fuel costs, and more driving range. The increasing adoption of electric vehicles plays a major role in reducing dependence on fossil fuels and curbing greenhouse gas emissions.
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 10.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Increased Demand for Hybrid and Electric Vehicles
The growing demand for hybrid and electric vehicles around the world presents a major market opportunity for vehicle electrification. Stringent government regulations and policies regarding vehicle emissions along with rising fuel prices are encouraging the adoption of electric vehicles. In addition, increasing consumer inclination towards green mobility solutions is driving the sales of electric vehicles. Government support through incentives and subsidies on the purchase of electric vehicles make them more affordable option for customers. Manufacturers are extensively investing in research & development of advanced lithium-ion battery technologies to improve the driving range and performance of electric vehicles. Rapid expansion of charging infrastructure is also boosting the demand. With technological advancements and favorable government policies, the demand for hybrid and electric vehicles is expected to rise significantly in the coming years, providing numerous growth opportunities for vehicle electrification market.
Porter’s Analysis
Threat of new entrants: The vehicle electrification market requires high capital investment and poses high risks associated with developing new technologies. Thus, the threat of new entrants is moderate.
Bargaining power of buyers: The presence of many vehicle OEMs increases the bargaining power of buyers in the market. Buyers can negotiate on price and demand value-added services.
Bargaining power of suppliers: A few large suppliers catering to this specialized market space limits suppliers' bargaining power. Suppliers also face high switching costs.
Threat of new substitutes: Alternate powertrain technologies pose a threat, but complete vehicle electrification is yet to achieve mass adoption.
Competitive rivalry: The market sees intense competition among global players to gain market share through new product launches and contracts with major automakers.
SWOT Analysis
Strength: Growing environmental awareness and stringent emission regulations drive the demand for electric vehicles.
Weakness: High manufacturing costs and limited driving range of electric vehicles hinder widespread adoption. Battery costs also remain a concern.
Opportunity: Government incentives and investments in charging infrastructure are expected to boost adoption. Growing capability of Li-ion batteries also provides opportunities.
Threats: Declining crude oil prices may reduce incentives for vehicle electrification. Delays in developing low-cost batteries are also a threat.
Key Takeaways
The Global Vehicle Electrification Market Size is expected to witness high growth during the forecast period. Asia Pacific dominates the global market currently due to the presence of major automotive hubs in China and government initiatives to promote electric vehicles for curbing pollution.
Regional analysis: Asia Pacific dominates the global vehicle electrification market, accounting for more than 40% market share in 2023. China leads the regional market due to large EV production and sales. Government support programs for EVs in China, Japan, South Korea, and India are boosting adoption.
Key players: Key players operating in the vehicle electrification market include 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. Major players are adopting strategies like new product launches, contracts, and geographical expansion to strengthen their global presence.
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