May 22, 2024
Vehicle Electrification Market

Growing Adoption of EV Propels Vehicle Electrification Market Forward

The Vehicle Electrification Market is estimated to witness high growth owing to increasing adoption of electric vehicles. Vehicle electrification refers to the electrification of accessories or systems in conventional internal combustion engine vehicles and adoption of hybrid powertrains. Several automakers are integrating electric powertrains into their vehicles to provide better performance and fuel efficiency. Electrified vehicles have far fewer moving parts and are less complex than conventional combustion engine vehicles. They require less maintenance and have lower operating costs. Growing environment awareness and stringent emission norms are compelling automakers to focus on developing electric vehicles.

The global Vehicle Electrification Market is estimated to be valued at US$ 97.25 Mn in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the Vehicle Electrification Market are 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.

The key opportunities in the Vehicle Electrification Market Demand include increasing hybrid vehicles and rising investments by automakers in electric mobility. Several companies are focusing on developing advanced battery technologies with higher power density and longer life to provide more range to EVs.

On the technological front, there is an ongoing shift towards developing durable and efficient drive transmission, motor component, electric braking system, battery management system, and electric power steering system for electrified vehicles. Several startups are working on developing vehicle to grid (V2G) technology that enables bi-directional power transfer between electric vehicles and the power grid.

Market Drivers
Stringent emission norms: Stricter emission regulations worldwide are compelling automakers to focus on developing low or zero emission vehicles. Many countries have set target dates to phase out combustion engine vehicles.

Falling battery prices: Continuous drop in battery prices is increasing the affordability of electric vehicles. This is boosting adoption particularly among price sensitive customers.

Increasing charging infrastructure: Growing public and private charging stations are alleviating range anxiety among drivers and encouraging EV adoption. Many countries are offering subsidies and tax rebates for setting up EV charging stations.
Challenges in the Vehicle Electrification Market

The Vehicle Electrification Market faces several challenges related to high development costs, range anxiety among customers, lack of standardization and scaling of technologies. Developing electric drivetrains requires huge investments in R&D as well as establishing manufacturing infrastructure which increases the costs. There is still a lack of consensus on the type of battery technologies, power electronics etc. This leads to technology lock-ins and hinders innovations. Customers are also wary of limited driving range offered by electric vehicles which impacts adoption rates. Developing quick and standardized charging infrastructure across regions is critical but remains a challenge. Overall scaling EV technologies to mass market levels and bringing down costs will be a gradual process over the forecast period.

SWOT Analysis
Strength: Higher efficiency and lower operating costs compared to ICE vehicles. Supportive regulatory policies and incentives driving electrification.
Weakness: Higher upfront purchase costs. Range anxiety and lack of standardized fast charging infrastructure.
Opportunity: Continued technology advancements improving performance. Growing customer acceptance and adoption leading to new use cases and business models.
Threats: Slow and inconsistent pace of establishing charging infrastructure networks. Delays in cost parities with petrol/diesel vehicles could impact targets on emissions.

Geographical Regions
North America dominated the Vehicle Electrification Market in 2024 with a share of over 30%, backed by supportive policies and EV subsidies/incentives in countries like the US and Canada. Presence of leading automotive OEMs and technology companies is accelerating electrification programs.

The Asia Pacific region is expected to witness the fastest growth during the forecast period, expanding at a CAGR of around 8%. Nations like China, Japan and South Korea are prioritizing developments in new energy vehicles as part of their economic agendas. Rising consumer demand for electric mobility solutions will drive the market in the key emerging economies.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it