Vehicle electrification refers to the adoption of electric powertrains in vehicles including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs). Major applications of vehicle electrification include passenger cars and commercial vehicles. Governments across the globe are formulating stringent regulations to curb emissions and promote the adoption of electric vehicles. For instance, the European Union introduced fines for automakers if their fleets exceeded the mandated emission thresholds. Rising demand for zero-emission mobility coupled with supportive governmental policies is fueling investment in electrification technologies by automakers.

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 Dynamics:
The rising government policies and regulations promoting electric vehicles is a major driver of growth in the vehicle electrification market. Most nations have introduced subsidies, tax rebates and other financial incentives for electric vehicles buyers. For example, the US government offers a federal tax credit of up to $7,500 per electric vehicle under certain income limits. Additionally, states like California provide high occupancy vehicle (HOV) lane stickers, rebates, and other non-financial incentives. These favorable policies are encouraging more consumers to switch from conventional vehicles to electric vehicles. However, the lack of charging infrastructure is currently limiting the mass adoption of electric vehicles which needs to be addressed to fully tap the market potential. OEMs are actively working with governments and private players to build public charging networks to alleviate range anxiety among buyers.

SWOT Analysis

Strength: Vehicle electrification provides opportunities for automakers to reduce emissions and meet stringent emissions regulations being imposed by various governments globally. With better technology, electric vehicles are getting improved driving range on a single charge which is reducing range anxiety among consumers. Falling battery prices are making electric vehicles more affordable for mass markets.

Weakness: High upfront cost of electric vehicles is a major deterrent for many consumers to switch from conventional vehicles. Lack of standardization for EV charging infrastructure is hampering widespread adoption of electric vehicles across different geographies. Range limitations of EVs is another concern for long distance travel until fast charging technologies see more advancements.

Opportunity: Stringent government policies and regulations regarding internal combustion engine vehicles are encouraging global automakers to boost investments in electric vehicles. Development of robust charging networks can unlock true potential of EVs in the mass market. Advancements in battery technologies are extending driving range of EVs closer to gasoline vehicles to change consumer mindsets.

Threats: Uncertain geopolitical situations and trade wars can negatively impact supply chains and availability of critical battery raw materials. Slow progress of standardization in EV battery technologies and charging infrastructure can delay mass adoption. Delay in setting up of charging infrastructure in developing countries pose challenge to market growth.

Key Takeaways

The Global Vehicle Electrification Market Size is expected to witness high growth in the coming years. The Asia Pacific and government support for electric vehicles in countries like China. Stringent emission norms in countries like China and India are propelling automakers to boost investments in developing electric vehicles.

Europe is also a major market for electric vehicles due to supportive regulations and incentives for electric vehicles adoption in countries like Germany, France, Norway etc. Presence of major automakers in the region focusing on electric vehicles is helping the Europe market grow at a rapid pace.

Key players operating in the vehicle electrification market are 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. The listed players are focusing on testing, inspection and certification services for electric vehicle components and technologies to capitalize on the fast growing electric vehicle industry globally.

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