The global electric vehicle tires market size is projected to grow from USD 2.8 billion in 2023 to USD 11.2 billion by 2030, at a CAGR of 21.7%. The rise in focus towards e-mobility is expected to increase the demand for electric vehicle tires. Also, the strong policies set by the regulatory bodies and governments to combat carbon effluents from passenger and commercial vehicles is anticipated to promote the revenue growth of electric vehicle tires market.
Electric Vehicle Tires Market Dynamics:
Driver: Growing demand for better fuel efficiency
Rolling resistance is the force that opposes the forward motion of a tire as it rolls over a surface. It is caused by a combination of factors, including tire deformation, air resistance, and friction with the road. The higher the rolling resistance, the more energy is required to overcome it, which means that tires with high rolling resistance will reduce fuel efficiency and increase emissions. Tire rolling resistance significantly impacts fuel consumption, especially for electric vehicles. According to Michelin, a 30% increase in rolling resistance can reduce the range of an electric vehicle by up to 5%. Michelin also states that the Michelin e.Primacy tires can increase the range of an electric vehicle by up to 7%. The lower the rolling resistance, the less energy the tire needs to move, which can lead to improved fuel efficiency. In the long run, the use of electric vehicle tires turns out cost-effective, as the extra cost paid for the electric vehicle tires is recovered by savings made on fuel expenses. Many governments around the world are implementing stricter fuel efficiency and emissions regulations. This drives the demand for low-rolling resistance tires for all types of vehicles, including electric vehicles. The increasing stringency of fuel efficiency regulations, such as the National Highway Traffic Safety Administration (NHTSA), has increased the demand for low-rolling resistance tires.
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Opportunity: Increasing demand for replacement tires
The demand for electric vehicle tires is increasing among various automotive manufacturers, i.e., at the Original Equipment (OE) level. The replacement tires market is expected to provide opportunities for manufacturers in the future. The demand for replacement tires is expected to rise during the forecast period due to the higher vehicle utilization against the backdrop of an increase in cab-sharing facilities globally. The logistics industry is a major consumer of fuel. As the industry grows, there is a high demand for fuel-efficient vehicles and electric commercial vehicles. Electric vehicle tires can help improve the fuel efficiency of vehicles, reducing the environmental impact of the logistics industry. As disposable incomes rise, consumers are more likely to replace their tires before they wear out. New tire technologies that offer improved fuel efficiency, performance, and safety are also being developed, driving the demand for electric vehicle replacement tires. The replacement EV tires market is driven by the increasing availability of EV tires. In the past, EV tires were difficult to find and expensive. However, as the EV market has grown, more tire manufacturers have begun to produce EV tires. This has made EV tires more affordable and accessible, driving the growth of the replacement EV tires market.
Heavy Commercial Vehicles segment is estimated to exhibit the fastest growth in global electric vehicle tires market
The heavy commercial vehicles (HCVs) is expected to be the fastest growing segment in electric vehicle tires market during the forecast period. Heavy commercial vehicles are used to transport heavy goods and include heavy-duty trucks, trailers, and towing trucks. The weight-carrying capacity of heavy trucks is more than that of LCVs. Heavy trucks have more than four tires. Government policies are focusing on reducing emissions from heavy commercial vehicles and pushing the OEMs to create electric HCVs, which will cater to the sustainable transport of goods. Electric vehicle tires offer more fuel efficiency, better traction on wet and icy surfaces, and a longer lifespan than traditional tires. This can save money on replacement costs, especially for vehicles used for hauling. Many manufacturers, such as Volvo and Mercedes-Benz Trucks, have released electric heavy commercial vehicles. For instance, Volvo (Sweden) released FH Electric, FM Electric, and FMX Electric in 2023 and already have other electric offerings in their catalog, while Mercedes-Benz Trucks (Germany) will be releasing the battery electric long-haul HCV, eActros 600 in October 2023. US and Europe have stringent regulations and standards for vehicle safety, including tire quality and maintenance. These regulations encourage the use of higher-quality tires designed to be more durable and efficient, which will drive the market. The environmental regulations for the reduction of CO2 emissions across the globe are expected to drive the demand for electric vehicle tires in heavy trucks.
Germany to lead the electric vehicle tires market in Europe
Germany is expected to be the largest market in Europe for electric vehicle tires during the forecast period. Germany is considered the hub of the automotive industry and the largest producer of passenger cars. Increasing sales of electric passenger cars is the key driving factor for electric vehicle tires in Germany. The advancement of the automotive industry in Europe is another key factor impacting the growth of the electric vehicle tires market in the region. This contributes to the high growth of the electric vehicle tires market in the region. Increasing government initiatives regarding controlling carbon emissions are boosting the sales of electric vehicles in Europe, which will boost the electric vehicle tires market in the region. In March 2023, Norway became the first country in the world to announce a ban on the sale of new petrol and diesel cars from 2025. Other European countries, such as the UK, Denmark, and Sweden, have also announced plans to ban the sale of new ICE vehicles by 2030 or earlier.
Key Market Players
The electric vehicle tires market is dominated by global players such as Michelin (France), Bridgestone Corporation (Japan), The Goodyear Tire & Rubber Corporation (US), Continental AG (Germany), and Pirelli & C. SpA (Italy), Sumitomo Rubber Industries, Ltd. (Japan), among others. These companies adopted new product development strategies, expansion, partnerships & collaborations, and mergers & acquisitions to gain traction in the market.
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