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%. Increasing focus toward range efficient tires and increasing penetration of electric vehicles, paired with strong government push to reduce greenhouse gas emissions are anticipated to increase the demand for electric vehice tires all over the world.
Electric Vehicle Tires Market:
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.
Passenger Cars segment is expected to have largest share in the global electric vehicle tires market
The passenger cars segment is expected to hold the largest share of the electric vehicle tires market during the forecast period. The demand for electric vehicle tires among several automotive manufacturers is rising to help increase EV sales due to the focus on reducing CO2 emissions from passenger cars. Tire manufacturers are working closely with the automakers to develop and provide EV tires for passenger cars. In June 2022, Hyundai Motor Group and Michelin announced a collaboration up to 2025 to develop the next-generation tires for premium electric vehicles. In January 2023, Pirelli & C. SpA announced that it would be supplying P Zero Elect tires for the BMW i4 M50. In addition, vehicle utilization is on the rise in developing economies due to increasing cab-sharing facilities, which will create growth opportunities for the market.
“The North America electric vehicle tires market is projected to the fastest growth by 2030.”
North America is estimated to be the fastest growing electric vehicle tires market by 2030. US is home to the big three vehicle manufacturers, including Ford (US), General Motors (US), and Tesla (US). The growing demand for electric passenger cars and luxury SUVs, and the increasing adoption of electrification in the logistics and transport sector are boosting the market in the US. Government subsidies, policies, and tax rebates are driving the sales of electric vehicles, which will increase demand for electric vehicle tires. Telsa Model Y was the highest-selling electric vehicle in the US in 2022. Various tire manufacturers focus on production expansions to cater to the increasing demand for electric vehicle tires. In August 2022, Bridgestone Corporation announced an investment of USD 550 million to increase tire production capacity at the Warren County facility in the US. Similarly, in September 2022, The Goodyear Tire & Rubber Company announced an investment of USD 125 million to expand the manufacturing unit in Kansas, US. All these developments indicate the strong growth of the market in North America.
Key Market Players
The global electric vehicle tires market is dominated by major players such as Michelin, Bridgestone Corporation, The Goodyear Tire & Rubber Company, Continental AG, Pirelli & C. SpA, and Sumitomo Rubber Industries, Ltd., among others.
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