The global EV test equipment market size is projected to grow from USD 79 million in 2022 to USD 242 million by 2027, at a CAGR of 25.2%. Factors such as increasing pollution and the threat of global warming have accentuated the need to replace petroleum-fuel vehicles with emission-free substitutes. The increasing demand for electric vehicles is expected to fuel the growth of the market for electric vehicle testing equipment and related components.
EV Test Equipment Market Dynamics:
How advancements in battery technology increase the growth of EV test Equipment market?
The battery is a major component in an electric vehicle. The majority of electric vehicles use either a lithium-ion family battery or a lead-acid battery. New developments in battery chemistry are expected to help increase the efficiency of lithium-ion batteries and test systems for these innovative battery packs. This is expected to boost the demand for EV test equipment.
Research is underway to increase the range of electric vehicles and reduce costs. Thus, various OEMs have started offering electric vehicles with a range of more than 300-350 km and long battery life. The research focuses on conventional lithium-ion, solid-state, advanced lithium-ion using an intermetallic anode (silicon alloy composite), and future advanced lithium-ion (lithium metal, including lithium-sulfur and lithium-cobalt) batteries with innovative designs and chemistries. Such rapid developments in battery technologies are expected to lead to the demand for new and advanced battery testing systems/platforms/software, thereby driving the EV test equipment market.
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Why is decrease in subsidies for EVs in major Markets is a critical restraining factor that is holding back growth of market?
Purchase subsidies for EVs were reduced in key markets such as China and France. For example, the Chinese Ministry of Finance announced plans to reduce subsidies associated with electric cars by approximately 30% by 2022. However, vehicles for public transport and those costing below USD 42,000 are expected to continue to receive subsidies, with the new rules only affecting luxury car brands. As the Chinese Ministry of Finance only provides subsidies for cars with high battery capacities, EV battery manufacturers must provide electric vehicles with high-capacity batteries to ensure that the vehicles fall are in the subsidized range. This is expected to affect EV sales, as subsidies are the most important reason for customers from emerging economies to buy electric vehicles. The decline in sales is expected to affect the EV test equipment market.
Key Market Players:
The EV test equipment market is dominated by established players such as AVL (Austria), TUV Rheinland (Germany), Durr Group (Germany), Chroma ATE (Taiwan), and HORIBA LTD.(Japan).
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