ELECTRIC VEHICLE TIRE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Electric Vehicle Tire Market Size and Trends

The global electric vehicle tire market is estimated to be valued at US$ 3.42 Bn in 2024 and is expected to reach US$ 13.71 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 21.9% from 2024 to 2031.

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Various factors such as rising demand for electric vehicles due to stringent emission norms and growing environmental concerns are fueling the demand for electric vehicle tires.

Market Driver - Technological advancements in tire manufacturing for EVs

Rapid technological advancements in tire manufacturing is a key driver behind the growth of the electric vehicle tire market. With increasing popularity of EVs across the world, tire manufacturers are focusing on developing specialized tires specifically designed for electric vehicles. As compared to conventional vehicles, electric vehicles are heavier due to large batteries. They also require different gripping ability due to heavy torque generated by electric motors.

To cater to these unique requirements of EVs, tire makers are investing heavily in research and development. New silica and rubber compounds are being experimented to provide better traction and handling abilities in all driving conditions. Silica improves the silica reinforcement of the tires giving a superior handling balance. Meanwhile, advanced rubber compounds help in reducing the rolling resistance of tires which directly impacts the mileage of electric vehicles. Lower rolling resistance enables electric vehicles to run longer on single charge.

Furthermore, continuous tread designs and different tread patterns are optimized to dissipate heat generated in tires more efficiently. Unlike fuel-powered vehicles, braking system in electric vehicles relies more on regeneration which produces significant heat. Advanced tire designs ensure effective heat removal without compromising on other performance aspects. Some tire manufacturers have also started using green, renewable materials in tire manufacturing which align well with the sustainability aspect of electric mobility.

Market Concentration and Competitive Landscape

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Rising Demand for Long-Lasting and Fuel-Efficient Tires for EVs

With growing concerns over rising fuel costs and emissions from gasoline vehicles, many consumers as well as fleet operators are switching to electric vehicles. As EVs are becoming popular for their lower running costs compared to internal combustion engine vehicles, users expect their tires to offer high mileage and fuel efficiency as well. This rising demand for durable and efficient tires is acting as another key driver for electric vehicle tire market.

EV owners want their tires to last long in order to avoid frequent replacements which otherwise adds to the total cost of ownership. Hence, many are willing to pay more for tires that offer higher tread life. This is encouraging tire manufacturers to focus on developing long-lasting tread compounds and robust tire construction. Advanced silica and polymer additives are making tires more durable from inside. Similarly, optimized tread patterns are improving outer toughness of tires.

At the same time, low rolling resistance of tires retains importance for electric vehicle drivers trying to extract maximum range from each battery charge. Efficient tires help save energy and extend driving range. This factor has spurred innovations around low-heat, enhanced grip and hydroplaning resistant tires. Overall, demand for value and sustainability is fostering continuous product differentiation in the EV tire segment. The new specialized tires are catering to varied performance as well as cost-saving needs of electric vehicle owners.

Key Takeaways from Analyst:

The rising adoption of electric vehicles worldwide is the primary driver boosting demand for EV tires. Stringent emission regulations aimed at curbing air pollution and investments in EV infrastructure by many governments are further accelerating EV sales. As EVs see higher acceptance, replacement of tires will emerge as a new revenue stream for tire manufacturers. Additionally, EV tires require specialized tread compound and thread pattern optimized for electric vehicles' instant torque and higher weight. This places tire makers focusing on developing innovative tires specifically designed for EVs.

However, high battery and component costs continue to hamper mass-level EV adoption, thereby restraining the electric vehicle tire market's growth to some extent. Also, lack of standardization in battery technology challenges tires compatible with multiple EV models. Moreover, replacing traditional internal combustion engine vehicles with EVs will be a gradual process. On the positive side, opportunities lie in the Asia Pacific region's fast-growing EV industry. Countries like China and Japan are frontrunners in this transition and represent major markets. Collaborations between tire and automakers are another potential avenue to gain insights into specialized tire requirements of different EV models. Overall, with EV sales projected to rise dramatically worldwide, electric vehicle tires are poised for massive expansion in the future globally.

Market Challenge - High initial investment in EV tires due to advanced technology

One of the major challenge faced by the global electric vehicle tire market is the high initial investment required for EV tires due to the advanced technology used in them. Electric vehicles run at high speeds for long durations needing tires that can withstand significant wear and tear over longer usage cycles compared to conventional vehicle tires. Manufacturing such durable tires incorporating latest materials science and advanced production processes drives up their costs. The specialized tread designs and thread patterns in EV tires optimizing road adhesion and grip for sudden torque and power delivery in EVs adds to their price tag. Further, lack of standardization in EV tire sizes across models and manufacturers complicates mass production and economies of scale, maintaining their premium pricing. As average consumers remain price sensitive, high sticker costs of EV tires acts as a deterrent for global electric vehicle adoption if not subsidized, restricting market expansion in price sensitive regions.

Opportunity - Development of retreading technologies for EV tires for market

One of the major opportunities available for the global electric vehicle tire market is the development of retreading technologies suitable for EV tires. As EVs gain mainstream acceptance, the installed base of tires on electric vehicles will keep growing over the next decade. While premium prices of new EV tires hamper aftermarket prospects, retreading worn out casings can help lower the overall lifetime ownership costs and make electric mobility more affordable. Innovation in retreading compounds, processes and equipment adapting to unique material properties and wear patterns in EV tires can open up a huge secondary market. Establishing collection and recapping infrastructure along with performance guarantees will boost customer confidence in remolded EV tires. This provides an ideal opportunity for companies to expand product offerings as well as establish sustainable recycling practices catering to the emerging needs of electric vehicle industry.

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Insights By Vehicle Type - Vehicle Range Anxiety Diminishing

In terms of vehicle type, the battery electric vehicles (BEVs) segment is expected to contribute 66.7% share of the market in 2024 owing to improving battery technologies that are continuously alleviating range anxiety concerns among consumers. With each passing year, BEVs are able to travel farther on a single charge due to advancements in battery density and chemistries. This has made BEVs a more viable option for daily commuting and trips within cities. Government initiatives promoting BEV adoption have further boosted confidence in electric drive trains. Meanwhile, automakers have focused on pairing greater vehicle range with performance and features comparable to gasoline counterparts. These collective efforts have assuaged drivers' apprehensions about being stranded mid-journey. As a result, more consumers feel comfortable operating BEVs for all routine mobility needs. This growing acceptance and preference for BEVs over other electric vehicle types sustains their market leadership position.

Insights By Tire Size - Standardization is Key

In terms of tire size, the 16 to 20 inches segment is expected to contribute 54.1% share of the market in 2024 owing to standardization across multiple vehicle classes. Tires in this size range conform to the dimensions of most family-sized passenger cars, SUVs and light trucks. Their "one size fits many" practicality appeals to both automakers seeking to optimize production and drivers desirous of hassle-free serviceability. Aftermarket retailers also stock 16 to 20 inch replacements in bulk to serve a diverse set of nameplate vehicles. Greater economies of scale in manufacturing further bring down costs for OEMs as well as consumers. This popularity stems also from the fact that 16 to 20 inch rims offer an ideal balance between handling stability and ride quality over varied terrains. Their prevalence has made the segment a mainstay, relegating unconventional sizes to niche applications.

Insights By Sales Channel - Original Equipment Replacement Cycle

In terms of sales channel, the original equipment manufacturers (OEM) segment is expected to contribute 61.5% share  in 2024 due to the replacement cycles integral to auto manufacturing. New vehicles roll off assembly lines fitted with original tires as standard equipment. Within a few years, these set of tires will wear out necessitating replacements. Automakers leverage their first-fit contracts to capture this lucrative post-warranty business. Dealerships also promote OEM-branded replacements during routine service. While independent retailers vie for the aftermarket, brand loyalty and convenience keep a sizable portion of replacement demand within automaker networks. Moreover, as zero-emission drivers becomes the norm, OEMs have an unparalleled opportunity to cultivate lasting relationships and after-purchase revenue through their electric lineup. This ensures the OEM segment continues extracting value from electric fleets over their usable lifespan.

Regional Insights

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In North America, the dominance in the Electric Vehicle Tire market is primarily underpinned by the region's robust electric vehicle (EV) ecosystem with 41.2% share in 2024, which includes substantial investments from both government and private sectors in EV infrastructure and technology. The presence of key automakers and tire manufacturers, who are increasingly focusing on developing tires optimized for electric vehicles, propels this market segment. Furthermore, consumer preference towards EVs driven by environmental concerns and the availability of government incentives for EV adoption fuel the demand for electric vehicle tires, thereby affirming North America's dominant position.

Meanwhile, the Asia Pacific region exhibits the fastest growth in the electric vehicle tire market, a trend attributed to several factors. The region is experiencing an automotive industry transformation, driven by the rapid adoption of EVs, especially in countries like China, Japan, and South Korea. These countries not only have large automotive markets but also strong government backing for EVs through subsidies and policies aimed at reducing carbon emissions. Additionally, Asia Pacific is home to some of the world's largest tire manufacturers, and these companies are investing heavily in R&D to produce energy-efficient tires that are suitable for the new generation of electric vehicles. This, combined with increasing awareness about the benefits of EVs, improvements in charging infrastructure, and a growing middle-class population, positions the Asia Pacific region at the forefront of growth in the electric vehicle tire market.

Market Report Scope

Electric Vehicle Tire Industry News

• In October 2023, Pirelli & C. SpA, the renowned Italy-based tire manufacturer, entered into a joint venture with Saudi Arabia’s Public Investment Fund (PIF) to establish a tire manufacturing facility in Saudi Arabia. Scheduled to commence operations in 2026, the plant will produce high-quality tires for passenger vehicles.
• In September 2023, Sumitomo Rubber Industries, Ltd., a leading global tire manufacturer, introduced a new all-weather touring tire named Aklimate. This tire incorporates advanced 4D Nano Design technology to enhance wet handling and snow traction.
• In February 2023, Bridgestone Corporation, a major global tire and rubber company, revealed plans to invest USD 72.4 million by 2025 to boost production capacity and enhance technology at its Pune plant. This investment will enhance the plant's capabilities for producing passenger car tires.
• In June 2022, Michelin, a leading global tire manufacturer, signed a partnership with Hyundai Motor Group to develop advanced-generation tires specifically designed for battery electric vehicles (EVs). This agreement focuses on creating eco-friendly tires that significantly enhance the use of sustainable materials and includes the development of a tire monitoring system to analyze wear and various road conditions. These next-generation tires are expected to feature in future premium EV models from Hyundai Motor Group.

*Definition: The global electric vehicle tire market refers to the market for tires that are designed and manufactured specifically for mounting on electric vehicles such as electric cars, hybrid vehicles, plug-in hybrid vehicles, and neighbourhood electric vehicles. Electric vehicle tires are engineered to be more energy efficient with lower rolling resistance to allow electric vehicles to travel longer distances per charge.

Market Segmentation

• Vehicle Type Insights (Revenue, US$ Bn, 2019 - 2031)
• • Battery Electric Vehicles (BEVs)
  • Plug-in Hybrid Electric Vehicles (PHEVs)
•  Tire Size Insights (Revenue, US$ Bn, 2019 - 2031)
• • 16 to 20 inches
  • Less than 16 inches
  • Above 20 inches
•  Sales Channel Insights (Revenue, US$ Bn, 2019 - 2031)
• • Original Equipment Manufacturers (OEMs)
  • Aftermarket
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Apollo Tyres
  • Bridgestone Corporation
  • Continental AG
  • Falken Tire
  • Goodyear Tire and Rubber Company
  • Hankook Tire and Technology Co., Ltd.
  • Michelin
  • Nokian Tyres plc
  • Pirelli & C. S.p.A.
  • Sumitomo Rubber Industries, Ltd.
  • The Cooper Tire & Rubber Company
  • Toyo Tire Corporation
  • Trelleborg AB
  • Yokohama Rubber Co., Ltd.
  • Zhongce Rubber Group Company Limited