SOLAR VEHICLE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The global solar vehicle market size is estimated to be valued at US$ 172.62 billion in 2023 and is expected to reach US$ 789.81 billion by 2030, grow at a compound annual growth rate (CAGR) of 24.3% from 2023 to 2030. Solar vehicles are automobiles powered by solar energy through photovoltaic cells integrated into the vehicle. The solar cells convert sunlight into electricity to charge the battery, which runs the motor. Solar vehicles are zero-emission and eco-friendly with lower fuel costs compared to conventional vehicles. The key growth drivers of the solar vehicle market include government subsidies and incentives, declining costs of solar panels, rising fuel prices, and growing adoption of sustainable transportation.

The solar vehicle market is segmented by vehicle type, solar panel, EV type, component, charging type, and region. By vehicle type, the passenger vehicle segment accounted for the largest share of over 40% in 2022. Passenger vehicles include sedans, hatchbacks, and SUVs

Solar Vehicle Market Regional Insights

• North America: North America is expected to be the largest market for solar vehicle during the forecast period, accounting for over 45% of the market share in 2023 The growth of the market in North America is attributed to supportive government policies, rising fuel costs, and increasing adoption of solar technology in the region.
• Europe: Europe is expected to be the second-largest market for solar vehicle, accounting for over 22% of the market share in 2023. The growth of the market in Europe is attributed to stringent emission norms and rising demand for green transportation.
• Asia Pacific: Asia Pacific is expected to be the fastest-growing market for solar vehicle, growing with a CAGR of over 25% during the forecast period. The growth of the market in Asia Pacific is attributed to rapid urbanization, growing population, and increasing disposable incomes in the region.

Figure 1. Global Solar Vehicle Market Share (%), by Region, 2023

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Analyst Viewpoint: The solar vehicle market has strong growth potential driven by rising environmental concerns and push for renewable energy sources. Many countries are offering subsidies and tax benefits to boost adoption of electric vehicles which also complements solar vehicles. With falling battery prices and improving battery technologies, the driving range of solar vehicles is increasing thereby addressing a key consumer concern.

Solar Vehicle Market Drivers:

• Government Support for EVs and Renewable Energy: Governments globally are promoting electric vehicles through subsidies, tax rebates, and other incentives to reduce emissions and meet climate goals. Many countries have also set ambitious renewable energy This policy push for EVs and renewable energy is expected to accelerate the adoption of solar vehicles. Countries like China, Germany, the Netherlands, and California have already taken initiatives to build solar EV charging infrastructure. The regulatory support provides growth opportunities for solar vehicle manufacturers. For instance, according to the Ministry of New and Renewable Energy, on April 12, 2022, an update was made to the Scheme for Enhancing Flexibility in Operating Thermal and Hydroelectric Power Plants by combining them with Renewable Energy and Stored Power.
• Growing Adoption of Solar Technology: Solar energy has emerged as a major renewable energy source with falling costs of photovoltaic panels. Solar power is eco-friendly and provides energy security. Several automakers are leveraging advancements in solar technology to develop solar vehicles. The integration of flexible, lightweight solar cells enables them to efficiently harness solar energy during driving for powering the motor. The mainstreaming of solar power will drive the adoption of solar vehicles. For instance, according to Energy Efficiency and Renewable Energy in 2022, despite the prolonged challenges brought about by the COVID-19 pandemic, the off-grid solar sector made a remarkable recovery. During 2022, an astonishing 9.5 million off-grid solar products found buyers, and they collectively added 94 megawatts (MW) of capacity to the industry, marking a significant milestone in its growth.
• Rising Fuel Prices: The instability in oil supply and rising demand has led to surge in gasoline and diesel prices globally. This makes internal combustion engine vehicles more expensive to run. On the other hand, solar vehicles have lower running costs as the sun provides free energy for charging the batteries. The savings on fuel costs improve the value proposition of solar cars and two-wheelers. The high fuel prices encourage consumers to switch to more affordable solar vehicles. For instance, according to the Bureau of Transportation Statistics, between the months of January and June in 2022, there was a substantial increase in the price of regular motor gasoline, surging by 49%, while the price of diesel fuel experienced a slightly higher increase of 55%.

Solar Vehicle Market Opportunities:

• Product Development and Innovation: The solar vehicle market is still in its early stages with significant potential for product development and innovation. Opportunities exist to improve solar cell efficiency, storage capacity, powertrain performance, and vehicle design. Emerging technologies such as perovskite solar cells, solid-state batteries, and in-wheel motors can be leveraged to address range anxiety and performance issues. Further, light weighting through advanced materials and additive manufacturing can enhance efficiency. These innovations can help unleash the full potential of solar vehicles. For instance, the U.S. Department of Energy's Solar Energy Technologies Office (SETO) Small Innovative Projects in Solar (SIPS) 2022 Funding Program provides financial support for pioneering research and development initiatives in photovoltaic (PV) and concentrating solar-thermal power (CSP) technologies. The goal is to expedite the widespread advancement and implementation of solar technology on a large scale.
• New Business Models and Partnerships: The solar vehicle ecosystem involves partnerships between automakers, solar companies, battery suppliers, and charging infrastructure providers. New business models based on collaboration and open innovation can accelerate technology development and commercialization. Partnerships with solar panel manufacturers and charging network operators can help address range and infrastructure issues. Subscription-based services and solar charging stations can enhance the value proposition for users. For instance, in February 2022, the partnership established between Toyota Motor Corporation, a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan. Toyota is the largest automobile manufacturer in the world, producing about 10 million vehicles per year and Panasonic Holdings Corporation is a Japanese multinational electronics company, headquartered in Kadoma, Osaka is focused on creating batteries that are both highly competitive and cost-effective. These batteries will prioritize safety and offer outstanding quality and performance in terms of factors like capacity, output, durability, and more. This ensures that all customers can confidently utilize these batteries without any concerns.

Solar Vehicle Market Trends:

• Advancements in Solar Cell Technology: Ongoing R&D is improving solar cell efficiency, flexibility, and integration in vehicles. Techniques like thin-film transfer allow embedding solar cells into curved surfaces without compromising efficiency. Organic solar cells and perovskites promise better efficiency and lower costs compared to conventional silicon cells. These innovations are tailoring solar technology for automotive integration and making solar vehicles more viable. For instance, as per the findings of 2021 report from the International Renewable Energy Agency, the sales of electric vehicles equipped with built-in solar panels are projected to experience a yearly growth rate exceeding 12%. By the year 2030, these vehicles are expected to make up around 5% of the global passenger vehicle market.

• Growth in Solar Car Racing Events: Competitions like the World Solar Challenge have helped demonstrate practical applications of solar technology for vehicles. Such events encourage innovation in solar cells, batteries, and vehicle design. Companies test new concepts during these races. The participation has grown steadily over the years, indicating rising interest in solar electric transportation.

For instance, In India, there has been a growing demand for solar-powered auto-rickshaws, with data from the Ministry of New and Renewable Energy indicating that as of 2021, more than 51,000 of these units were in operation on the country's roads.

Solar Vehicle Market Restraints:

• High Initial Purchase Cost: The main barrier to large-scale adoption of solar vehicles is the high upfront cost compared to conventional cars. The additional cost of the solar system including panels, power electronics and installation increases the purchase price. This price premium limits uptake only to affluent and environmentally conscious buyers currently. Bringing costs down through mass production and technological improvements is vital.

Counterbalance: Solar vehicles generate no tailpipe emissions, distinguishing them as an eco-friendly alternative to traditional vehicles. This attribute can serve as a compelling selling feature for environmentally aware consumers, potentially leading them to consider paying a premium for a vehicle that contributes to a lower carbon footprint.

• Low Driving Range: Most solar vehicles today have range limitations between 100 to 400 miles. This range anxiety makes them unsuitable for long-distance driving. Intermittent sun exposure due to weather or parking also limits solar charging. Advances in battery technology are needed to increase range and fully utilize solar power.

Counterbalance: Although there have been significant advancements in battery technology, which have led to increased energy storage capacity, there remains a constraint on the maximum amount of energy that can be stored. This limitation can impose restrictions on the potential driving range of solar vehicles.

 Recent Developments

• In January 2022, Aptera Motors Corp. is an American crowd funded startup company based in Carlsbad, California unveiled a solar electric vehicle with a driving range of up to 1,000 miles. The three-wheeled car has solar panels that can provide up to 40 miles of charge per day. This ultra-efficient solar car aims to eliminate range anxiety.
• In September 2021, The Squad Solar is an innovative solar powered electric quadricycle from electric vehicle startup Squad Mobility from the Netherlands launched the solar-assisted Squad Solar City Car in the Netherlands. It has a solar range of up to 43 miles and an overall range of 100 miles when combined with a battery. The solar panels give free solar charge to users.
• In October 2020, Hyundai Motor Group, is a South Korean chaebol headquartered in Seoul, South Korea. The HMG also refers to the group of affiliated companies interconnected by complex shareholding arrangements, with Hyundai Motor Company regarded as the de facto representative of the group unveiled its IONIQ Concept Cabin which has a solar panel roof and can charge the battery. This demonstrates Hyundai's vision for sustainable mobility through solar energy.

Key Strategic Initiatives:

• In May 2022, Electra Meccanica, is a designer and manufacturer of electric vehicles with a three-wheeled EV as its flagship and only product partnered with Beyond Gravity is the space-oriented segment of the Swiss technology group RUAG. At a total of fourteen sites in Switzerland, Sweden, Finland, Germany, USA and Austria, Beyond Gravity employs around 1,265 people and posted sales of 339 million Swiss Francs in 2019 to integrate solar panels in its SOLO EV three-wheeler. This will extend driving range and lower dependence on charging infrastructure.
• In January 2022, Sono Motors GmbH is a German company working on the development of the electric solar car Sono Sion. A special feature of the vehicle designed by the company is solar cells embedded in the plastic body panels on both the roof and the sides acquired a former SAAB Automobile AB was a car manufacturer that was founded in Sweden in 1945 when its parent company, Saab AB, began a project to design a small automobile facility to start production of its Sion solar electric vehicle. The in-house production will enable faster market entry.
• In May 2021, Aptera Motors Corp. is an American crowd funded startup company based in Carlsbad, California partnered with EVX Pty Ltd is an Australian automotive and technology company focused on developing solar-powered electric vehicles. Founded in 2013, EVX has grown to become a leader in the emerging solar vehicle market to develop solar components and body parts for its solar electric vehicle. This strengthened Aptera's supply chain.

Figure 2. Global Solar Vehicle Market Share (%), by Component, 2023

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Top Companies in Solar Vehicle Market

• Tesla
• Sono Motors
• Lightyear
• Aptera Motors
• Squad Mobility
• EVX Pty Ltd
• ElectraMeccanica Vehicles Corp.
• Hyundai Motor Group
• Toyota Motor Corporation
• Audi
• Ford
• Volkswagen
• Mahindra & Mahindra
• Nissan
• General Motors
• BYD
• Renault
• Honda
• Tata Motors
• BMW

Definition: The solar vehicle market refers to the industry and ecosystem around automobiles powered fully or partially by solar energy. Solar vehicles have photovoltaic cells integrated into their body, which convert sunlight into electricity to charge batteries that run the motor. This provides clean and renewable solar power for propulsion instead of gasoline or diesel. The solar vehicle market is driven by factors such as pollution reduction goals, transition to sustainable transportation, advances in EV and solar technologies, and renewable energy adoption.

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