ZERO EMISSION VEHICLES MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Zero Emission Vehicles Market Size and Trends

The zero emission vehicles market is estimated to be valued at USD 357.12 billion in 2024 and is expected to reach USD 1,581.28 billion by 2031, growing at a compound annual growth rate (CAGR) of 23.70% from 2024 to 2031. The rapidly growing environmental concerns, supportive government policies, and initiatives towards promoting green vehicles are contributing to the high demand of zero emission vehicles Globally.

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The market is expected to witness a positive growth trend during the forecast period. Stringent emission norms by governments across regions to curb environmental pollution are driving the adoption of zero emission vehicles. Major automakers are heavily investing in electric vehicles to cater to the growing customer demand. Additionally, advancements in battery technologies are resulting in higher driving range and lower costs of electric vehicles, making them a feasible alternative to conventional vehicles. Developed markets in North America and Europe currently dominate the zero emission vehicles sales. However, the Asia Pacific region is expected to emerge as a major market during the forecast period supported by the rapid economic growth and initiatives by countries like China and India to promote clean mobility.

Environmental concerns

There is a growing concern among consumers and governments regarding the impact of vehicular emissions on the environment. Vehicles powered by internal combustion engines emit harmful gases such as nitrogen oxides, carbon monoxide, hydrocarbons, and particulate matter which are the major contributors to air pollution in many cities. The transportation sector accounts for a significant portion of overall carbon emissions and governments are actively working to reduce the carbon footprint of this industry. Many countries and states have enacted stricter emission norms over the past decade while also offering incentives to consumers to adopt cleaner vehicles.

In January 2023, First Hydrogen, a company focused on automobiles and energy, gave a sneak peek of its next-generation zero-emission vans. These new designs, a collaboration with EDAG Group, a renowned mobility engineering firm, were showcased in Generation II photos. EDAG, hired by First Hydrogen in 2022, is known for its expertise in global automotive development. The images reveal both front and back details of the latest vans, featuring a smart digital screen in the front with a unique daytime running light (DRL) configuration for a distinct identity and enhanced visibility.

Government policies play a major role in encouraging the adoption of new technologies in the automotive industry. Governments around the world are supporting the development and uptake of zero emission vehicles through various fiscal and non-fiscal incentives. They offer subsidies and tax rebates for purchases of electric vehicles to make them affordable for consumers. Some countries have implemented quotas for car manufacturers to ensure a minimum sale of green vehicles. Restrictive emission norms are being made more stringent over the years.

In January 2023, the California Energy Commission (CEC) approved a substantial funding of USD 2.93 billion for enhancing California's zero-emission transportation infrastructure. This funding, authorized in December 2022, aims to expand Electric Vehicle chargers, zero-emission vehicles, transit and school buses, and hydrogen refueling equipment. California is set to receive an additional 90,000 EV chargers, requiring an investment of USD 900 million. The state currently has around 80,000 EV chargers. A significant portion of the funding, USD 1.71 billion, is allocated for the infrastructure of medium- and heavy-duty Zero Emission Vehicles (ZEVs), following the California Energy Commission’s approval of zero-emission vehicle infrastructure and USD 1.42 billion in funding for 2021.