VEHICLE ELECTRIFICATION MARKET ANALYSIS

Regional Analysis

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Asia Pacific has been the dominant player in the vehicle electrification market for years and is expected to hold the largest share of 52.20% in 2024, due to China which has emerged as the fastest growing regional market in recent times. Aggressive targets set by the Chinese government to increase electric vehicle production and use have accelerated investments and innovations in the industry. Several new EV startups are coming up in China which are making affordable electric cars that appeal to local customers. At the same time, established automakers like BYD and SAIC are rapidly expanding their electric model lineups. China's large automobile market size and growing preference for new technologies among consumers have accelerated this shift towards electrification. In addition, lower costs of manufacturing EVs in China compared to other regions have made them more competitive in global markets as well. As a result, China has overtaken other regions to become the largest EV market and is surpassing production targets well ahead of schedule.

However, North America is expected to have the highest CAGR of 12.27% in 2024. The large presence of major automotive OEMs like Tesla, GM, and Ford have driven significant investments in research and development of electric technologies. With their headquarters and major manufacturing facilities located in the U.S. and Canada, these companies have been at the forefront of developing electric vehicles. In addition, supportive government policies like tax incentives and emissions regulations have encouraged higher adoption of electric vehicles in the region. As a result, North America accounts for the largest share of electric vehicle sales globally.

While the U.S. and Europe have strong automotive industries and customer demand remains robust, suppliers in these regions are facing challenges from low-cost yet innovative Chinese manufacturers. However, established North American and European suppliers continue leveraging their engineering expertise and quality standards to target high-value segments. Nonetheless, China's aggressive focus on developing a local EV supply chain presents opportunities for partnerships that can help global suppliers access that fast-growing market as well.