The low-speed electric vehicles sector generated a revenue of US$ 5,526.65 million in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 5.5% from 2022 to 2030, reaching an estimated US$ 8,489.94 million by 2030.
Increasing Affordability of Electric Vehicles Fuels Growth in the Low-Speed Electric Vehicles Market
The primary expense associated with electric vehicles is largely attributed to the cost of batteries. The elevated prices of battery packs contribute significantly to the overall cost of electric vehicles. However, as efforts to enhance electric vehicle infrastructure progress, the costs associated with lithium-ion battery packs are declining. Ongoing government initiatives aimed at domestic battery production are reducing reliance on international suppliers, thereby lowering the production costs of electric vehicles. For example, Ola Electric has entered into a strategic partnership with the Government of Tamil Nadu to create an electric vehicle hub, which is expected to include facilities for manufacturing electric vehicle batteries and cells. In North America, there has also been a push to develop local battery production capabilities. In 2022, Northvolt secured EUR 155.4 million (approximately US$ 165.79 million) from the German government to build a large-scale electric vehicle battery-cell production facility. Additionally, Envision AESC has partnered with BMW to set up a battery plant in South Carolina with an annual production capacity of 30 GWh. Consequently, the increasing accessibility of cost-effective battery packs is making electric vehicles more affordable, thereby propelling the growth of the low-speed electric vehicles market.
The rise in low-speed electric vehicles is also contributing to job creation. The electric vehicle sector demands a skilled workforce, and as the industry expands, it is generating numerous employment opportunities. Furthermore, the growing use of low-speed electric vehicles in utility-scale applications across sectors such as mining, construction, defense, and agriculture is significantly enhancing prospects for the low-speed electric vehicles market.
The Asia Pacific region holds the largest share of the low-speed electric vehicles market, with China being the leading country in this sector. Factors such as technological advancements, the availability of inexpensive raw materials, and a cost-effective labor force are driving the growth of the low-speed electric vehicles market in China. Meanwhile, North America and Europe are also witnessing a favorable trend in low-speed electric vehicle sales, supported by government initiatives and favorable policies that encourage the adoption of these vehicles.
The European Union has implemented crucial measures to tackle carbon emissions within the automotive industry. In March 2023, new CO2 regulations were established for cars and vans, requiring a 55% reduction in emissions for new cars and a 50% reduction for new vans by 2030, relative to 2021 levels, with an ambitious goal of achieving a 100% reduction for both categories by 2035. Additionally, the EU has introduced the Net Zero Industry Act, which aims for EU battery manufacturers to meet nearly 90% of the region's annual battery demand, targeting a manufacturing capacity of at least 550 GWh by 2030. Although Europe accounts for over 25% of global electric vehicle production, its involvement in the electric vehicle supply chain is limited, particularly in cobalt processing, which stands at 20%. Nevertheless, the well-established electric vehicle market in Europe, combined with these ambitious regulatory frameworks, is driving the growth of the low-speed electric vehicles market in the region.
Competitive Landscape and Key Developments in the Low-speed Electric Vehicles Market
Key players in the low-speed electric vehicles market include Textron Inc, Yamaha Motor Co Ltd, Club Car, The Toro Co, Renault SA, Star EV, Waev Inc., Bradshaw Electric Vehicles, Clean Motion AB, and Navya SA. Additionally, several other significant players in the low-speed electric vehicles market have been analyzed to provide a comprehensive overview of the market and its ecosystem.