The Electric Off-Road Vehicle market is projected to reach US$ 2,234.0 million by 2028 from US$ 724.1 million in 2021; it is expected to grow at a CAGR of 18.9% from 2022 to 2028.
The rise in demand for electric off-road vehicles is primarily driven by their environmental benefits. Since electric vehicles run on electricity, they do not emit any harmful gases or smoke into the environment, making them environmentally friendly. The European Environment Agency recently published a report indicating that air pollution is the most significant environmental risk to health in Europe, causing over 400,000 premature deaths every year. Heart disease and strokes are the leading causes of premature deaths due to air pollution, followed by lung cancer and diseases. Asthma, reduced lung function, and pregnancy-related issues are other health impacts attributed to air pollution. Road transport, which was responsible for 39% of atmospheric nitrogen oxides (NOx) and 11% of particulate matter (PM10 and PM2.5) emissions in 2015, is a significant contributor to air pollution. The growing awareness of these harmful impacts has led to an increased demand for electric vehicles, which is expected to drive the growth of the global electric off-road vehicle market in the future.
Impact of COVID-19 Pandemic on Electric Off-Road Vehicle Market Growth
The COVID-19 pandemic had severe repercussions on various industries, including the all-electric off-road vehicle market. In response to the pandemic, governments worldwide imposed lockdowns and travel restrictions, which significantly impacted the manufacturing and sales of electric off-road vehicles. The decrease in production in 2020 resulted in a corresponding decrease in the distribution of electric off-road vehicles. Closure of automobile and components production facilities, a decline in footfall in recreational spots, and temporary movement restrictions imposed by governments all contributed to a significant decline in outdoor recreational activities, which negatively affected the electric off-road vehicle market size. Additionally, the global price rise of lithium and the semiconductor shortage also contributed to a rise in component prices, leading to higher electric off-road vehicle prices. Although the manufacturing of these vehicles resumed in Q4 of 2020, demand remained low, causing the electric off-road vehicle market size to decline.
The electric off-road vehicle market in North America was dominated by the US, which has the largest consumer base for outdoor recreational activities, providing significant growth prospects for electric off-road vehicle manufacturers. The increasing inclination of tourists and sports enthusiasts toward off-road vehicle trails, including utility terrain vehicles (UTVs) and all-terrain vehicles (ATVs), and related sports and recreational activities, is driving the growth of the region's electric off-road vehicle market. Some leisure activity organizers and tourism councils are even constructing tracks and sports setups to attract and retain visitors. In the US, numerous public lands and state parks offer miles of roads and trails for ATV rides and sightseeing. To make it easier for people, some parks have even enabled online permits. For instance, The Florida State Forest Service has a range of terrains, high-altitude mountain paths, and sand dunes to suit any level of experience or preference. This trend of catering to thrill-seekers is expected to provide ample opportunities for the electric off-road vehicle market to grow.
The adoption of electric off-road vehicles has been observed in the agricultural and military sectors. For example, Deere, a prominent US-based manufacturer of farm and agricultural equipment, recently introduced UTV models specifically designed for farming applications. In addition, Deere updated its Gator Utility Vehicles (UVs) line in September 2020, driven by the high demand for vehicles from the agriculture sector for various applications. Similarly, due to increased military budgets and rising geopolitical tensions worldwide, there is an anticipated surge in demand for specialized military all-terrain vehicles, which offer functionality and modularity in military maneuvers. As a result, the electric off-road vehicle market is expected to benefit from this demand growth.
Key players in the electric off-road vehicle market include Polaris Inc., PIERER Mobility, Inc., Intimidator, Inc., Zero Motorcycles, and Volcon, Inc.
The electric off-road vehicle market size has been determined through a comprehensive research process involving both primary and secondary sources. The secondary research includes an in-depth analysis of various internal and external sources to gather qualitative and quantitative information related to the market. The primary research includes multiple interviews with industry experts, including VPs, business development managers, market intelligence managers, national sales managers, and external consultants such as research analysts, valuation experts, and key opinion leaders specializing in the electric off-road vehicle market. The purpose of the research process is to obtain a detailed overview and forecast of the electric off-road vehicle market size across all market segments, validate the data, and gain more analytical insights.