Market Trends of Electric Vehicle Test Equipment Industry
Rising Electric Vehicle Sales Drive Market Growth
Consumers increasingly opt for new energy vehicles, drawn by the lower lifetime operating costs of electric vehicles (EVs) compared to internal combustion engine (ICE) vehicles. This shift is fueling a surge in global EV sales. With the anticipated growth in EV adoption over the coming years, the demand for electric vehicle testing equipment, particularly battery and powertrain test systems, is set to accelerate.
- As reported by the International Energy Agency (IEA), global sales of electric cars reached 13.7 million units in 2023, up from 10.3 million units in 2022, marking a robust year-on-year growth of 33.0%.
- Avere France reported that new registrations of plug-in hybrid electric cars in France rose to 163,354 units in 2023, up from 127,110 units in 2022, highlighting a year-on-year growth of 28.5%.
The global surge in Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) significantly drives the electric vehicle test equipment market. The reduction in powertrain component costs, thanks to advancements in materials and more efficient packaging, is also fueling this growth.
- Government Initiatives and Incentives: Worldwide, governments are implementing various programs and policies to encourage the shift towards electric vehicles, thereby boosting the market for EV testing solutions. For instance, California's Zero Emission Vehicle (ZEV) program and substantial incentives in countries like India, China, and Germany are propelling industry growth.
- Post-Pandemic Surge in EV Adoption: The COVID-19 pandemic initially slowed EV sales due to supply chain disruptions and economic downturns. However, the market has rebounded strongly, with a significant increase in the demand for EV safety test equipment and EV charger testing solutions.
- OEMs Shifting to Electric Vehicles: Major Original Equipment Manufacturers (OEMs) are restructuring their product lines to focus on electric vehicles exclusively, further driving the demand for advanced EV testing systems. Investments by companies like General Motors and Volkswagen highlight this trend.
Automakers have been gradually developing business strategies that take electrification into account as a way to increase market share and keep a competitive edge in recent years. Moving forward, companies have announced their recent plans with a greater choice of models to be rolled out sooner over the study period.
- Toyota, the world’s largest car manufacturer, aims to roll out 30 BEV models with a goal of reaching 3.5 million annual sales of electric cars by 2030. Lexus aims to achieve 100% BEV sales globally in 2035.
- Volkswagen announced that all-electric vehicle sales would exceed 70% of its European and 50% of its Chinese and US sales by 2030 and that by 2040, nearly 100% should be zero-emissions vehicles. Whereas Volvo committed to becoming a fully electric car company by 2030.
- Ford also stated that it expects one-third of its European sales to be fully electric by 2026 and 50% by 2030, building on the success of its F-150 electric model, and to move to all-electric in Europe by 2030. Whereas Stellantis targets 100% of sales in Europe and 50% of sales in the United States to be BEVs by 2030.
- General Motors announced that it aims for 30 EV models and for an installed BEV production capacity of 1 million units in North America by 2025 and for carbon neutrality in 2040.
- Hyundai targets sales of 1.9 million BEVs annually by 2030 to secure a 7% global market share, and to end sales of ICE vehicles in Europe in 2035.
Asia-Pacific Leading the Market
The Asia-Pacific region remains at the forefront of the electric vehicle test equipment market, driven by its leadership in EV production and innovation.
- Dominance in Production and Innovation: China, Japan, and South Korea are leading the market, supported by lower powertrain component costs and significant investments in EV technology. The region's manufacturing infrastructure and governmental support are key drivers of market growth.
- Government Support and Market Expansion: Governments across Asia-Pacific are actively supporting the EV industry through incentives and policies, contributing to the region's leadership in the global market. China's investments in EV test equipment manufacturers are fostering the development of advanced technologies and testing standards.
- Impact of the Pandemic and Recovery: Despite initial disruptions due to COVID-19, the Asia-Pacific region has seen a robust recovery, particularly in EV battery management system testing and EV performance testing equipment.
- Future Market Growth and Innovation: The Asia-Pacific region is expected to continue outpacing other regions in market growth and value, with robust expansion predicted in segments like EV charger testing solutions and powertrain test systems.
China, India, Japan, and South Korea are at the forefront of the electric vehicle race in the Asia-Pacific region, thanks to supportive government incentives and schemes. Additionally, automakers like BYD, Tata Motors, and Toyota are expanding their EV portfolios in alignment with the government's decarbonization efforts, driving the electric vehicle market's growth and boosting the demand for electric vehicle test equipment.
- Sales of electric four-wheelers in India surged to 90,432 units in FY 2024, up from 47,499 units in FY 2023, marking a remarkable year-on-year growth of 90.3%, as reported by the Society of Manufacturers of Electric Vehicles (SMEV).
- Battery electric vehicle sales in China rose to 559 thousand units in August 2023, up from 508 thousand in July, reflecting a year-on-year growth of 10.0%, according to the China Association of Automobile Manufacturers (CAAM).
Both private and public investments are pouring into developing electric vehicle charging infrastructure in the region, further boosting EV adoption. Companies like Kazam and Hubject are heavily investing in electric charging stations, leading to a heightened demand for EV charging test equipment across the Asia-Pacific.
- As per the Japanese Ministry of Economy, Trade, and Industry (METI), 41% of Japan's publicly available fast-charging stations for EVs were situated at car dealers, trailed by convenience stores at 14% and train stations at 9%.
- The International Energy Agency (IEA) highlighted that in 2023, China, South Korea, and Japan topped the Asia-Pacific region in terms of publicly accessible electric vehicle chargers. China boasted 2,700 thousand units, followed by South Korea with 201 thousand units, and Japan with 31.6 thousand units.
