Market Trends of Europe Electronic Test And Measurement Industry
The Electric Vehicles Segment is Expected to Witness Significant Growth
- The automotive industry is a cornerstone of the European economy, contributing approximately 7% to the region's gross domestic product (GDP). Over the years, this industry has been instrumental in driving economic growth and fostering innovation. The ongoing trend toward urbanization, coupled with the rising popularity of shared mobility services in key markets such as the United Kingdom, France, and Germany, significantly influences consumer preferences and, consequently, the demand for automobiles.
- During the 2022-2023 period, Europe witnessed substantial policy developments, particularly the introduction of new CO2 standards. These regulatory measures are anticipated to be crucial in accelerating the transition toward zero-emission road transport, thereby significantly boosting the demand for electric vehicles (EVs).
- According to data from the International Energy Agency (IEA), Europe secured its position as the world's second-largest market for electric cars in 2022, second only to China. The region accounted for 25% of global electric car sales and held 30% of the global stock. Leading countries in this sector include Germany, the United Kingdom, France, Norway, the Netherlands, Sweden, and Italy, which are at the forefront of electric vehicle adoption in Europe.
- Since implementing the light-duty vehicle CO2 regulation in 2019, a renewed focus has been on reducing emissions and addressing climate change. The European Union has adopted stringent new CO2 standards for cars and vans, aligned with the 2030 targets outlined in the 'Fit for 55' package. According to the European Automobile Manufacturers' Association (ACEA), the EU car market experienced a robust 13.9% growth in 2023 compared to the previous year, reaching a total annual volume of 10.5 million.
- As electric vehicles become more prevalent across the region, the demand for comprehensive testing and certification services is expected to rise significantly. These services include battery performance and security testing, electrical motor assessments, vehicle performance evaluations, charger tests, and overall certification processes. These services ensure electric vehicles' reliability, safety, and efficiency, supporting their widespread adoption and integration into the European market.
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Germany To Hold Significant Market Share
- Germany's automotive industry, a global leader, stands as the backbone of the nation's industry. Germany has emerged as a frontrunner in high-tech automotive products, with a particular focus on expanding its electric vehicle (EV) and charging infrastructure. The government's commitment is evident, with the Federal Ministry for Economic Affairs and Climate Action allocating a substantial USD 1.2 billion in 2022 to bolster the nation's battery cell production, aiming for global leadership.
- This dedication to EVs, backed by incentives and funding, has significantly boosted Germany's adoption and market share of battery electric vehicles (BEVs). Consequently, the rising demand for BEVs underscores a growing necessity for electronic test and measurement equipment in the EV industry. Such equipment is pivotal, offering insights into critical metrics like current and voltage measurements and charging communication.
- Shifting focus, Germany boasts Europe's third-largest aerospace and defense industry, with a notable global military and aerospace expenditure share. In 2021, the Ministry of Defense (MOD) received a substantial EUR 46.9 billion in funding. This support increased in 2022, with the MOD's allocation rising to EUR 50.3 billion and a consistent annual commitment of EUR 50.1 billion until 2026. If the nation's ambitious 2% target is met, military expenditure could soar to EUR 85.6 billion by 2026. This increase in defense spending indicates an increased need for electronic test and measurement equipment in the aerospace and defense industries.
- Lastly, as Germany witnesses a rapid evolution in network consumption and an increasing need for faster data transmission, the country is seeing a surge in fiber networks. This demand is largely driven by the requirements of 5G technology, which necessitates a denser network infrastructure to support its advanced features. With bandwidth usage on the rise and the introduction of cutting-edge technologies, the demand for communications test and management equipment is set to soar.
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