November 14, 2024
Alternative Fuel Vehicle Market

Alternative Fuel Vehicle Market Report, Trends, Share & Insights

The alternative fuel vehicle market has gained immense popularity owing to the rising environmental concerns and depleting fossil fuel reserves. Alternative fuels such as electricity, biodiesel, natural gas, hydrogen, and others offer an eco-friendly solution for transportation needs. Electric vehicles are becoming ubiquitous with their zero tailpipe emissions and lower cost of operations. Meanwhile, bi-fuels provide renewable substitutes for gasoline and diesel. The growing emphasis on sustainability has prompted auto giants to invest heavily in alternative powertrains.

The global alternative fuel vehicle market is estimated to be valued at US$ 564.7 Mn in 2024 and is expected to reach US$ 4,532.4 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 34.7% from 2024 to 2031.

Key Takeaways

Key players operating in the alternative fuel vehicle market are Tesla, Toyota, Ford, General Motors, Volkswagen, Nissan, and Hyundai. Tesla is a frontrunner in battery electric vehicles with its mass-market Model 3. Toyota has developed a robust lineup of hybrid and fuel-cell vehicles with its Prius and Mirai models.

The Alternative Fuel Vehicle Market Demand vehicle market is witnessing growing demand owing to stringent emission norms and incentives for greener mobility options. Many governments offer purchase subsidies and tax rebates for electric vehicles to encourage adoption. Countries across Europe, China, Canada, and some states in the US have announced bans on gasoline cars by 2030-2040 timeframe to transition to low-carbon transport.

Major automakers are expanding their electric vehicle portfolios and manufacturing capabilities globally to tap the burgeoning demand. Companies are also working to improve vehicle ranges and expand charging infrastructure for widespread electric vehicle usage. Several startups are introducing innovative business models involving battery leasing and swapping to make owning an EV more convenient.

Market Key Trends

One of the key trends spurring the Alternative Fuel Vehicle Market manufacturers in india is the rapid decline in battery prices. Lithium-ion battery costs have fallen over 87% in the past decade to around $137/kWh nowadays. Wider adoption of electric vehicles hinges on achieving the $100/kWh price point which is expected by 2023. Lower battery prices will directly reduce the total cost of ownership of EVs versus internal combustion engine equivalents. As batteries get cheaper, electric vehicles will achieve price parity and eventually become more affordable than gasoline or diesel cars. This is expected to exponentially boost the demand for alternative fuel vehicles.

Porter’s Analysis

Threat of new entrants: The cost of setting up manufacturing facilities for alternative fuel vehicles is very high which prevents new companies from entering easily.

Bargaining power of buyers: Buyers have significant bargaining power as there are many manufacturers providing alternative fuel vehicles.

Bargaining power of suppliers: A few large companies dominate the supply of alternative fuels like electricity, hydrogen etc giving them strong bargaining power over automakers.

Threat of new substitutes: Electric automobiles pose a strong threat of substitution as charging infrastructure expands and battery costs fall.

Competitive rivalry: Intense competition exists among established automobile manufacturers to increasing their market share in alternative fuel vehicles.

Geographical Regions

North America currently accounts for the largest share of the global alternative fuel vehicle market in terms of value due to favorable government policies and growing consumer demand. The presence of leading automakers is also a key factor for the region’s dominance.

China is anticipated to be the fastest growing regional market during the forecast period owing to heavy investments by both private companies and the government to promote new energy vehicles as a means to reduce pollution levels. The ongoing expansion of charging infrastructure will further support the growth of alternative fuel vehicles in China.

*Note:
1. Source: Coherent Market Insights, Public Source, Desk Research
2. We have leveraged AI tools to mine information and compile it.

About Author - Alice Mutum

Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights. LinkedIn

About Author - Alice Mutum

Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights. LinkedIn

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