Electric Vehicle Tires Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Passenger Car and Commercial Vehicle), By Propulsion Type (Battery Electric Vehicle (BEV) and Hybrid Vehicle (HEV)), By Sales Channel (OEM and Aftermarket), By Tire Size (Up to 17”, 18" to 21", and Above 21") and Regional Forecast, 2023–2030

The global electric vehicle tires market size was valued at USD 17.24 billion in 2022. The market is projected to grow from USD 22.64 billion in 2023 to USD 128.00 billion by 2030, exhibiting a CAGR of 28.07% during the forecast period.

Electric vehicle tires equipped with vehicles have various shapes that differ from standard tires. The tires tend to be both taller and narrower, which helps reduce roll resistance and enhance the range. Electric vehicle tires are equipped with sound-absorbing foam, which is significantly quieter than ICE vehicle tires. Moreover, tires can significantly impact the overall performance of an electric vehicle. The electric vehicle tires market growth is driven by increasing EV demand and the adoption of electric vans, buses, and trucks for commercial purposes.

Growth is also driven by rising EV adoption across major countries such as the U.K., Germany, South Korea, China, and Japan. EVs are still at the initial adoption stage Canada, Mexico, Australia, India, and other emerging economies. The rising demand for electric passenger and commercial vehicles translates into higher demand for EV tires. This factor would help expand the global market share from over the projected timeframe.

COVID-19 IMPACT

COVID-19 Pandemic Led to Decrease in the Demand for Tires and Disruption in Production

The COVID-19 significantly impacted the market in 2020 and 2021. The pandemic majorly impacted the automotive industry. There was a sudden decline in the production of vehicles, thus impacting tire demand across the entire automotive sector. 

COVID-19 positively impacted the electric vehicle market, and the demand for electric vehicles (passenger vehicles) increased during the pandemic. Electric car sales reached a record high in 2021, thus, electric vehicle tires experienced positive growth during the later stages of the COVID-19 pandemic.

Key market players witnessed tremendous opportunities as the impacts of COVID-19 subsided. For instance, In November 2020, Continental signed a contract with MOIA to o help deliver the sustainable mobility of the future. The conti360 Fleet Solutions contract covers the VW subsidiary’s EV fleet. The premium tire manufacturer supports MOIA, a ride-sharing service provider in Hamburg and Hanover, Germany, with tires and service, in line with a Conti360° Fleet Solutions Mileage Contract. 

LATEST TRENDS

Rising Trend for the Adoption of the Internet of Things (IoT) to Boost the Market Growth

The adoption of Internet of Things (IoT)-enabled smart devices is one of the major ongoing trends in this market. The expanding connectivity in IoT and the penetration of IoT in the global automotive industry are accelerating the development and adoption of EV smart tires. Additionally, leading tire manufacturers are developing the functionality of smart tires that rely on IoT connectivity to deliver improved efficiency, greater safety, and longer tire life.

The shift towards IoT has enabled automakers to increase the tire monitoring accuracy using smart Tire Pressure Monitoring Systems (TPMS) provided by IoT-enabled connected tires. According to the National Highway Traffic Safety Administration (NHTSA), nearly 11,000 car crashes occur due to tire malfunction. With IoT-powered TPMS, the accuracy of tire condition information is greatly increased by replacing the traditional monitoring method with a direct network signal between a tire's embedded sensor and the vehicle's central computing system. Therefore, increasing demand for IoT-enabled connected tires to offer smart TPMS for regular tire monitoring to avoid car or fleet crashes is likely to influence the market development during the forecast period.

DRIVING FACTORS

Increasing Demand for Electric Vehicles to Augment the Market Growth

Increasing demand for electric vehicles and consequently rising sales are bound to accelerate market growth during the forecast period. Smart tires or connected tires are mostly utilized in new-generation electric vehicles. The rising need for uninterrupted connectivity solutions in passenger and commercial vehicles for enhanced monitoring, safety, and comfort. The automaker's focus on the early development of electric mobility to offer low operation cost, less maintenance, emit very low sounds, etc., are some of the key factors driving the adoption of an electric vehicle, further influencing the market growth. Moreover, most new-generation electric vehicles are equipped with enhanced internet connectivity and a significant level of autonomy with advanced safety technologies such as ADAS, Head-Up-Display, and others. In conclusion, surging electric vehicle sales, with high penetration in emerging economies, will certainly boost the adoption of electric vehicle tires over the coming years.

RESTRAINING FACTORS

Lower Lifespan and Higher Cost of EV Tires Could Restrict the Market Growth

The tire plays a very important role in the performance of a vehicle. The use of high-performance tires results in efficient electric vehicle performance. Internal combustion engine vehicles and electric vehicles use different tires. Electric vehicles generate more power than ICE vehicles; In addition, due to batteries, electric vehicles are heavier than ICE vehicles. The tires of electric vehicles wear around 20% faster than internal combustion engine vehicles due to the acceleration these vehicles produce. Thus, the increased weight and torque of electric vehicles put more strain on tires and reduce their lifespans. Consequently, the lower life of EV tires hampers the market growth. The average cost of electric vehicle tires is higher than ICE tires due to the specific requirements. EVs, for instance, tend to accelerate quickly, requiring a range of rubber compounds to reduce potential slippage. Therefore, lower life and higher costs of EV tires collectively restrict the market growth.

SEGMENTATION

By Vehicle Type Analysis

Passenger Vehicle Segment to Hold Maximum Share Due to Increasing Demand

The passenger vehicle segment holds the maximum market share due to increasing sales in China, India, Norway, and Germany, and other countries. China’s EV sales rose 22.70% in 2022. The country is the leading player in globally growing passenger vehicle sector. Regional automakers are also looking to expand into newer markets. For instance, in September 2022, BYD signed a contract to build a new energy vehicle factory in Thailand. The company plans to enter Thailand's and Japan’s passenger car markets, with annual production capacity around 150,000 vehicles when the factory opens.  

Commercial electric vehicles are still in the adoption phase, and their demand is growing year after year. Logistics & transportation companies such as MAERSK, Pitney Bowes, XPO, FedEx Express, DHL Supply Chain, and others are increasingly focusing on switching to electric vehicles. Meanwhile, the respective governments across many countries are promoting electric buses for public transport. Widespread EV shift will create favorable opportunities for this market during the forecast period.

By Propulsion Type Analysis

Battery Electric Vehicle (BEV) Segment to Dominate Backed by Technological Development

According to the propulsion type, the market is categorized into battery electric vehicles (BEV) and Hybrid vehicles (HV). The battery electric vehicle segment is anticipated to hold higher market share and is expected to grow further due to the vast advantage of an electric vehicle offered by BEVs. The growth is attributed to the rising development of electric vehicles by tire OEMs; for instance, in August 2022, CEAT launched its new range of EV tires specially designed for electric buses. The Company claimed that the new tire provides 30 percent higher mileage than regular tires. The Company has presented the CEAT Winenergy X3-R tires in two different size options, such as 95/80 R22.5 and 255/70 R22.5; this development drive EV tire market growth during the forecast period.

By Sales Channel Analysis

OEM Segment to Grow Significantly due to Rising Number of Electric Vehicles

Based on sales channel, the market is categorized into OEM and Aftermarket. The OEM segment dominates the electric vehicle tires market share due to increasing production, demand, sale, and supply of electric vehicles (Passenger & Commercial). For instance, In May 2022, Volkswagen signed a partnership agreement with Mahindra for MEB electric components in Chennai (India) for Mahindra's new Born Electric Platform. Mahindra plans to equip its Born Electric Platform with MEB electric components, including electric motors, battery system components, and battery cells. Thus, the rising development & adoption of electric vehicles boost the demand for electric vehicle tires during the forecast period. On the other hand, the aftermarket segment is expected to be the fastest growing segment during the forecast period due to the demand for spare tires for replacement from aftermarket outlets. The life of tires for passenger vehicles is between 3 to 5 years. For commercial vehicles, it varies according to the type of vehicle. Timely maintenance and replacement of EV tires will promote sales across the aftermarket segment.

By Tire Size Analysis

18" to 21" Segment Leads the Market Due to Increasing Adoption of Passenger Vehicle

Based on the tire size, the market is divided into Up to 17", 18" to 21", and Above 21". The 18" to 21" holds the maximum share due to wide use in passenger vehicles. The Up to 17 segment holds the second largest market share and is poised to record the fastest growth during the forecast period due to the adoption of light commercial vehicles, electric vans, and some types of passenger vehicles.

REGIONAL ANALYSIS

The electric vehicle tires market is examined across Europe, North America, Asia Pacific, and the Rest of the World.

Presently, Asia Pacific region dominates the global market for electric vehicle tires. The growth is attributed due to the high demand for electric vehicles in Japan, China, and South Korea. These countries pose fruitful opportunities for market players owing to increasing disposable income and rising expenditure on eco-friendly vehicles. Additionally, the growth is attributed to government plans and holdings in the countries backing up the adoption of passenger and commercial EVs, further increasing the development of the electric vehicle market. China is expected to be the dominant market in the Asia Pacific region, while India is set to be the fastest-growing.

Europe holds the largest market share after Asia Pacific due to the augmented focus on sustainability and reduction in the carbon emissions in the European Union (EU) region. Norway, Germany, Italy, and the U.K. are actively focusing on the development of EV charging infrastructure.

North America is also projected to witness encouraging growth in the market. The regional growth is attributed to increasing government regulations and incentives to promote the electric vehicles adoption.

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KEY INDUSTRY PLAYERS

Product Development, Acquisitions, and Partnerships by Companies to Gain Competitive Advantage

National and global market players have been consistently working on new tire technologies for electric vehicles. The key market leaders are investing in R&D for their products on a large scale, making accessing electric vehicle tires easier. Companies focus on the devolvement of a wide range of tires for electric vehicles. Michelin, Continental AG, Goodyear Tyres, and Bridgestone Corporation are some of the electric vehicle tires market players.

List of Key Companies Profiled:

• Michelin (France)


• Continental AG (Germany)


• Goodyear Tyres (U.S.)


• Sumitomo Rubber Industries (Japan)


• Nokian Tires (Finland)


• Toyo Tyres (Japan)


• PIRELLI TYRE S.P.A. (Italy)


• Bridgestone Corporation (Japan)


• Trelleborg AB (Sweden)


• Hankook Tire & Technology (South Korea)

KEY INDUSTRY DEVELOPMENTS:

• March 2023, Sumitomo Rubber Industries announced that the company would launch FALKEN e. ZIEX is a new line of replacement tires for electric vehicles (EVs) in Europe. The tire delivers the highest fuel (energy) efficiency of any tire that the company has offered to date, e. ZIEX is Sumitomo’s second line of replacement tires designed for EVs, joining the DUNLOP e. SPORT MAXX launched in China last year.


• February 2023, The Goodyear Tire & Rubber Company launched RangeMax RSD EV, Goodyear's first electric vehicle-ready tire compatible with EV and gas- or diesel-powered regional work vehicles. The RangeMax RSDEV is Goodyear's best regional drive tire for energy efficiency. They are equipped to handle the higher load capacities of EVs.


• September 2022 – Goodyear Tire & Rubber Company introduced the all-new Electric Drive all-season tire, two new sizes for the Goodyear Electric Drive GT, and the addition of four new sizes to its EV tire. The Electric Drive provides 60,000-mile tread life limited warranty. This all-season tire is built for commuters touring sedans and CUVs.


• August 2022 – CEAT launched a new range of EV tires specially designed for electric buses. The Company claimed that the new tire provides 30 percent higher mileage than regular tires. The Company has presented the CEAT Winenergy X3-R tires in two different size options, such as 95/80 R22.5 and 255/70 R22.5.


• June 2022- Michelin signed an agreement with Hyundai Motor Group to develop advanced-generation tires optimized for battery electric vehicles (EVs). The agreement will focus on developing eco-friendly tires, significantly improving the use of sustainable materials. This agreement is to develop a tire monitoring system by analyzing tire wear and diverse road environment data. Next-generation tires will find their way into future premium EV models of the Hyundai Motor Group.

REPORT COVERAGE

The report provides a detailed electric vehicle tires market analysis and focuses on key aspects such as leading market players, vehicle type, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

Report Scope & Segmentation