e-SUV Market Size, Share & COVID-19 Impact Analysis, By Propulsion (BEV and HEV), By Size (Compact, Mid-Size, and Full-Size), By Driving Range (Upto 150 Km, 150 to 300 Km, and Above 300 Km), By Components (Body, Chassis, and Powertrain (ICE, & Motor (Up to 20 kW, 20 to 100 kW, and Above 100 kW)), Battery (Upto 10 kWh, 10 to 30 kWh, 30 to 60 kWh, and Above 60 KWh), Electronics, and Others), and Regional Forecast, 2023-2030

The global e-SUV market size was valued at USD 176.67 billion in 2022. The market is projected to grow from USD 208.50 billion in 2023 to USD 524.26 billion by 2030, exhibiting a CAGR of 14.1% during the forecast period.

e-SUV, an electric SUV, is an electric sports utility vehicle is powered by electricity rather than a traditional internal combustion fuel engine. Some of these vehicles are also partially electric-powered, known as hybrid SUVs. Some vehicles are equipped with all-wheel drive (AWD) or four-wheel drive (4WD) systems to operate on rough terrain surfaces and public roads to adapt to any difficult terrain. Electric SUVs are popular among all-electric vehicles, offering zero-emission, quiet operation, and potentially lower running costs than ICE vehicles. These vehicles use batteries and motors instead of conventional IC engines.

The rising adoption of fuel-efficient mobility solutions is anticipated to drive the e-SUV market share.

COVID 19 IMPACT:

Supply Chain Disruptions During COVID-19 Pandemic Hampered Market Growth

The extended closure of major economies during the pandemic had a diverse impact on the automotive industry, causing the closure of key automobile assembly plants globally. The manufacturing shutdown and the significant decrease in vehicle demand exposed vulnerabilities in global supply chains. It also led to a lack of R&D operations funding as the key players focus on survival more than R&D in the current scenario. The country's rapid limitation of the COVID-19 pandemic and its economic recovery have boosted the evolving and strong electric vehicle ecosystem. Several electric vehicle startups are launching new, locally designed electric car models.

COVID-19 accelerated the shift toward electric vehicles. Increased awareness of environmental concerns and cleaner transportation modes, increased government and consumers focus toward electric mobility. For instance, the Indian government launched the FAME II scheme. Various governments introduced policies and packages, such as subsidies and strict emission regulations, promoting EVs as a part of economic recovery plans. Due to increase in government incentive schemes, many renowned brands and electric vehicle startups are launching new models. The country's economic recovery have led to an evolving and strong electric vehicle ecosystem.

LATEST TRENDS

Increasing Driving Range of Vehicles is an Evolving Trend in the Market

Electric cars' driving range is considered the top priority factor for consumers when purchasing an electric vehicle. Many additional methods such as speed optimization and regenerative braking & accelerating are also implemented to improve driving range. For example, in January 2023, Tata Motors claimed to increase the driving range for the Tata Nexon EV Max from 437km to 453km. This update was implemented via a software upgrade across all its Nexon models.

In countries, including China and India, the focus on decreasing vehicle emissions and increasing government support is increasing. Electric SUVs offer comparatively longer driving, alleviating range anxiety, and making them more practical for everyday use.

• For instance, in September 2023, Mercedes-Benz announced the launch of its newest electric vehicle architecture, focusing on improving its electric vehicles (EVs) driving range. According to the company, the new architecture will target a 30% to 35% increase in driving range. In addition to improving driving range, Mercedes-Benz will introduce a lithium-iron-phosphate (LFP) battery in the new model lineup, making it the first Mercedes EV to use an LFP battery.

The automotive industry is accelerating its electrification strategy through research and development to extend the range, improve overall powertrain, and driving performance.

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DRIVING FACTORS

Declining Cost of Electric Vehicle Battery to Drive Market Growth

e-SUVs have been popular globally due to their spaciousness and versatility. The availability of e-SUVs meets consumer demand for larger electric vehicles suitable for larger passenger capacity. An essential driver for EV adoption is battery cost reduction, thereby reducing the total cost of operation and the final cost of the vehicle. Consistent decline in the cost of lithium-ion batteries positively influences market growth.

The battery is the most crucial and expensive component for any electric vehicle. Advances in technology, improved manufacturing processes, and efficiency gains have all meant that the price of the battery continued to fall, reducing the cost of an electric vehicle. Though the battery’s share of an EV’s overall cost continues to reduce, any decrease or increase in battery prices has a direct bearing on the price of an EV.

According to the Department of Energy’s (DOE) Vehicle Technologies report, the cost of an electric vehicle lithium-ion battery pack declined by 85% in the last decade to USD 153/kWh in 2022 due to scale in operations, changes in cell chemistries, and many other parameters. This correlation decreased the EV prices, followed by the decreasing battery costs. Most of the manufacturers are developing new battery types.

• For instance, in June 2023, Researchers at the University of Texas announced a lithium-sulfur battery that can store four times more energy than a traditional lithium-ion battery of the same capacity.

RESTRAINING FACTORS

High Manufacturing Costs and a Lack of Charging Infrastructure Might Obstruct Market Growth

Electric vehicles are superior to conventional vehicles but tend to have higher upfront purchase costs than gasoline-powered vehicles. Although the cost differential is narrowing, these vehicles still have not achieved economies of scale, which still deters some buyers.

In addition, a lack of widespread and easily accessible charging infrastructure can be a significant barrier to e-SUV adoption. Driving range anxiety due to the lack of charging stations remains a concern for potential buyers. People traveling long distances worry about getting stranded as fewer charging stations are available. Correspondingly, manufacturing electric vehicles requires a lot of assets and investment, which has also affected market growth.

SEGMENTATION

By Propulsion Analysis

HEV Dominated the Market in 2022 due to Affordability of Hybrid Cars as Compared to BEV

Based on propulsion, the market is divided into BEV and HEV.

The Hybrid Electric Vehicle (HEV) segment dominated the market due to lower cost of acquisition as compared to Battery Electric Vehicles. HEV is an ideal segment between pure EV and IC engines having better performance than conventional vehicles making it suitable choice for most of the buyers located in regions with insufficient charging infrastructure. Some of the companies are selling HEV models in developing nations.

• For instance, In August 2022, Toyota announced its strategy of focusing on producing low-cost hybrid vehicles in developing countries. Toyota plans to sell low-cost hybrid cars to the general public to capture the growing demand for cars in developing countries.

The BEV held the significant market share in 2022. The battery electric vehicles, called BEVs, are completely electric vehicles with rechargeable batteries and no conventional gasoline engine. All energy to propel the vehicle is received from the battery, which is recharged from the grid. More efficient driving performance and range are the factors anticipated for the segmental growth in the market.

By Size Analysis

Mid-Size Segment to Hold Largest Market Share as it is Cost-Effective

By size, the market is classified into Compact, Mid-Size, and Full-Size. The Mid-size is expected to dominate the global market during the forecast period. This segment offers the majority of required features, making it more affordable.

 The compact segment dominated the market in 2022 and is expected to grow at a considerable CAGR during the forecast. Asia is a leading market in the automotive sector, and most of the market here is price-sensitive, making this segment ideal and dominant.

The Full-size segment is anticipated to be the fastest-growing segment in the market. Increasing consumer disposable income, especially in developed and developing economies, and features such as more seating capacity and boot space drive the demand for full-size segment vehicles with advanced features.

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By Driving Range Analysis

Efficient Range of 150 to 300 Km to Drive 150 to 300 km Segment Growth

By driving range, the market is segmented into Upto 150 Km, 150 to 300 Km, and Above 300 Km. The 150 to 300 Km segment is projected to hold the major market share during the forecast period. It is more suited for a suburban environment and for daily commutes. e-SUVs falling in this range are comparatively more affordable, driving the segment’s growth.

The above 300 Km segment is the fastest growing segment in the market. Increasing practicality for everyday usage without frequent charging and reaching a broader range of users from rural and urban areas is anticipated for segmental growth.

By Components Analysis

Improving Comfort, Performance and Safety to Drive Powertrain Segment Growth

By components, the market is divided into body, chassis, powertrain (ICE and Motor (Up to 20 kW, 20 to 100 kW & Above 100 kW)), battery (Upto 10 kWh, 10 to 30 KWh, 30 to 60 kWh & Above 60 KWh), electronics, and others.

A powertrain is a cluster of components generating power to move the vehicle. The powertrain in electric vehicles covers the battery and electric motor, and IC engine. The powertrain segment dominates the market, as it is crucial owing to its comfort, performance, and safety.

The battery segment is the fastest-growing segment in the market. Many OEMs are investing in research focused on battery optimization for increasing its output, this factor anticipated for segmental growth.  

The electronics segment is the second fastest-growing segment. The electronics segment growth is attributed to increasing demand for advance infotainment and safety systems in the electric vehicles.  The growing penetration of ADAS across the SUVs is also another factor supporting the segment growth.

REGIONAL INSIGHTS

The market is studied across North America, Europe, Asia Pacific, and the Rest of the World.

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The Asia Pacific market is expected to dominate due to the rising initiatives by government to raise the manufacturing and sales of e-SUVs. For instance, in April 2019, the FAME system’s second phase and rapid launch and production of hybrid and fully-electric vehicles began in India, with a budget of USD 1 billion. Furthermore, the share of hybrid SUVs in China increased owing to the new energy vehicle mandate. As a result, the abovementioned factors are estimated to raise the SUV market share across Asia Pacific at fastest CAGR during the projected period. 

The European market is also anticipated to grow significantly due to strict emissions regulations and government policies to increase the proportion of commercial vehicles using alternative fuels.

North America is estimated to witness significant growth during the projected period. The U.S. hold the highest market share due to the government incentives for electric vehicle purchases and infrastructure development, driving the electric vehicles sales across North America. Therefore, these factors contribute to the market growth in the region.

KEY INDUSTRY PLAYERS

Growing Key Players Focus on Strategic Partnerships to Drive Market Growth

Major players in the market include Tesla, Toyota Motor Company, AB Volvo, Volkswagen AG, Ltd. BYD Company Ltd, Honda Motor Co., Hyundai Motor Company, BMW Group, and others. The e-SUV market trend is highly dynamic, with many renowned players competing for market share. These key players are focused on supply chain network diversification and strategic partnerships with the regional players, focusing on raising product penetration in developing countries. Toyota has more than 20 electric SUV models, including hybrid variants, in its portfolio.

• For instance, in January 2023, Toyota Motor launched BZ4X, its pure electric SUV in India. This model has a 71.4kW battery with a driving range of 400 km.

Thus, launching new eco-friendly and efficient vehicles in the market will boost the global e-SUV market growth during the projected period.

LIST OF KEY COMPANIES PROFILED:

• Tesla Inc. (U.S.)


• Toyota Motor Corporation (Japan)


• Honda Motor Co., Ltd. ( Japan)


• BYD Company Ltd. (China)


• Ford Motor Company (U.S.)


• Hyundai Motor Company (South Korea)


• Mercedes-Benz (Germany)


• Nissan Motor Corporation (Japan)


• Volkswagen AG (Germany)


• AB Volvo (Sweden)

KEY INDUSTRY DEVELOPMENTS:

• September 2023 - Pravaig signed an MOU with the government of Saudi Arabia to accelerate the electric automotive industry in Saudi Arabia. Pravaig is a Bangalore-based EV startup that introduced two electric SUV models, and the company will be setting up a manufacturing unit with a capacity of 1 million units.


• August 2023 - Porsche launched its powerful Cayenne Turbo S e-Hybrid model. The new model has a 441 kW motor with a 4 lit V8 engine. The company will also be offering a plug-in hybrid variant in its range


• May 2023 - Range Rover announced the upgrade of its powertrain to a hybrid in its luxury SUV lineup. The brand will equip all Range Rover SUVs with hybrid and plug-in hybrids and a new V8 trim.


• April 2023 - MG Motor launched a plug-in hybrid SUV model in Mexico. The rising opportunity for a hybrid market in the region was decided for this launch by the company. MG Motor's eHS model will be sold in Mexico for USD 45,610.


• April 2023 - German luxury carmaker Mercedes launched the AMG GT 63 S E Performance hybrid model. It is the flagship model of the AMG GT line, with a 204 horsepower electric motor providing a range of 7.5 miles and a 639 horsepower, 4.0 lite Turbocharged V8 IC engine that boasts a hybrid powertrain and delivers sports car performance.

REPORT COVERAGE

The market report provides detailed market analysis and focuses on key aspects such as leading companies, product types, end-users, design, and technology. Besides this, the report offers in-depth analysis & insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.

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