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Automotive Test Equipment Market Size, Share & COVID-19 Impact Analysis, By Location (Production Testing and Service Testing), By Propulsion (ICE and EV), By Vehicle Type (Passenger Cars and Commercial Vehicles), and Regional Forecast, 2023–2030

Last Updated: July 01, 2024 | Format: PDF | Report ID: FBI100640

 

KEY MARKET INSIGHTS

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The global automotive test equipment market size was valued at USD 10.11 billion in 2022. The market is projected to grow from USD 10.42 billion in 2023 to USD 13.20 billion by 2030, exhibiting a CAGR of 3.44% during the forecast period.


Automotive test equipment assesses the performance of various vehicle components, including engines, transmissions, suspension systems, steering systems, and braking systems. This equipment is used to assess the quality and consistency of components, subassemblies, and finished vehicles. This ensures that vehicles meet strict quality standards before reaching consumers, reducing defects and recalls.


Modern vehicles are equipped with a multitude of electronic components and systems, including Engine Control Units (ECUs), infotainment systems, navigation systems, sensors, and more. These electronic systems require comprehensive testing to ensure that they function correctly and reliably. Test equipment also optimizes vehicle design and performance characteristics. Moreover, safety is a top priority in the automotive industry. Test equipment is used to evaluate the effectiveness of safety systems, including airbags, seat belts, anti-lock brakes, and electronic stability control, to ensure they function correctly in various driving conditions and collision scenarios.


With increasing environmental concerns and government regulations, automotive test equipment is crucial for measuring and verifying emissions levels, fuel efficiency, and compliance with environmental standards. For instance, E.U. regulations require vehicles to be equipped with onboard diagnostics systems that monitor the performance of emission control systems and notify the driver of any malfunctions or deviations from emission limits. Similarly, in April 2023, the U.S. Environmental Protection Agency (EPA) announced new standards to reduce further harmful air pollutant emissions from light-duty and medium-duty vehicles starting with model year 2027.


COVID-19 IMPACT


Decline in Vehicle Production amid the Pandemic Impacted the Production of Global Market


The COVID-19 pandemic adversely impacted the automotive industry, including the automotive testing market. The extent and nature of the impact varied depending on several factors, such as the duration and severity of lockdowns, the supply chain disruptions, and the overall economic conditions.


The pandemic disrupted global supply chains, leading to interruptions in the production and delivery of vehicle test equipment. Manufacturers faced challenges in sourcing components and raw materials, which, in turn, affected the availability of testing equipment. Sales and profit decreased due to the halt of corporate activities affected by the pandemic and lockdown.


The COVID-19 caused delays in automotive research and development projects, including those related to electric vehicles, autonomous vehicles, and advanced driver assistance systems. These delays impacted the demand for specialized testing equipment.


LATEST TRENDS


Rising Demand for more Reliable and Efficient Testing Solutions


Automakers are constantly investing in R&D activities to improve the efficiency and reliability of their testing processes. This is driving the development of new testing equipment technologies that can provide faster, more accurate, and more reliable test results. For instance, there is a growing demand for integrated testing solutions that can combine multiple tests into a single test sequence. In October 2022, AVL opened an indoor laboratory for the validation and verification of sensors for driver assistance systems in Roding, Bavaria. In the 1600 square meter test area, safety-relevant functions can be tested under adverse weather conditions, irrespective of real outdoor conditions, thus ensuring the safety of vehicles in semi-autonomous operation.


Similarly, in March 2023, automotive testing supplier A.B. Dynamics introduced a new, highly maneuverable target platform to test ADAS and A.V. technology. The test system is designed to help replicate challenging urban test scenarios specifically. The LaunchPad Spin simulates dynamic movements, can carry a variety of vulnerable road user targets, and has a top speed of 30km/h (20mph).


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DRIVING FACTORS


Increasing Demand for Electric Vehicles (EVs) and Autonomous Vehicles (AVs) is Expected to Increase the Demand for Market Significantly


Testing of the equipment is crucial for evaluating the performance of electric and hybrid vehicles, including battery systems, electric motors, charging infrastructure, and powertrain integration. Electric vehicles rely on batteries for power. Testing of an automotive equipments is essential for evaluating the performance, capacity, and safety of batteries. This includes tests for battery range, charging efficiency, thermal management, and durability.


The rapid increase in battery technology for electric vehicles requires constant evolution of the equipment needed to test them. Original Equipment Manufacturers (OEMs) are launching turnkey solutions to test powerful batteries. For instance, in September 2023, E.A. Elektro launched a compact automated battery cycler and test system to enhance the testing of higher-power EV batteries. The test system can control an environmental chamber and communicate with a battery management system through the CANbus interface, and drag-and-drop software is all included. 


RESTRAINING FACTORS


High Cost of Automotive Test Equipment to Restrain the Market Growth


The testing of automotive equipment can be very expensive, which can be a barrier to entry for small and medium-sized businesses. This is very complex process. It needs to be tested on a wide range of components and systems in a variety of conditions. This complexity requires the use of advanced technologies and materials, which drives up the cost of the equipment.


Moreover, it also needs to be able to measure and record data with a high degree of accuracy. This precision requires the use of high-quality components and assembly techniques, which also drives up the cost of overall production cost of automotive test equipment. All these factors are hampering the automotive test equipment market growth.


SEGMENTATION


By Location Analysis


Production Testing To Hold the Largest Market Size Due to Its Wide Usage Among Automotive Component Manufacturers


On the basis of location, the market is bifurcated into production testing and service testing.


The production testing segment is the largest shareholder in the global market and is expected to maintain its dominance over the forecast period. Production testing is the testing of vehicles and components during the manufacturing process to ensure that they comply with regulations and quality standards. Automotive OEM facilities, research & development centers, and automotive component manufacturers carry out the testing. To avoid any issues with product malfunction or customer dissatisfaction, production testing has become crucial. In larger applications, product defects have the potential to cause serious injury. To protect users, it is important to minimize the risk of defects by thoroughly testing products before they are sold. The increasing complexity of vehicles with more electronics and components has led to growing demand for production testing equipment.


Growing concerns of consumers to ensure the safety and reliability of their vehicles is one of the major reasons driving the service testing segmental growth. OEMS, such as PHINIA provides aftermarket test equipment services such as fuel management & care, chassis, ignition, and power electronics for EV and HEV drivetrains, among others, to its customers.


Moreover, service testing held a market share of 8.05% in 2022 and is estimated to register a CAGR of 2.8% over the forecast period. Automotive garages or repair & maintenance centers offers service testing at a very low price compared to the production testing.


By Propulsion Analysis


EV is Anticipated to Register the Highest Growth Rate due to its Growing Popularity


The market is categorized into ICE and EV based on propulsion.


ICE segment occupied a lion’s share of 89.12% in 2022.   The ICE propulsion segment is anticipated to witness slow growth over the forecast period owing to the strict environmental regulations to curb emission levels and government initiatives to phase out ICE-powered vehicles in the coming years. However, growing demand for hybrid and high-performance vehicles is driving the demand for ICE vehicle testing equipment. Sports cars and luxury cars are equipped with powerful engines. These engines require specialized testing equipment to ensure they perform efficiently and smoothly.


The electric vehicle is estimated to register a highest CAGR during forecast period owing to the high growth rate is attributed to the supportive government initiatives along with the growing popularity of EVs in recent years. The U.S. government announced plans to reduce carbon emission levels 50-52% below 2005 levels by 2030. Besides stringent regulations to curb the rising emission level, the government is taking various initiatives to promote the electrification of vehicles. The test equipment in EVs is primarily used for testing the interior system and components, including EV battery & charger testing, power electronics testing, and motor & engine dynamometers, to check the overall vehicle performance. For instance, motor testing equipment is used to check the torque or electric signal at the high speed of the electric vehicle through sensors, voltage probes, and other software.


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By Vehicle Type Analysis


Passenger Cars Segment Holds the Highest Market Size Owing to Rising Car Ownership Globally


Based on vehicle type, the market is segmented into passenger cars and commercial vehicles.


The passenger cars segment is currently the largest shareholder and is anticipated to continue doing so in the global automotive test equipment industry. The dominance can be accredited to various factors, including the increasing urban population and their commuting needs. Furthermore, electric cars are preferred over IC engine-powered vehicles due to their low operating costs, making them the preferred choice for the end-users. In addition, the growing concern over the increasing environmental pollution due to the propulsion of ICE vehicles in developed countries of Europe and North America is expected to drive the demand for electric passenger cars.


The commercial vehicle segment is broadening in terms of sales and product range. Moreover, in countries, such as China and the U.S., commercial vehicles powered by batteries are now becoming a part of the transport industry owing to the booming logistics sector. They are expected to replace conventional trucks during the forecast period. Hence, commercial vehicles are significantly contributing to the growth of the market.


REGIONAL INSIGHTS


Asia Pacific Held a Significant Market Share owing to Rapid Expansion of the Automotive Industry and Technological Developments


Asia Pacific dominated the global automotive test equipment market share in 2022 and is estimated to grow at a high CAGR over the forecast period. Asia Pacific is a major manufacturing center for the automotive industry. The production and sales of both traditional and electric vehicles have been increasing, driving the demand for automotive testing equipment. The expansion of this sector has driven the demand for vehicle testing equipment for quality control, emissions testing, and safety evaluations.


North America held a significant market share in 2022. Stricter vehicle emissions and safety regulations in the U.S. and Canada necessitates comprehensive testing to ensure compliance. Manufacturers require sophisticated equipment to meet these regulatory requirements. The continuing evolution of automotive technology, including automated driving systems and driver assistance technologies, has increased the importance of automotive production testing. In 2020, NHTSA launched Automated Vehicle Transparency and Engagement for Safe Testing. As part of this initiative, states and companies can voluntarily submit information about testing of automated driving systems to NHTSA, and the public can view the information using NHTSA’s interactive tool.


Europe contributed a considerable market share in 2022 and is anticipated to grow at a CAGR of 3.0% over the forecast period. The growing adoption of electric vehicles is on the rise in Europe. EV manufacturers require specialized testing equipment to assess battery performance, charging infrastructure compatibility, and overall vehicle safety.


The rest of the world is anticipated to witness the second-highest CAGR over the forecast period. Increasing awareness of vehicle safety among consumers has led to greater demand for testing equipment for safety features, including Anti-lock Braking Systems (ABS), airbags, and Electronic Stability Control (ESC). Growing industrialization and positive economic growth have led to a growing demand for passenger cars and commercial vehicles. The high market share can be attributed to increasing investment by OEMs to set up car production facilities and growing demand for passenger cars among the middle-class income group. In January 2020, Mercedes-Benz partnered with Bosch to build a state-of-the-art Vehicle Test Center in Brazil. Besides trucks and buses, it will also be possible to test passenger cars, light commercial vehicles, and motorcycles in the future.


KEY INDUSTRY PLAYERS


Focus on Partnerships and Acquisition by Market Players to Gain Competitive Edge


Various domestic vehicle manufacturers and international players consistently develop advanced strategies for competitive advantage. Many companies are adopting several market strategies, such as new test equipment launches, setting up test centers, acquisitions, and partnership & collaboration strategies to enable market growth.


List of Key Companies Profiled: 



  • HORIBA Ltd. (Japan)

  • Siemens AG (Germany)

  • Continental AG (Germany)

  • Robert Bosch GmbH (Germany)

  • ABB (Switzerland)

  • PHINIA Inc. (U.S.)

  • MAHA Maschinenbau Haldenwang GmbH & Co. KG (Germany)

  • K.S. Engineers (Austria)

  • Softing Automotive Electronics GmbH (Germany)

  • Vector Informatik GmbH (Germany)


KEY INDUSTRY DEVELOPMENTS:



  • July 2023 –Suzhou Chunfen Test Technology Services Co., Ltd (CFI), one of the leading automotive testing providers based in China, was acquired by Applus Reliable Analysis Inc. The new acquisition is aimed at consolidating all automotive component testing in one place. It also aimed at expanding its current portfolio in China, along with optimizing and facilitating the process for local and international OEMs.

  • June 2022 – HORIBA UK partnered with Sentronics to launch a new fuel consumption sensor, Ultrasonic Fuel Consumption Measurement Sensor, HORIBA RealFlow, for the automotive market. The sensor provides real-time measurement of fuel consumption for automotive validation and verification test applications.

  • July 2022 Softing Automotive Electronics, a wholly owned subsidiary of Softing AG, won a contract with a southern German manufacturer of premium vehicles to develop and supply a production system for diagnosing and parameterizing vehicles in production.

  • February 2021 – HORIBA announced the extension of automation capabilities, STARS VETS, for electrified vehicles and real driving emissions testing. STARS VETS is part of HORIBA’s STARS Automation platform, which enables increased test cell efficiency and usability.

  • November 2021 – Continental announced the offer of its Qualification Lab services to outside partners. Continental’s US-based Qualification Labs, located in Deer Park, Illinois, and Detroit, Michigan, provide testing and analysis capabilities to support product development. Companies can partner with Continental for testing in research, development, and production.


REPORT COVERAGE


The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the automotive test equipment 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.


An Infographic Representation of Automotive Test Equipment Market

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Report Scope & Segmentation



















































ATTRIBUTE



DETAILS



Study Period



2017-2030



Base Year



2022



Estimated Year



2023



Forecast Period



2023-2030



Historical Period



2017-2021



Growth Rate



CAGR of 3.44% from 2023 to 2030



Unit



Value (USD Billion)



Segmentation



By Location



  • Production Testing

  • Service Testing



By Propulsion



  • ICE

  • EV



By Vehicle Type



  • Passenger Cars

  • Commercial Vehicles



By Region



  • North America (By Location, By Propulsion, By Vehicle Type, By Country)


    • U.S. (By Vehicle Type)

    • Canada (By Vehicle Type)

    • Mexico (By Vehicle Type)


  • Europe (By Location, By Propulsion, By Vehicle Type, By Country)


    • U.K. (By Vehicle Type)

    • Germany (By Vehicle Type)

    • France (By Vehicle Type)

    • Rest of Europe (By Vehicle Type)


  • Asia Pacific (By Location, By Propulsion, By Vehicle Type, By Country)


    • China (By Vehicle Type)

    • India (By Vehicle Type)

    • Japan (By Vehicle Type)

    • South Korea (By Vehicle Type)

    • Rest of Asia Pacific (By Vehicle Type)


  • Rest of the world (By Vehicle Type, By Material, By Sales Channel, By Country)






Frequently Asked Questions

As per the Fortune Business Insights study, the market size was USD 10.11 billion in 2022.

The market will likely grow at a CAGR of 3.44% over the forecast period (2023-2030).

The passenger cars segment is expected to lead the market due to the rising ownership of cars globally.

Increasing demand for electric vehicles and autonomous vehicles is expected to increase the demand for global market significantly.

Some of the major players in the market are HORIBA Ltd., Robert Bosch, Continental AG, and Siemens AG.

Asia Pacific dominated the market in 2022.

High cost of testing equipment may restrain market growth.

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