PUBLISHER: Mordor Intelligence | PRODUCT CODE: 1190705
PUBLISHER: Mordor Intelligence | PRODUCT CODE: 1190705
The electric vehicle repair service is expected to reach USD 20.42 billion, registering a CAGR of 14.36% over the next five years.
Despite the COVID-19 pandemic, sales of electric vehicles witnessed significant growth in 2020 compared to 2019. With the increasing electric vehicle stock across the world, the demand for associated electric vehicle repair services is expected to increase during the forecast period. According to the International Energy Agency, at the end of 2021, the global electric vehicle stock (BEV and PHEV) reached 16.5 million.
Over the long term, the sale of electric vehicles is anticipated to increase as a result of a variety of government initiatives. These initiatives will positively affect market growth. For instance, rapid electric vehicle uptake in underdeveloped auto markets has increased electric vehicle shares even more, which, in turn, will help the market expand.
The Chinese market caught up during the first six months of 2022. Electric vehicles account for nearly a quarter of all new passenger car registrations, with BEVs accounting for 19% and PHEVs for the remaining 5%. This is a fourfold increase over 2020 and an eight percentage point increase over last year's market share.
As a result, China has already exceeded the 20% EV share target outlined in the 14th Five-Year Energy Saving and Emission Reduction Work Plan, two years ahead of the 2025 target year. The increasing sales of EVs will lead to demand for the EV repair market during the forecast period.
However, customers are visiting repair shops due to deferred maintenance from before the pandemic, which will slightly boost demand in this market. China, Japan, and South Korea are the market leaders for the repair of electric vehicles in the Asia-Pacific region. The global market share for EVs in Asia-Pacific is dominated by China, which is the largest manufacturer and consumer of electric vehicles. The market for repairing electric vehicles has been expanding in nations like South Korea and India with the growing sales of battery and fuel cell electric vehicles.
The rapid adoption of electric vehicles may have a significant impact on the target market. Electric vehicles are highly adopted because of government initiatives and support for improving the environment to reduce reliance on crude oil. It is anticipated that battery electric vehicle repair and maintenance costs will be comparatively lower than those of internal combustion engine (ICE) vehicles. Making products and operations more sustainable, such as using reclaimed solutions and developing a technical understanding of electric vehicle components will give industry participants a competitive edge.
EV sales are rapidly increasing. In the first half of 2022, 4.3 million new BEVs and PHEVs were delivered, a +62% increase over the first half of 2021. However, the regional growth pattern is changing. After two years of rapid growth, EV sales in Europe increased by only 9% in the first half of 2022 compared to the first half of 2021. Despite a weak overall light vehicle market that fell by 17% year-on-year in H1 of 2022, EV sales in United States and Canada increased by 49% year-on-year.
In June 2022, Toyota Motor Corporation launched the all-new 2023 Corolla Cross Hybrid, Corolla Sedan, in United States for new SUV buyers. In August 2021, United Kingdom government promised to invest GBP 20 million (around USD 27 million) in projects that help develop zero-emission heavy goods vehicles (HGVs). The Department for Transport (DfT) estimates that the money may help increase the number of zero-emission HGVs on United Kingdom roads and improve the infrastructure for such vehicles.
In April 2021, the Spanish Energy Ministry announced that the government in Spain approved a plan to spend up to EUR 800 million (USD 950 million) until 2023 to encourage electric car sales in the country. The aforementioned factors will have a positive impact on target market growth, as the target market's growth is dependent on electric vehicle sales.
Electric cars sold in United States are subject to the same safety regulations as all other passenger vehicles, except low-speed neighborhood electric vehicles. According to the Department of Energy (DOE), EV battery packs must also be protected by a sealed shell and able to withstand tests that involve overcharging, extremely high temperatures, fires, accidents, submersion in water, vibrations, and short-circuiting. Additionally, EVs must be able to turn off their electrical systems in the event of a crash or short circuit and use "insulated high-voltage lines".
In simple terms, an EV with a lithium-ion battery pack performs similarly to a car with an internal combustion engine and a full tank of gas because an EV can travel hundreds of miles between charges with the right balance of battery capacity, curb weight, and aerodynamic efficiency. However, the peak power of an EV tends to decrease as the battery level increases.
Furthermore, the demand for electric vehicles opens up new business opportunities for OEMs, suppliers of aftermarket parts and components, producers of tires, and other participants in the industry supply chain. As electric vehicles become more widely available, IC engine and vehicle parts and components service centers will expand into them.
Tesla Inc. proposed a 100,000-square-foot facility in St. Pete, Florida, in April 2022. Sales, service, and deliveries for the region will be handled by the new Tesla center. On a 4.21-acre site where there is already a 100,000-square-foot structure that serves as a Kanes Furniture liquidation center, the new Tesla facility will be situated.
In 2021, new registrations of zero-emission vehicles (ZEVs) reached a significant milestone, accounting for 5.2% of all new motor vehicle registrations. In 2021, there were 1.6 million new motor vehicles registered in Canada, a 6.5% increase over 2020.
In 2021, the three largest provinces of Canada registered 93.4% of new zero-emission vehicles; 42.8% of new ZEVs were registered in Quebec, 27.7% in British Columbia, and 22.9% in Ontario.
Based on the aforementioned factors, the target market is expected to witness significant growth during the forecast period.
The target market is concentrated, as major players hold significant market shares. Also, some companies promote either the expansion of their footprint or awareness of electric vehicle repair. This will contribute to the firm gaining a large share of the market.