Allied Market Research (AMR) in its new report titled, “Low-speed Electric Vehicles Market” forecasts the global low speed electric vehicle market to reach $7,617.3 million by 2025, registering a CAGR of 15.4% from 2018 to 2025.
In 2017, North America accounted for the highest share in the global low speed electric vehicle market.
A low speed electric vehicle is a motor vehicle that is four wheeled and whose top speed ranges from 20kmph to 40kmph along with a gross vehicle weight rating of less than 1,400 kg. The rules and regulations are followed by low speed electric vehicle as per defined by states & federals. The low speed electric vehicle is commonly known in the U.S. as a neighborhood electric vehicle.
Low speed electric vehicle runs on an electric motor that requires a continuous supply of energy from batteries to operate. There are a variety of batteries used in these vehicles such as lithium ion, molten salt, zinc-air, and various nickel-based designs. The electric vehicle was primarily designed to replace conventional ways of travel as they lead to environmental pollution. Low speed electric vehicles have gained popularity owing to numerous technological advancements. The electric vehicle outperforms the conventional vehicle providing higher fuel economy, low carbon emission, and maintenance.
According to the research firm the market growth is driven by stringent government rules and regulations toward vehicle emission and increase in fuel costs. In addition, rise in pollution, technological advancements, surge in automobile industry, and decrease in fossil fuel reserves have fueled the growth in the development and production of low speed electric vehicle.
The firm notes that High vehicle cost and lack of proper charging infrastructure are some of the major restraining factors of this market. Furthermore, proactive government initiatives and technological advancements in electric vehicles ensure lucrative growth opportunities for this market globally. This can be attributed to rise in the sale of automated vehicles globally. These features offer lucrative opportunities for the low speed electric vehicle demand globally.
According to AMR key players operating in the global low speed electric vehicle market are HDK Electric Vehicles, Bradshaw Electric Vehicles, Textron Inc., Polaris Industries, Yamaha Motors Co. Ltd., Ingersoll Rand, Inc., Speedway Electric, AGT Electric Cars, Bintelli Electric Vehicles and Ligier Group.
Stringent government rules and regulations toward vehicle emission
The conventional gas-powered vehicle makes use of an internal combustion engine to generate power. In an ideal scenario, the combustion system fully incinerates the fuel and only creates carbon dioxide and water as waste, however, the combustion system generates various greenhouse gases, leading to environmental pollution. On the other hand, an electric vehicle uses an electric motor powered with continuous supply of current; thus, it does not create any pollutants. The U.S., Germany, France, and China have implemented stringent government laws and regulations for vehicular emission, making it mandatory for the automobile manufacturers to use advanced technologies to combat high-emission levels in vehicles. A program launched by the California Air Resources Board (CARB) also includes guidelines for manufacturers to produce and deliver zero-emission vehicles (ZEVs), substantially boosting the adoption of electric vehicles.
Increase in fuel costs
Increase in fuel costs over the past decade has led to rise in adoption of electric vehicles as a mode of daily commute Moreover, with the limited sources of crude oil globally, the prices are expected to be high in the future. Although gasoline prices have been increasing, electricity costs have been low in many countries such as China, Germany, and Denmark. Electric vehicles equipped with electric motors help in maintaining higher speed more effectively as well as make the ride more comfortable on rough roads. Hence, rise in consumer inclination toward e-motors as a key mode of transport has fueled the growth of the market.
High cost of electric vehicles
High cost of electric vehicles is a major factor that restrains the growth of the low speed electric vehicle market. The cost of the battery and technology makes e-vehicles costlier than traditional vehicles or conventional cars. Moreover, use of lithium ion batteries or drive mechanism of motor incurs maximum cost, thereby restraining the growth of the market. Hence, surge in adoption of electric vehicles in countries other than China is limited by high costs. However, the low speed electric vehicle market is growing at a rapid rate globally, which may reduce the impact of this restraint in the near future.
Lack of proper charging infrastructure
The low speed electric vehicles battery source does not have any alternative source for charging. The shortage of charging points in cities is a major challenging factor for growth of the global low speed electric vehicle market. Thus, complete drain of the battery can create a problem for electric vehicle and can put the traveler at risk. Moreover, the implementation of supportive infrastructure required for electric vehicle in developing countries is less. In addition, prices of electric vehicles are also very high, which in turn hampers the overall growth of the low speed electric vehicle market.
Proactive government initiatives
A low speed electric passenger car operates on two energy sources: an internal combustion engine and an electric battery & motor/generator. It is a conventional internal combustion engine (ICE) vehicle with an oversized starter motor that can also be used as a generator, usually known as integrated starter-generator (ISG) or a belted alternator starter (BAS), and an oversized battery that powers the vehicle, which is recharged by the motor. Using gasoline diesel injection in vehicles can further decrease the emissions of hybrid vehicles, making it a zero-emission vehicle. On the other hand, it is also expected to increase the fuel economy of the vehicle, making it more economical than other electric and hybrid vehicles. Integration of GDI systems in hybrid vehicles creates various opportunities for leading players in the future.
Improvement in electric vehicles R&D & battery technology
Growth in urbanization and rise in attractive offers on electric vehicles from various governments are anticipated to offer lucrative opportunities for market expansion. With growing inclination of the consumers toward e-motors, governments of various countries are focusing on development of infrastructure for electric vehicle, including bicycle tracks, public charging stations, and others. For instance, Sanyo (Japan) opened two solar parking lots in Tokyo where around 100 electric vehicles can be recharged by solar panels. Furthermore, various e-bike battery and drive mechanism provider companies are innovating their product offerings for longer battery life, lower maintenance, higher speeds, and lower weights. In addition, low speed electric vehicle manufacturers are focusing on improvement of bike design for aesthetic purpose. Thus, all these factors are expected to offer potential growth opportunities for the market in the near future.