Low-Carbon Propulsion Market Forecasts to 2030 - Global Analysis By Vehicle Type (Heavy-Duty Vehicle and Light-Duty Vehicle), Fuel Type, Mode, Electric Vehicle, Rail Application, End User and by Geography

According to Stratistics MRC, the Global Low-Carbon Propulsion Market is accounted for $22.02 billion in 2024 and is expected to reach $62.52 billion by 2030 growing at a CAGR of 19.0% during the forecast period. The term low-carbon propulsion describes the application of fuels and technologies intended to lower greenhouse gas emissions from machinery and automobiles. By utilizing alternative energy sources like electricity, hydrogen, bio fuels, and synthetic fuels, this strategy aims to reduce the transportation sector's carbon footprint. Electric propulsion systems drastically reduce emissions by using battery-powered motors in place of internal combustion engines. Additionally, hydrogen fuel cells provide a zero-emission alternative by producing electricity solely from the conversion of hydrogen gas into water vapor.

According to the International Energy Agency (IEA), the adoption of low-carbon propulsion technologies, such as electric vehicles and hydrogen fuel cells, is critical to achieving the global targets for reducing greenhouse gas emissions by 2050.

Market Dynamics:

Driver:

Growing need for sustainable energy

There is a growing demand for cleaner energy alternatives as consumers become more conscious of the effects traditional fossil fuels have on the environment. This is especially noticeable in urban settings where worries about air quality are piquing interest in hybrid and electric car technology. Moreover, growing numbers of consumers are choosing cars with lower emissions and a smaller lifetime environmental impact as a result of the shift towards sustainable living and green mobility solutions.

Restraint:

High starting prices

Low-carbon propulsion technologies, like hydrogen fuel cell vehicles and electric vehicles (EVs), still have a substantially higher initial cost than conventional internal combustion engine (ICE) vehicles. Furthermore, this is mostly because of the costly raw materials and parts-like nickel, cobalt, and lithium-that are needed to make batteries, as well as the intricate production procedures. In a similar vein, the production of hydrogen fuel cells is expensive since they require pricey and rare materials like platinum.

Opportunity:

Expanding public assistance and incentive programs

The commitment of governments across the globe to promote sustainable transportation solutions and lower greenhouse gas emissions is growing. Through grants, tax breaks, subsidies, and rebates, this commitment is translated into opportunities for manufacturers and consumers who adopt low-carbon propulsion technologies. Moreover, government programs, for instance, provide funding for the purchase of hydrogen and electric fuel cell vehicles, the installation of charging infrastructure, and research and development for novel propulsion technologies.

Threat:

Market volatility and economic uncertainty

Trade disputes, recessions, and geopolitical unrest are examples of global economic fluctuations that can seriously jeopardize the low-carbon propulsion market's expansion. Both consumers and businesses may place a higher priority on cost savings during economic downturns than on investments in novel, possibly pricey technologies like hydrogen or electric vehicles. Furthermore, unpredictability in raw material prices can result from market volatility worldwide, especially when it comes to vital materials like nickel, cobalt, and lithium that are needed to produce batteries.

Covid-19 Impact:

The COVID-19 pandemic had a major effect on the low-carbon propulsion market by upsetting international supply chains, leading to shortages of vital parts like batteries and semiconductors, and postponing the development and introduction of electric and hydrogen-powered automobiles. Moreover, vehicle sales temporarily decreased as a result of economic uncertainty and lower consumer spending, and infrastructure development-such as the construction of charging stations and hydrogen refueling networks-was impeded by lockdowns and travel restrictions.

The Light-Duty Vehicle segment is expected to be the largest during the forecast period

In the low-carbon propulsion market, the light-duty vehicle segment usually holds the largest market share. The reason for this dominance is that due to their affordability, user-friendliness, and expanding infrastructure of charging stations, electric and hybrid cars are becoming increasingly popular among both individual consumers and businesses. Furthermore, the global growth of this market is being propelled by improvements in battery technology, higher production efficiency, and consumer demand for environmentally friendly mobility options.

The Electric segment is expected to have the highest CAGR during the forecast period

In the market for low-carbon propulsion, the electric segment is anticipated to grow at the highest CAGR. The primary causes of this explosive growth are the growing consumer demand for cleaner and more efficient cars, as well as significant advancements in battery technology and a discernible drop in battery prices. Governments all around the world are pushing hard for the adoption of electric vehicles (EVs) through incentives, subsidies, and tighter emissions regulations. Moreover, the shift to electric mobility is being expedited by the development of charging infrastructure and growing environmental consciousness, which places the electric segment as the fastest-growing in the low-carbon propulsion market.

Region with largest share:

The market for low-carbon propulsion is dominated by the North American region. This dominance is mostly attributable to large government policy investments, large R&D projects aimed at developing low-carbon propulsion systems, and large investments in clean energy technologies. Additionally, this regional growth is being led by the United States and Canada because of their shared commitment to cutting greenhouse gas emissions and improving energy efficiency in the transportation sector.

Region with highest CAGR:

The low-carbon propulsion market is growing at the highest CAGR in the Asia-Pacific region. Growing government initiatives and investments in environmentally friendly transportation technologies in nations like China, Japan, and India are the main drivers of this explosive growth. Significant progress in low-carbon propulsion technologies is being made in the region owing to its growing automotive industry, expanding infrastructure for alternative fuels, and growing focus on lowering carbon emissions. Furthermore, as the economies of the Asia-Pacific region work to meet strict environmental standards and accelerate their shift to renewable energy, this trend is predicted to continue.

Key players in the market

Some of the key players in Low-Carbon Propulsion market include Ford Motor Company, Airbus SE, Bombardier, Honda Motor Co. Ltd, Nissan Motor Corporation, Daimler AG, ABB Ltd, Hyundai Motor Group, Yara International ASA, Mitsubishi Motors Corporation, Tata Motors Ltd, Boeing Company, Volkswagen AG, Siemens AG, Toyota Motor Corporation, Porsche AG and Tesla, Inc.

Key Developments:

In August 2024, Honda Motor Co., Ltd. (Honda) and Yamaha Motor Co., Ltd. (Yamaha) announced that they have reached an agreement for Honda to supply Yamaha with electric motorcycle models for the Japanese market, based on the Honda "EM1 e:" and "BENLY e: I" Class-1 category* models, as an OEM (original equipment manufacturer).

In July 2024, Airbus SE has entered into a binding term sheet agreement with Spirit AeroSystems in relation to a potential acquisition of major activities related to Airbus, notably the production of A350 fuselage sections in Kinston, North Carolina, U.S., and St. Nazaire, France; of the A220's wings and mid-fuselage in Belfast, Northern Ireland, and Casablanca, Morocco; as well as of the A220 pylons in Wichita, Kansas, U.S.

In December 2023, Ford Motor Co. has reversed its decision to sell its only remaining factory in Tamil Nadu, India, reaching a recent agreement with the JSW Group led by Sajjan Jindal, according to a report by the Economic Times. This surprising move has led to speculation that the American company might be contemplating a comeback into the world's third-largest automotive market, having exited more than two years ago.

Vehicle Types Covered:

• Heavy-Duty Vehicle
• Light-Duty Vehicle

Fuel Types Covered:

• Compressed Natural Gas (CNG)
• Liquefied Natural Gas (LNG)
• Ethanol
• Hydrogen
• Electric

Modes Covered:

• Rail
• Road

Electric Vehicles Covered:

• Electric Passenger Car
• Electric Bus
• Electric Two-Wheeler
• Electric Off-Highway Vehicle

Rail Applications Covered:

• Passenger
• Freight

End Users Covered:

• Aerospace
• Automotive
• Maritime
• Railway
• Other End Users

Regions Covered:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • Italy
  • France
  • Spain
  • Rest of Europe
• Asia Pacific
  • Japan
  • China
  • India
  • Australia
  • New Zealand
  • South Korea
  • Rest of Asia Pacific
• South America
  • Argentina
  • Brazil
  • Chile
  • Rest of South America
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Qatar
  • South Africa
  • Rest of Middle East & Africa

What our report offers:

• Market share assessments for the regional and country-level segments
• Strategic recommendations for the new entrants
• Covers Market data for the years 2022, 2023, 2024, 2026, and 2030
• Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
• Strategic recommendations in key business segments based on the market estimations
• Competitive landscaping mapping the key common trends
• Company profiling with detailed strategies, financials, and recent developments
• Supply chain trends mapping the latest technological advancements

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