Reduced emissions and better air quality, less reliance on foreign oil, and cost savings due to higher fuel efficiency are all advantages of using alternative fuel vehicles (AFVs). Due to the need to lower emissions, enhance air quality, and lessen reliance on foreign oil, AFVs are growing in popularity. Technology advancements have also increased the efficiency and cost-effectiveness of AFVs, making them a more desirable option for many consumers.
Increasingly strict emissions regulations and the desire to rely less on foreign oil are what is driving the demand for alternative fuel vehicles. Governments all over the world have therefore implemented rules and rewards to promote the use of AFVs. Additionally, consumers can now afford alternative fuels more affordably thanks to price drops for things like electricity, natural gas, and biofuels.
Alternative fuel vehicles are superior to conventional gasoline-powered vehicles in many ways. For instance, AFVs produce fewer emissions, which enhances air quality. Additionally, AFVs are more economical to operate than gasoline-powered vehicles because they use less fuel to cover the same distance. Additionally, AFVs have a lower environmental impact than gasoline-powered vehicles because they are powered by renewable energy sources like electricity and biofuels.
The market for alternative fuel vehicles (AFVs) is predicted to be worth USD $7.4 billion in 2021 and USD $12.2 billion by 2031, growing at a CAGR of 7.1% during that period.
During the forecast period, it is anticipated that rising consumer demand for environmentally friendly and fuel-efficient vehicles will drive market expansion. Because they use alternative fuels that are less expensive than gasoline and diesel, AFVs are more cost-effective than conventional vehicles. Compared to conventional vehicles, AFVs emit significantly fewer emissions, which contributes to a decrease in both air pollution and global warming. Compared to conventional vehicles, AFVs have higher fuel efficiency, which lowers fuel consumption and related costs. Due to their increased fuel efficiency, decreased emissions, and lower maintenance costs, AFVs have longer vehicle lives than conventional vehicles.
The market for alternative fuel vehicles is expanding as a result of stricter emissions regulations, technological advancements, and falling prices for alternative fuels. Additionally, the availability of tax credits and government incentives has reduced the cost of AFVs for consumers. And finally, the adoption of AFVs has been influenced by the rising awareness of their environmental advantages.
However, the lack of a sufficient infrastructure to support the adoption of AFVs is one of the major issues the AFV market is currently facing. This includes a lack of refueling stations and charging stations, which makes it challenging for customers to switch to AFVs. The high price of AFVs is another barrier to their widespread use. Because they are more expensive than conventional vehicles, AFVs face significant obstacles to adoption. Another obstacle preventing the adoption of AFVs is range anxiety. This anxiety about running out of fuel before getting somewhere is a big concern for prospective AFV buyers. The lack of knowledge about the advantages of AFVs is one of the biggest problems facing the AFV market. The financial savings, environmental advantages, and other benefits of switching to an AFV are not widely known by consumers. One of the biggest challenges the market is currently facing is the fact that AFV technology is still in development. The adoption of AFV technology is significantly hampered by the fact that it is not yet developed enough to meet market demands.
Volkswagen AG (Germany), Ford Motor Company (U.S.), BMW AG (Germany), Nissan Motor Corporation (Japan), General Motors Company (U.S.), Honda Motor Co. Ltd. (Japan), Hyundai Motor Company (South Korea), Renault (France), Daimler AG (Germany), Toyota Motor Corporation (Japan), BYD Company Limited (China), Groupe PSA (France), Volvo AB (Sweden), and others are the major players in the alternative fuel vehicle
Electric vehicles are accelerating
The global alternative fuel vehicle (AFV) market is dominated by electric vehicles, which are expected to grow at a CAGR of more than 11.7% during the forecast period. This is because electric cars are becoming more and more popular because of their increased efficiency, lack of emissions, and low operating costs.
The commercial segment dominated with highest share
The commercial use segment is anticipated to dominate the alternative fuel vehicle (AFV) market globally, expanding at a CAGR of more than 10.1% over the course of the forecast period. This is a result of businesses using more alternative fuel vehicles in their daily operations.
Asia Pacific region dominated the market
The alternative fuel vehicle (AFV) market is dominated by Asia Pacific, which is expected to grow at a CAGR of more than 11.1% during the forecast period. This is because alternative fuel vehicles are becoming more and more popular in nations like China, India, Japan, and South Korea.
The effect of Covid 19 on the market for alternative fuel vehicles
The market for alternative fuel vehicles (AFVs) has been significantly impacted by the COVID-19 pandemic. Due to the sharp decline in consumer spending and the general economic downturn, the pandemic has caused a sharp decline in demand for these vehicles. Additionally, the demand for AFVs has decreased due to the lockdown procedures and travel restrictions implemented in many nations. The market for AFVs has also been impacted by the drop in oil prices because alternative fuel prices have increased in comparison. Some customers have resorted to buying conventional gasoline and diesel vehicles as a result. Due to factory closures brought on by lockdown measures, the pandemic has also caused delays in the production of AFVs. Last but not least, the pandemic has increased demand for electric cars because they provide a green transportation option. Due to this, some manufacturers are now concentrating on electric vehicles rather than AFVs, which has further decreased the demand for AFVs. Because of the general economic downturn and the rise in demand for electric vehicles, the COVID-19 pandemic has had a negative overall effect on the market for alternative fuel vehicles (AFVs).
Current Alternative Fuel Vehicle (AFV) Market Development
• The introduction of a new class of electric vehicle known as a plug-in hybrid electric vehicle is one recent development in the market for AFVs (PHEV). PHEVs have the ability to switch between electric and gasoline power as needed because they can run on both an electric motor and a gasoline engine. Due to their ability to switch to gasoline power when the battery is low, they have a longer range than conventional electric vehicles.
• Additionally, PHEVs typically have larger battery packs than conventional electric cars, which improves their efficiency and increases their range. Finally, PHEVs are a desirable option for drivers who are concerned about the environment because they typically emit fewer emissions than conventional gasoline-powered vehicles.
Alternative Fuel Vehicle Market Scope
|Revenue forecast in 2031
|USD $12.2 billion
|CAGR of 7.1% during 2021-2031
|Type, Application, Regions
|North America, Europe, Asia Pacific, South America, Middle East and Africa
|Key Players Profiled
|Volkswagen AG (Germany), Ford Motor Company (U.S.), BMW AG (Germany), Nissan Motor Corporation (Japan), General Motors Company (U.S.), Honda Motor Co. Ltd. (Japan), Hyundai Motor Company (South Korea), Renault (France), Daimler AG (Germany), Toyota Motor Corporation (Japan), BYD Company Limited (China), Groupe PSA (France),
Key Segment of Alternative Fuel Vehicle (AFV) Market
By Type Overview (USD Billion)
• Electric Vehicle
• Natural Gas/Compressed Natural Gas,
By Application Overview (USD Billion)
• Home Use
• Commercial Use
By Region Overview (USD Billion)
• Rest of Asia Pacific
• Rest of North America
• Rest of Europe
Middle East and Africa