Feb. 8, 2017—According to a new analysis from Frost & Sullivan, the market for electric and hybrid vehicles is experiencing strong double-digit growth.
The report states the growth is due to favorable government policies, increasing incentives, declining lifetime ownership costs, and falling battery prices, all of which reduce the overall cost of the vehicle. To remain competitive in this dynamic market, suppliers must consistently develop more efficient internal combustion engines and electrified powertrains for different vehicle segments.
Frost & Sullivan's new analysis, Strategic Overview of Electric & Hybrid Vehicle Driveline Systems Market in North America, finds that with a compound annual growth rate of 49.2 percent between 2015 and 2022, plug-in hybrids with electric all-wheel drive will be the industry's fastest growing market segment. In addition, commercial production of fuel cell electric vehicles will commence by the end of this year and will most likely have a front-wheel drive (FWD) layout.
"Original equipment manufacturers (OEMs) are examining all possible options to reduce fuel consumption and emissions without sacrificing driving dynamics," said Frost & Sullivan mobility research analyst Kamalesh Mohanarangam. "Electric all-wheel drive (eAWD) technology is emerging as an advanced technology with rear-axle electrification, the most preferred eAWD architecture, due to its significant weight-saving potential when compared to front-axle electrification."
Ford, Toyota and Renault-Nissan account for 80.6 percent of the total FWD cars manufactured in North America, and the top 10 FWD models account for 68.9 percent of all electric and hybrid vehicles. Furthermore, 88.9 percent of FWD models come from the C and D vehicle segments, which, as a result, will also be responsible for the increasing uptake of eAWD. As more OEMs start offering eAWD, Tier 1 suppliers are expected to invest in technologies that offer more functionality at a lower cost.
"Japanese OEMs, in a race to offer the most fuel-efficient vehicles, are expected to offer FWD in 76 percent of the cars they manufacture, whereas about 45 percent of the cars manufactured by American OEMs are likely to sport either rear-wheel drive or AWD," Mohanarangam said.
