North America Automotive High Performance Electric Vehicles Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

North America Automotive High Performance Electric Vehicles Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The North American automotive high-performance electric vehicles market was valued at USD 12.80 billion in 2021, and it is expected to reach USD 56.29 billion by 2027, registering a CAGR of 28% during the forecast period.

The COVID-19 pandemic hindered the growth of the market, as there was a disruption in the production of vehicles due to the supply chain collapse across the world. However, the market is expected to witness significant growth during the forecast period due to increasing awareness about the environmentally positive impacts of electric vehicles and various initiatives taken by governments of different countries.

Over the medium term, one of the latest trends gaining traction in this market is the development of fuel cell vehicle (FCV) technology for range extension in high-performance electric vehicles. Instead of an engine, this variant uses a fuel cell to extend the range of the battery by charging through an electric motor. Additionally, an increasing number of governments are promoting the adoption of FCVs. Therefore, this is likely to consequently augment the growth of the global HPEV market in the coming years.

Governments are providing monetary benefits such as zero to very less registration fees and exemption in import tax, purchase tax, and road tax. Apart from providing subsidies, governments are also making favorable policies for the development of charging infrastructure. The federal Internal Revenue Service (IRS) tax credit is USD 2,500 to USD 7,500 per new EV purchased for use in the United States.

Enactment of stringent emissions and fuel economy norms, and increasing government initiatives, in terms of subsidies and benefits for increasing the adoption rate of electric vehicles, are expected to witness major growth during the forecast period. The United States is likely to dominate the high-performance electric vehicle (HPEV) market during the forecast period, as it is the largest manufacturer of HPEV in the North American region.

Key Market TrendsGrowing Demand for High Performance Electric Commercial Vehicles

The demand for long-range electric vehicles has been increasing in the North American region. This is due to the unavailability of a charging station for passengers traveling on highways in remote areas. Manufacturers have focused on improving the range of their products by increasing battery capacities.

The limited range of electric vehicles is a major factor that is restraining the growth of the market. To curtail this, numerous charging stations and outlets are being constructed across the North American region, with the United States possessing the highest number of outlets in 2021.

Truck manufacturers, such as Daimler, Tesla, and Navistar International Corp., are racing to overcome the challenges of replacing diesel engines with batteries, as international organizations have been improving and implementing stringent exhaust emissions and fuel economy norms. As a result, governments of different states and commercial vehicle makers are planning to invest in charging infrastructure development. For instance,

• In May 2021, a public engagement session conducted by the Minnesota Department of Transportation focused on improving the charging station facilities that can aid the services of electric delivery and freight trucks.

Vehicle manufacturing companies across the country have developed new products to cater to the demand from different end users. For instance;

• In April 2021, Daimler started accepting preorders on its Freightliner class-8 eCascadia and eM2 medium-duty electric trucks in the United States. The company claims to produce the trucks by the end of 2022.

United States Expected to Lead the Market

As the United States is one of the potential markets for high-performance electric vehicles, high-energy Li-ion batteries and advanced powertrain parts contribute a major role in propelling the market studied. Government initiatives are expected to improve the opportunities for the industry. For instance,

• In December 2021, the Government of the United States announced that all vehicles acquired by the government must be emission-free by 2035. These will replace the 600,000 United States government vehicles currently in use.

The demand for electric buses is also increasing gradually owing to its advantage of saving fuel costs without harming the environment. For instance;

• The adoption of electric buses is expected to save a lot of fuel costs for transit agencies in the country. In Chicago, the research found that two electric buses save nearly USD 24,000 of annual fuel expenses.

The Gigafactory set up by Tesla in Nevada, the United States, is another important step to reaching the global battery needs for different vehicles manufactured across the world. The factory is a huge 1.9 million sq. ft facility with recently ramped up mass production of Li-ion batteries that are seen as the most economical and efficient battery solutions for electric vehicles currently.

The tax credits offered by the government to electric vehicle buyers are a huge growth factor for the market. Multiple investments into developing the charging infrastructure to keep up with the projected increase in EV demand are being observed. For instance, Charge Point, a market leader in EV charging, partnered with Mercedes in June 2021 to establish an industry-leading EV Charging Experience to be set up and expanded across the North American region.

Competitive Landscape

The North American automotive high-performance electric vehicles market is dominated by several players, such as Tesla, General Motors Company, Nissan Motors, Mercedes-Benz, Toyota Motor Corporation, and Hyundai Motors. These companies are expanding their business by new innovative technologies, such as an increase in the range of kilometers per single charge so that they can have the edge over their competitors. For instance,

• In July 2022, General Motors announced it would spend USD4 billion to expand its Orion Assembly Plant in Michigan to build EVs and an additional USD 2.6 billion to build a battery manufacturing facility also in Michigan.
• In February 2022, Nissan Motor invested an amount of USD 500 Million to rebuild its United States assembly plant near Canton, Mississippi, to build two new electric vehicles.
• In March 2021, General Motors formed a new joint venture with lithium metal battery developer Solid Energy Systems to fast-track battery development as the company focuses on the development of high-performance electric vehicles of 400-500 miles capacity in the long term.
• In 2021, Ford Motors invested USD 11.4 billion to build Blue Oval City and Blue Oval SK Battery Park in Tennessee and Kentucky, respectively.
• Additionally, Tesla's lead over the North American electric vehicles market is gradually reducing. The General Motor Company has been observed to develop more autonomous vehicles, and the financial prospects of the company look better than those of Teslas in 2021.

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