Alternative Fuel Vehicle (AFV) Market Size, Share, Growth, and Industry Analysis, By Type (Electric Vehicle, Natural Gas/Compressed Natural Gas, and Others), By Application (Home Use and Commercial Use), Regional Forecast To 2031

Updated On: 15 April 2024

Alternative Fuel Vehicle (AFV) Market Report Overview

• 

• Request a Free Sample to learn more about this report

The global alternative fuel vehicle (AFV) market size was USD 147040 million in 2020 and is projected to touch USD 691889 million by 2031, at CAGR of 15.2% during the forecast period.

The global COVID-19 pandemic has been unprecedented and staggering, with the alternative fuel vehicle (AFV) market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden rise in CAGR is attributable to the market's growth and demand returning to pre-pandemic levels once the pandemic is over.

An alternative fuel vehicle (AFV) is a vehicle that uses fuel other than traditional gasoline or diesel to power its engine. AFVs are designed to reduce dependency on fossil fuels and lower greenhouse gas emissions. They are also known as low-emission vehicles or clean vehicles. AFV offers environmental benefits by reducing air pollution, greenhouse gas emissions, and reliance on fossil fuels. They play a crucial role in promoting sustainability and mitigating climate change.

The market is projected to flourish with an outstanding growth rate over the forecast period. The AFV market is dynamic and evolving rapidly as technology advances, infrastructure expands, and consumer demand increases. It represents a significant opportunity for industry players, governments, and consumers to transition toward cleaner and more sustainable transportation options. Additionally, the market is bifurcated by type, by application, and by regional expansion of the market. In respect of type of product, the electric vehicle is the leading segment in the market. On the other hand, home use is the biggest application in the market to produce higher demand for AFV throughout the projection period. 

COVID-19 Impact: Pandemic Obstructed Global Supply Chains & Sales of Electric Vehicles

The overall automotive industry experienced a significant decline in vehicle sales during the COVID-19 pandemic due to economic uncertainty, reduced consumer spending, and lockdown measures. Alternative fuel vehicles were not immune to this downturn, and sales of electric vehicles and other AFVs were also affected. Also, the global supply chains for vehicle components and batteries were disrupted due to factory closures and restrictions on movement. This led to production delays and challenges in meeting the demand for AFVs. However, this health crisis highlighted the vulnerability of global systems and the urgent need to address environmental issues. As societies look towards recovery and rebuilding, there is a renewed emphasis on sustainable development and climate action. This focus on sustainability can contribute to the long-term growth of the AFV market.

Latest Trends

"Rising Trend of Electric Automobiles Generates the Market Opportunity" 

The market for alternative electric vehicles has been growing swiftly with the latest development and emerging trends in the market which are contributing to fuel the demand for AFVs. As electric vehicles have been gaining significant momentum in the market. The sales of EVs have been increasing due to advancements in battery technology, improved charging infrastructure, and declining costs. Major automotive manufacturers are expanding their electric vehicle offerings, and several countries have set ambitious targets to transition to all-electric vehicle fleets in the coming years. Furthermore, the development of a robust charging infrastructure network is crucial for the widespread adoption of electric vehicles. Governments, utilities, and private companies are investing in the expansion of charging stations, including fast-charging options, to improve the convenience and accessibility of EV charging. Wireless charging technologies and innovative charging solutions are also being explored. Such recent developments and trends of the market are credited to propel the alternative fuel vehicle (AFV) market growth in the coming years. 

Alternative Fuel Vehicle (AFV) Market Segmentation

• 

• Request a Free Sample to learn more about this report

• By Type Analysis

According to type, the market can be bifurcated into electric vehicle, natural gas/compressed natural gas, and others.

• By Application Analysis

Based on application, the market can be divided into home use and commercial use.

Driving Factors

"Growing Environmental Concerns and Climate Change Accelerate the Demand for EV"

Climate change and environmental concerns are the primary drivers of the market. The growing awareness of the environmental impact of fossil fuel-based vehicles, including greenhouse gas emissions and air pollution, has led to increased interest in AFVs. The need to mitigate climate change and improve air quality is a significant driver for consumers, governments, and businesses to transition to cleaner and more sustainable transportation options. Thus, the factor is likely to contribute to enhancing the growth of the market throughout the forecast 2022-22028.

"Government Regulations and Incentives Elevate the Growth of the Market"

The market is also driven by government regulations and incentives. As, governments worldwide are implementing policies, regulations, and incentives to promote AFVs. These measures include emission standards, fuel efficiency targets, zero-emission vehicle mandates, tax credits, subsidies, and grants. Such government support encourages consumers to adopt AFVs and stimulates the market's growth. These driving factors collectively contribute to the increasing popularity and market demand for AFVs as cleaner and more sustainable alternatives to traditional gasoline and diesel vehicles.

Restraining Factors

"High Cost and Limited Charging Infrastructure Can Curb the Market Evolution" 

The high costs of electric vehicles can be a certain restraining factor to confine the demand for the electric fuel vehicles. AFVs, particularly electric vehicles (EVs), often have a higher upfront cost compared to conventional gasoline or diesel vehicles. The cost of batteries, specialized components, and limited production volumes contribute to the higher price tag. This higher initial cost can be a barrier to adoption for some consumers, even though there may be long-term savings in fuel and maintenance costs. Along with this, limited driving range and charging infrastructure are also a concern for potential AFV buyers, especially for electric vehicles.

Alternative Fuel Vehicle (AFV) Market Regional Insights

• 

• Request a Free Sample to learn more about this report

"Asia Pacific Dominates the Market with the Government Supportive Policies and Incentives"

As per market research, Asia Pacific, particularly China is the leading region in the market. China has emerged as the world's largest market for electric vehicles (EVs) and leads in AFV adoption. The Chinese government has implemented supportive policies and incentives, including purchase subsidies, charging infrastructure development, and mandates for automakers to produce and sell a certain percentage of new energy vehicles (NEVs), which include EVs and plug-in hybrids. The combination of government support, a large population, and a rapidly growing middle class has propelled China to the forefront of the AFV market. Additionally, more than one-third of the alternative fuel vehicle (AFV) market shares are held by China in the region.

Key Industry Players

"Key Players Constantly Pushing Boundaries to Drive Sustainable Transportation"

With regard to key players, major companies in the alternative fuel vehicle (AFV) market influence the market’s growth through their product innovation, technology advancements, market strategies, infrastructure investments, government engagement, and collaborations. Their efforts collectively contribute to the growth and development of the AFV market by expanding consumer adoption, improving infrastructure, and driving competition and innovation. Moreover, various companies are operating in the market to leverage their expertise in the automotive industry. For instance, Tesla is a prominent player in the AFV market, focusing on electric vehicles. The company has gained recognition for its luxury electric cars, including the Tesla Model S, Model 3, Model X, and Model Y. Tesla has been a pioneer in battery technology and has played a significant role in driving EV adoption worldwide.

List of Market Players Profiled

• Tesla
• BMW Group
• BYD
• Yutong
• Daimler AG
• BAIC
• Renault
• Toyota Motor Corporation
• General Motors
• SAIC
• Geely
• Fiat Chrysler Automobiles
• Volkswagen
• Chery
• JMCG
• JAC
• Ford
• Hyundai
• Dongfeng
• Zotye
• Mitsubishi
• Honda
• Changan

Report Coverage

This report defines the alternative fuel vehicle (AFV) market. It emphasizes the market value, expected CAGR, and USD value over the forecast period, before and after the impact of the COVID-19 pandemic restrictions on the international market, and how the industry is going to turn the corner is also stated in the report. The report provides significant market data with its product type and product applications, end-use details, and an idea of the market growth in the future. This report also provides an understanding of the growing market trends and developments and their effects on the market growth, driving factors along with restraining factors that impact the market dynamics. Along with this, the leading region, key players of the market, and their tactics to beat the market competition, sustainable policies, their collaboration, mergers, companies’ profile, previous years’ revenue, profit & loss, and market position based on their share value in the market, are also explained in the report.