The global electric vehicle testing, inspection, and certification market size was valued at USD 887.52 million in 2022. It is estimated to reach USD 2,899.86 million by 2031, growing at a CAGR of 14.06% during the forecast period (2023–2031).
Electric cars were created to replace conventional modes of transportation, which pollute the atmosphere. Due to various technological advances, electric cars have grown in popularity. In addition, electric vehicles (EVs) outperform conventional vehicles in fuel economy, greenhouse gas emissions, maintenance, ease of charging at home, smoother ride, and reduced engine noise. Battery, hybrid, and plugin hybrid electric cars are the three varieties of electric vehicles. Similarly, electric cars do not need engine oil adjustments, but they are marginally more costly than their gasoline counterparts.
Electric vehicles require rigorous safety checks for safe installation and system integration. Testing, inspection, and certification of electric vehicles are prominent service factors for the development of electric vehicles and is one of the critical steps for the progress of car manufacturers and suppliers. A wide range of testing and certification services are required, from a charging infrastructure to the vehicle's battery and to ensure the vehicle is in line with industry standards.
The rising environmental concerns and the negative impact of conventional vehicles have unlocked the door to alternative vehicles in the market. Batteries, a crucial component of EVs, are anticipated to become much more affordable as time passes, pointing to a bright future for EVs. In addition, automakers are expected to make sizeable investments to meet the rising demand for electric vehicles and play a critical role in the market's development.
Additionally, factors such as higher fuel economy, low carbon emission and maintenance, the convenience of charging at home, smoother drive, and reduced sound from the engine will boost the deployment of electric vehicles. The number of EV models introduced by electric vehicle companies is increasing rapidly with time. Therefore, increased demand for electric vehicles for commercial and passenger segments will reinforce the market growth.
Various federal rules relating to passenger safety and environmental issues apply to the worldwide electric vehicle industry. Major regulatory bodies impose tariffs and other trade restrictions to target and prevent suppliers that breach pollution and safety regulations. This forces manufacturers to build vehicles that are more fuel-efficient and emit fewer pollutants while also having safety features such as anti-lock brakes (ABS), electronic brake-force delivery (EBD), airbags, and pollution control systems such as catalytic converters with turbochargers and exhaust gas recirculation (EGR) systems.
The inspection unit is responsible for maintaining the safety of electric vehicles. Electric vehicles which are maintained and function properly, meeting all the security measures, are less prone to accidents. Therefore, testing, inspection, and certification ensure the safety of passengers and pedestrians. Additionally, developed nations like Germany, the U.K., and the U.S. are promoting the use of electric vehicles as they reduce emissions, which positively impacts the market's growth.
Electric vehicles have made steady progress over the years. Their adoption is now becoming feasible for various business and personal uses due to battery life and performance advances. The gradual improvement in the batteries of electric vehicles makes the inspection and testing of newly developed elements difficult. Researchers at Stanford created a protective nano-coating that expands as the temperature of the battery rises and is an example of significant advancement in lithium-ion batteries. Not only batteries but different electric vehicles have different charging systems which involve various charging components which need to be inspected, tested, and certified by the companies. This requires a skilled team and adequate resources, which are a hurdle to market growth.
The global market has a highly fragmented competitive landscape, with a presence of a large number of key players. According to the SR report, the market is on track to see fierce competition among the world's leading companies for a larger market share. As a result, businesses will be compelled to employ aggressive marketing and business tactics, like mergers and acquisitions, to grow their market share. Emerging economies like China and India will likely offer companies lucrative business opportunities.
Furthermore, the market in these developing countries has a lot of potential. The volume of goods exported from these countries to developed countries has increased dramatically in recent years. With rising incomes, middle-class citizens in the BRICS countries (Britain, Russia, India, China, and South Africa) expect verified quality products and services. As a result, it is expected to play a significant role in the testing, inspection, and certification industry's future strategic decisions and campaigns.
The global electric vehicle testing, inspection, and certification market is bifurcated into the application, service type, and source.
Based on application, the global electric vehicle testing, inspection, and certification market is bifurcated into safety and security, connectors, communication, and EV charging.
The safety and security segment dominates the global market and is projected to exhibit a CAGR of 14.23% over the forecast period. Electric vehicles must pass stringent safety tests. Electric cars must meet the same quality requirements as conventional vehicles. The protection specification includes various technical details, including data management, privacy, construction, occupant accident prevention, and electric shock insulation. The international standard ISO 6469 covers most EV safety concerns.
The norm for EV charging connectors or plugs differs by region and style. Although no standardized plug infrastructure exists, a critical mass of significant automakers in North America and Europe embrace the combined charging system (CCS). Japanese manufacturers use CHArge de MOve (CHAdeMO), while China uses GB/T, the world's largest electric vehicle industry. The guidelines seek a standard conductive charging device design for electric vehicles, including operational requirements and physical and dimensional specifications for the vehicle inlet and mating connector.
Based on service type, the global electric vehicle testing, inspection, and certification market is bifurcated into testing, inspection, and certification.
The testing segment owns the highest market share and is anticipated to grow at a CAGR of 15.03% over the forecast period. EVs are tested based on three parameters: mechanical, temperature, and electrical. Due to the extreme continuous motion of the wheels and the irregular surfaces with which the vehicle can come into contact, mechanical stress, and its consequences are very severe in the automobile industry. As a result, a battery device must withstand these intense shocks for an extended period. Furthermore, temperature fluctuations occur regularly, with cool nights and hot days, resulting in repeated thermal pressures that must be considered. Moreover, designers would be able to calculate the current pull from the batteries to the motors in usual conditions and thereby make decisions on cable size and fuse settings.
Electric vehicles do not require specific components to be serviced regularly compared to ICE vehicles. An electric vehicle user stops paying for tune-ups, oil adjustments, ventilation system flushes, engine servicing, air filter repair, spark plugs, and drive belts. According to sources, electric car owners spend about a third of what conventionally driven vehicle owners do on routine maintenance. Electric vehicles (EVs) are not, though, maintenance-free. To keep the vehicle's warranty valid, all manufacturers require owners to perform several routine inspections and facilities. Therefore, owners need to follow the maintenance plan to get the vehicle insured.
Based on source, the global electric vehicle testing, inspection, and certification market is divided into in-house and outsourcing.
The outsourcing segment is the most significant contributor to the market and is anticipated to exhibit a CAGR of 14.95% over the forecast period. Multiple testing, inspection, and certification supplies use outsourcing testing, inspection, and certification services or third-party service providers to ensure consistency with national and international quality and safety requirements. Outsourcing allows businesses to devote more resources to improving their basic business practices, reducing overhead costs, and providing quicker and superior services. This increases production and operation reliability, contributing to the company's net income.
Since conducting in-house testing, inspection, and certification services allow automakers to have greater control of services and staff; in-house services are expected to grab a larger share of the electric vehicle testing, inspection, and certification industry. In-house research firms are famous for giving organizations complete control, as they can conveniently monitor every testing, inspection, and certification process, which helps the company provide good service.
Based on region, the global electric vehicle testing, inspection, and certification market is bifurcated into North America, Europe, China, South America, the U.K., the Middle East and Africa, and Asia-Pacific and Japan.
Europe is the most significant global electric vehicle testing, inspection, and certification market shareholder and is estimated to exhibit a CAGR of 13.94% during the forecast period. The key drivers of the increase in demand for testing, inspection, and certification in this region are the government's increasing mandates for certification and enforcement to sell and consumers' rising knowledge of quality requirements. Recent safety scandals, including those of Volkswagen, BMW, and Daimler, highlight the importance of independent testing and certification facilities. In addition, companies have not only imposed stricter rules and requirements and expanded reliance on a third party for appraisal, allowing independent testing, inspection, and certification companies to flourish in the region. Europe also has several automotive OEMs, such as Volkswagen Group, Groupe PSA, Bayerische Motoren Werke AG, Fiat Chrysler Automobiles, Volvo, and Daimler AG. The demand for the market is anticipated to be propelled by the increasing demand from the OEMs present in the region.
North America is anticipated to exhibit a CAGR of 11.93% over the forecast period. The introduction of emerging technology and strict environmental norms transformed the entire industry's outlook for enforcing regional requirements and regulations. Moreover, the increasing demand for inspection and testing processes of electric vehicles at regular intervals is expected to boost the market. In 2020, Bureau Veritas, a global pioneer in testing, inspection, and certification facilities, announced plans to hire additional engineers, surveyors, regulators, auditors, laboratory technicians, and company support staff. In addition, the company plans to recruit over 2,000 people in the U.S. The nation's testing, inspection, and certification services availability is anticipated to increase.
In South America, the government is turning the country's public bus fleet to electric, which is expected to fuel the demand in the coming years. In January 2021, BYD announced that it had received a total order of 1,002 pure-electric buses from Bogota, Colombia. These buses will be delivered between 2021 and the first half of 2022 and used on 34 bus routes in five parts of the area, creating opportunities for the electric vehicle testing, inspection, and certification market. In addition, oil is a significant source of national revenue and domestic fuel in many Middle Eastern countries. So, their governments are concentrating on green energies and sustainable transportation technology and implementing economic and energy diversification policies. This, in turn, will create opportunities in the testing, inspection, and certification market.
The economy of the Asia-Pacific region is being propelled by the region's emerging economies, particularly South Korea, Taiwan, and others. End-user sectors in the automobile industry are expected to improve their testing, inspection, and certification operations because of the enforcement of multiple trade agreements. Manufacturers must comply with various international and national certifications to give authenticity to consumers around the region. In addition, various certification schemes have been implemented to ensure product quality continuity, thus stimulating regional business development. The value of certifications will rise as customer consciousness grows among the middle class, creating an opportunity for the Asia-Pacific and Japan electric vehicle testing, inspection, and certification service industry.
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