Automotive Retrofit Electric Vehicle Powertrain Market Trends

Growth Drivers

• Demand for electric vehicle powertrains for retrofitted cars: Automakers emphasize converting older cars to electric vehicles, propelling the automotive retrofit electric vehicle powertrains to expand. International Energy Agency in 2024 stated that sales of electric vehicles increased by 3.5 million in 2023 compared to 2022, a 35% annual increase. About 18% of all cars sold in 2023 were electric vehicles, up from only 2% five years prior in 2018 and 14% in 2022. The luxury vehicle share has increased, augmented by the rising demand for retrofitted vehicles. Furthermore, more nations around the world are adopting emission-related standards and regulations. Impelled by the growing need for automatic transmissions in cars to improve driving comfort as these vehicles do not require gearboxes.
• Improvements in lithium battery technology: Lithium battery technology has resulted in a 90% decrease in the cost of EV batteries, increasing the affordability, range, and comfort of EVs. According to BNEF’s survey of 2020, the cost of an average automotive battery observed a decrease of 13% in 2020, reaching USD 137/kWh. Particularly in developed countries, consumer preference for electric mobility alternatives has grown as a result of ongoing fuel price increases and environmental concerns. Driven by this, automakers are focusing on developing e-powertrain options that are lightweight, compact, and suitable for daily commuting.
  
  Furthermore, government policies are likely to encourage domestic manufacturing of electric cars, and other non-financial incentives will drive the market value for electric vehicle powertrains. A 2024 report by Research Nester estimated that the global fuel price index crossed 188 index points in 2024, as compared to 100 in previous years. This increase is mainly propelled by the Russia-Ukraine war impacting a continuous shortage of energy supplies, which led to a spike in figures in 2022.

Challenges

• Limited EV charging facility: While several countries are currently installing EV charging stations, the majority of nations have not been able to meet the necessary number of installations. Therefore, there are fewer public EV charging stations available, which lowers the number of people using electric cars. The majority of countries still lack this kind of infrastructure for charging restrains the revenue share.
• Concerns regarding passenger safety: Retrofitting requires making changes to the original vehicle design, which, if done incorrectly, may influence safety issues. For consumers to feel confident and for the market revenue to expand, retrofit vehicles must be safe and dependable.