Growth Drivers

• Strict Government Laws to Reduce Pollution- Significant environmental issues are being caused by the rising rate of carbon emissions from vehicles.  Moreover, vehicles are the most significant source of air pollution, as they use fossil fuels very frequently. Even though individual automobiles do not emit a lot of pollutants, the total number of vehicles on the planet is rather significant. When assessing how many pollutants a car emits, one of the most important parts to consider are the tires. To slow the growth of vehicle emissions, the governments of many nations have imposed several pollution standards on automakers. For instance, tire labeling is compulsory for all tires sold in Europe. The Tire Energy Label, which the European Union has introduced, provides precise information about the safety and ecological qualities of tires based on important standards such as noise levels, fuel efficiency, and wet surface braking. The embossed labels on the tires that list these standards might help the customers make better choices that reduce air pollution, improve road safety, and increase fuel efficiency. According to the three standards, the tires are ranked in order of best to worst, from A to G. When compared to tires in the "G" category, tires in the "A" category typically use 7.5% less gasoline. The tires in the "A" category also provide significantly more precise braking on wet surfaces at high speeds.

• Less Rolling Resistance- Vehicle rolling resistance is a major factor in carbon emissions. As rolling resistance rises, the amount of energy needed to overcome friction rises as well, increasing the number of pollutants that are released. This contributes to the vehicle type's overall weight being reduced, which results in fuel savings. Green tire development makes it possible to use less gasoline and hence lower rolling resistance. The energy needed for the tires to make contact with the road and deform increases owing to rolling resistance. A thorough control of the composite interaction between the tire structure, tread pattern, and rubber compound is also necessary to decrease rolling resistance. For instance, NAS Transportation Research Board found that it was technically and economically feasible to reduce the average rolling resistance of replacement tires by 10%. This would improve the fuel economy of passenger cars by 1% to 2%, saving 1.2 to 2.3 billion gallons of fuel annually across the country.

• Rising Penetration of Vehicles- In Europe there were ~405 million vehicles in the first quarter of 2022, distributed among EU and non-EU nations.

• Increase in the Development of Transportation Infrastructure - It is predicted that, from now until 2040, approximately USD 2 trillion in investments in transportation infrastructure would be required for its development globally.

• Increased Investment in Energy Transition – It was determined that the global investment in the energy transition will exceed ~750 billion in 2021.

Challenges

• Lack of Awareness Regarding the Benefits of Green Tires - The barrier to the market of green tires is thought to be a lack of awareness in emerging markets. On the other hand, the benefits of using CNG and crossover vehicles are well-known to consumers. In any case, people are unaware of the benefits of green tires and how they help reduce fuel consumption, so they frequently choose cheaper alternatives. Additionally, it is predicted that the sale of green tires in low and middle-income countries will be affected by a few public and private-sector efforts to protect the environment in these nations through cheaper options. For instance, according to studies, the average consumer pays less attention to the benefits of green tires in emerging markets such as India and Indonesia.
• Availability of Alternate Cost-Effective Substitutes
• Increasing costs for raw materials- The materials used to make green tires are synthetic and organic in use. Such materials can have erratic availability and costs. The cost of raw materials has also been rising rapidly in recent years. For manufacturers of green tires, the rising cost of raw materials is a serious issue. Moreover, the production of green tires, silica, butyl, and silane are the major ingredients in rubber and the  demand-supply imbalance, the price of these raw materials has been rising steadily over the past few years.