New York, July 23, 2020 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “North America Automotive Marketâ€“ Growth, Trends, and Forecast (2020 – 2025)” – https://www.reportlinker.com/p05934711/?utm_source=GNW
However, the COVID-19 pandemic issue across the world and the implementation of the United States-Mexico-Canada (USMCA) trade agreement in 2020 are few crucial factors that are likely to hinder the market growth during the forecast period.
Among the countries in the region, Mexico has emerged as one of the largest auto manufacturing hubs, as automakers from the United States have established their production facilities there, owing to the many incentives offered by Mexico, such as low production costs and low tariffs. However, the United States captured a major share of about 80% in the market studied in 2019, owing to its high vehicle sales volume in the region.
Key Market Trends
Increasing Sales of Electric Vehicles
The increasing focus on reducing vehicular emissions has shifted the focus of the automotive industry toward electric vehicles, which is driving the market. With the growing environmental concerns, governments and environmental agencies are enacting stringent emission norms and laws that may increase the manufacturing cost of electric drive trains and fuel-efficient diesel engines in the coming years.
North America has witnessed an unprecedented demand for electric vehicles over the last five years. For instance, in the United States, the electric vehicles sales jumped from 194,479 in 2017 to 361,307 in 2018, witnessing a jump in sales by as much as 81% in 2018. However, the sales for EVs came down slightly in 2019, reaching 329,528 during the same year. Though the 2019 sales proved flat to 2018, the growth rate since 2013 still averaged an impressive 25% per year. Although the sales may plunge in 2020 due to the COVID-19 pandemic, the long-term forecast of EV sales is still optimistic.
The role of incentives and mandates is key for the high demand for the electric vehicles. Several incentives are being provided by the governments to encourage the sales of electric vehicles, as all these countries are focusing on reducing their vehicle emissions. Some of them are:
In the United States, the EPA and NHTSA have proposed the implementation of the Safer Affordable Fuel-Efficient (SAFE) vehicles rule to be implemented from 2021 to 2026. The rule may set the standards for corporate average fuel economy and greenhouse gas emissions for passenger and light commercial vehicles. The Zero Emission Vehicles (ZEV) Program requires OEMs to sell specific numbers of clean and zero emission vehicles (electric, hybrid, and fuel cell-powered commercial and passenger vehicles). The ZEV plan aims at putting 12 million ZEVs on road by 2030.
United States Witnessed Faster Growth Rate During the Forecast Period
United States is one of the major automotive industries in the world, which contributes about at least 3% to the overall Gross Domestic Product (GDP) of the country. The country has manufactured close to 10.88 million vehicles in 2019, which is about 3.7% less than the previous year, 2018. This decline in manufacturing is mainly due to the increase in production costs and changes in supply chains of the automobile industry.
The total vehicle sales in the United States were 17.58 million, out of which passenger vehicles accounted for 32%, SUVs for 46%, light commercial vehicles for 19%, and medium and heavy commercial vehicles accounted for 3% shares.
As of June 2019, the majority of the 270 million cars, trucks, and buses in the United States were powered by internal combustion engines using gasoline or diesel fuel. With the emergence of electric vehicles, the government has been providing various tax benefits to support the purchase of electric vehicles.
The credit for plug-in electric vehicles is a federal tax incentive for electric vehicles, where the credit ranges from USD 2,500 to USD 7,500 per vehicle, depending on the vehicle’s battery capacity. This type of credit is available after the sale of 200,000 qualifying vehicles in United States. As of June 2019, General Motors (GM) and Tesla were the major manufacturers that have recached 200,000-vehicle limit.
The government is also supporting the research and development of electric vehicles in the form of annual appropriations to Office of Energy Efficiency and Renewable Energy (EERE). The government enacted about USD 344 million in FY 2019 for vehicle technologies.
In 2019, about 0.33 million electric cars were sold in United States, with Tesla accounting to major share in the market. Tesla Model 3, Tesla Model X and Tesla Model S accounted to 57% of the sales and Chevy Bolt and Nissan LEAF together accounted for 9% sales.
Furthermore, the government is supporting electrification of through the programs and incentives like the FTA’s Low or No-emission Vehicle Program and the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project that help agencies purchase advanced technology transit buses.
Ford, General Motors, Fiat-Chrysler are some of the important players in the North America Automobile Industry. The auto industry of the United States was previously dominated by the big three, General Motors, Chrysler, and Ford, who are currently losing their market share to automakers from relatively new players, such as Tesla and other foreign automakers based in Japan, South Korea, and Europe.
The foreign automotive manufacturers are expected to become a part of the mainstream automotive industry in the United States, to increase their market share in the United States, especially in the SUV segment.
The Mexican automotive industry is dominated by FCA, Ford, Toyota, General Motors, Mazda, Honda, and VW Group. Tier 1, 2, and 3 companies have seen new opportunities in supplying components to these OEMs and simultaneously reduce overall costs.
Reasons to Purchase this report:
– The market estimate (ME) sheet in Excel format
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Read the full report: https://www.reportlinker.com/p05934711/?utm_source=GNW
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