Driven by technological advancements in electric vehicle (EVs) systems and increasing EV sales worldwide, the EV testing, inspection, and certification market is projected to reach $4.04 billion by 2031 from $1.1 billion in 2022.
According to a recent report published by ResearchAndMarkets, the electric vehicle testing, inspection, and certification market is expected to grow at a CAGR of 15.49% during the forecast period 2022-2031.
Testing, inspection, and certification are crucial in EV development and for the success of vehicle suppliers and manufacturers. One of the main factors influencing the growth of the testing, certification, and inspection industries for EVs is the increased need for their safety and efficiency.
The EV sector must also adhere to stringent restrictions and national and international safety mandates. Electric and hybrid vehicle development is expected to increase over the coming years, creating lucrative opportunities for those testing, certifying, and inspecting these vehicles.
According to the report, the EV testing, inspection, and certification market is in the growth phase, and therefore, the market is expected to flourish in the forecast period.
Growing EV demand in developing markets, stringent regulatory requirements imposed by Governments on the industry, and consistently increasing instances of vehicle recall due to component failure are all driving this market's expansion.
Furthermore, the increasing introduction of electric cars, rising customer perception of product quality and safety, and incorporation of technology advances with the rising adoption of connected devices in the EV industry provide opportunities for market players to expand.
Impact of COVID-19
The EV testing, inspection, and certification market's revenue growth was adversely affected by the rapid spread of COVID-19. During the pandemic, major electric vehicles companies such as Fiat Chrysler Automobiles, Ford, PSA Group, Volkswagen, Ducati, Tesla, BMW, Rolls-Royce, and General Motors halted the manufacturing of electric vehicles.
Frequent lockdowns and safety mandates also impeded production processes and the supply chain. As a result, the demand for testing, inspection, and certification services drastically decreased because of the decline in EV sales on a global level, the report noted.
The report observed that the electric vehicle testing, inspection, and certification market based on the vehicle type segment is expected to dominate the passenger vehicles segment till 2031. Based on application, the vehicle safety and security segment is expected to dominate the market throughout the forecast period.
Based on service type, the testing segment is expected to dominate the market because of vehicle technology advancements and consumers becoming environmentally aware. Additionally, the mandatory emission targets have led the OEMs to introduce EVs in the market. To keep up with industry standards, testing of electric vehicles has become necessary.
Based on product type, the digital segment is one of the fastest-growing segments. It is likely to dominate the market, offering a wide development scope in the forecast period.
Based on sourcing, the in-house segment is one of the fastest-growing segments. It is likely to dominate the market because of businesses' experience in carrying out in-house TIC activities under total control.
Europe is home to several EVs and testing, inspection, and certification service providers. As a result, the region is expected to dominate the electric vehicle testing, inspection, and certification market during the forecast period.
Courtesy: ResearchAndMarkets. NB: Photo is representational; courtesy: Mercedes Benz.