Alternative Fuel Vehicles Global Market Report 2024

The alternative fuel vehicles market size has grown rapidly in recent years. It will grow from $527.77 billion in 2023 to $628.58 billion in 2024 at a compound annual growth rate (CAGR) of 19.1%. Historical growth can be attributed to various factors, including oil price volatility, increasing environmental consciousness, concerns regarding energy security, infrastructure development, and significant investments and innovations made by automakers within the industry.

The alternative fuel vehicles market size is expected to see rapid growth in the next few years. It will grow to $1244.04 billion in 2028 at a compound annual growth rate (CAGR) of 18.6%. Anticipated growth is driven by consumer acceptance and preferences, global market expansion, enhanced market competitiveness, increased environmental concerns, and sustained regulatory support. Key trends expected in this period include the development of hydrogen fuel cells, utilization of biofuels and sustainable energy sources, the growth of electric vehicles, regulatory initiatives promoting low emissions, and the expansion of charging infrastructure.

The surge in fossil fuel prices is anticipated to act as a catalyst for the expansion of the alternative fuel vehicles market in the foreseeable future. Fossil fuels, comprising hydrocarbon-based materials of biological origin found within the earth's crust, serve as significant energy sources. Escalating fuel costs are compelling developing and underdeveloped nations to heavily rely on importing fossil fuels, thereby exerting increased pressure on emerging economies. Consequently, this surge in demand is expected to drive the market for alternative fuel vehicles, such as CNG, hydrogen, and electric vehicles, among others. Notably, in 2021, as reported by The International Energy Agency, the price of crude oil surged from $20 per barrel in mid-2020 to around $70 per barrel in mid-2021, underscoring the pivotal role of escalating fossil fuel prices in bolstering the growth of the alternative fuel vehicles market.

The anticipated rise in electric vehicle adoption is poised to significantly drive the growth of the alternative fuel vehicles (AFV) market in the foreseeable future. Electric vehicles, utilizing electricity stored in batteries or fuel cells as their power source, play a pivotal role within the AFV market, contributing to the ongoing transition towards sustainable and eco-friendly transportation solutions. Notably, as reported by The International Energy Agency in July 2023, global sales of electric cars - encompassing battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) - exceeded 10 million in 2022, showcasing a remarkable 55% surge compared to 2021 figures. Moreover, during the third quarter of 2023, global sales of electric cars reached 2.3 million vehicles, demonstrating substantial growth of 25% when compared to the second quarter of 2022. This surge in electric vehicle adoption underscores its pivotal role in driving the expansion of the alternative fuel vehicles market, highlighting the significant impact of this growing trend on the industry's trajectory.

The prominent trend gaining momentum within the alternative fuel vehicles market is the increasing adoption of clean mobility solutions aimed at curbing emissions originating from fossil fuels. Vehicles utilizing alternative fuels such as CNG, hydrogen, biofuel, and biodiesel are associated with notably lower carbon emissions compared to vehicles relying on conventional petroleum and diesel fuels. Consequently, heightened environmental concerns among consumers have spurred governments worldwide to prioritize the adoption of clean mobility solutions through alternative fuel vehicles. Notable instances in this trajectory include actions by industry leaders, such as Maruti Suzuki India Limited, an Indian automobile manufacturer, which in January 2022 introduced a new CNG variant of the All-New Celerio, further bolstering its portfolio of environmentally conscious vehicles in India. Similarly, in June 2021, Jaguar Land Rover Automotive PLC, a UK-based multinational company operating in the alternative fuel vehicles market, unveiled a fuel cell prototype for a hydrogen-powered Land Rover Defender. This initiative aligns with the company's objective of attaining zero tailpipe emissions and minimizing carbon emissions throughout their products, supply chain, and operational processes. These strategic moves underscore the industry's concerted efforts towards advancing cleaner mobility solutions and transitioning to more sustainable transportation alternatives.

Major companies within the alternative fuel vehicles market are strategically engaging in partnership initiatives to foster innovation and broaden their market influence. These strategic collaborations involve leveraging the combined strengths and resources of partnering entities to achieve mutual growth and success. An illustrative example is the partnership formed in September 2022 between Ferguson Enterprises LLC, a US-based distributor specializing in plumbing supplies, and Ford Motor Company, a renowned US-based automobile manufacturer, aimed at advancing alternative fuel sources. This collaborative pilot program aims to evaluate the efficacy of fuel cell technology within the Ferguson fleet while providing Ford with crucial real-world usage data. Ferguson intends to share comprehensive vehicle data and insights on the technology's performance, thereby facilitating Ford's refinement of engineering specifications tailored for commercial vehicle duty cycles. This strategic alliance highlights the concerted efforts within the industry to drive innovation and enhance the market's approach toward alternative fuel vehicles.

In June 2021, Ford, a prominent US-based manufacturer of automobiles and commercial vehicles, completed the acquisition of Electriphi, Inc. for an undisclosed sum. This strategic acquisition is anticipated to bolster Ford's capabilities by integrating Electriphi's cutting-edge technology tailored for pro electric vehicles and services. The aim is to enhance the commercial customer experience by providing a comprehensive solution for fleet depot charging challenges. This move aligns with Ford's preparations to introduce electric variants of its commercial vehicles. Electriphi, Inc., operating in the alternative fuel vehicles market, is a US-based technology company specializing in this domain.

Major companies operating in the alternative fuel vehicles market report are Volkswagen AG, Toyota Motor Corporation, Ford Motor Company, General Motors Company, Mitsubishi Motors Corporation, Bayerische Motoren Werke AG, Honda Motor Co. Ltd., Hyundai Motor Company, Tesla Inc., Nissan Motor Co. Ltd., BYD Auto Co. Ltd., BYD Company Limited, Zhejiang Geely Holding Group Co. Ltd, NIO Inc., Arrival Ltd., Xpeng Inc., Rivian Automotive Inc., Lucid Motors Inc., Faraday Future Inc., Proterra Inc., Karma Automotive LLC, Lordstown Motors Corp., Mahindra Electric Mobility Limited, Workhorse Group Inc., Canoo Inc., Bollinger Motors LLC, Lightning eMotors Inc., Arcimoto Inc., Fisker Inc., Atlis Motor Vehicles Inc., Aptera Motors Corp., ElectraMeccanica Vehicles Corp., Lion Electric Company, Elio Motors Inc., Nikola Corporation, Hino Motors Ltd., Tata Motors Limited, SAIC Motor Corporation Limited, Zhongtong Bus Holding Co. Ltd., Xiaopeng Motors, Volta Trucks Limited.

Asia-Pacific was the largest region in the alternative fuel vehicle market in 2023. The regions covered in the alternative fuel vehicles market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the alternative fuel vehicles market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary types of alternative fuel vehicles encompass Compressed Natural Gas (CNG), hydrogen-powered vehicles, electric vehicles, and various other fuel types. CNG, which stands for compressed natural gas, serves as an environmentally friendly alternative to gasoline, produced by compressing natural gas to less than 1% of its original volume. These alternative fuel vehicles are found in various forms, including passenger cars and commercial vehicles, and are applied across a range of sectors such as transportation, chemical, agriculture, industrial, and other diverse applications.

The alternative fuel vehicles market research report is one of a series of new reports that provides alternative fuel vehicles market statistics, including alternative fuel vehicles industry global market size, regional shares, competitors with a alternative fuel vehicles market share, detailed alternative fuel vehicles market segments, market trends and opportunities, and any further data you may need to thrive in the alternative fuel vehicles industry. This alternative fuel vehicles market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The alternative fuel vehicles market consists of sales of natural gas vehicles, fuel cell electric vehicles and flexible fuel vehicles. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.