Electric Off-Road Vehicle Market Forecast to 2028

The Electric Off-Road Vehicle market is projected to reach US$ 2,234.0 million by 2028 from US$ 724.1 million in 2021; it is expected to grow at a CAGR of 18.9% from 2022 to 2028.

The environmental credentials of electric vehicles are one of the most critical factors driving the growth of the electric off-road vehicle market. Electric automobiles are completely eco-friendly as their engines are powered by electricity, thus emitting no hazardous gases or smoke into the environment. According to a new assessment published by the European Environment Agency, the most significant environmental risk to health in Europe is air pollution. The European Environment Agency (EEA) estimated that air pollution is responsible for more than 400,000 premature deaths yearly in Europe. Air pollution is responsible for causing heart disease and strokes, which have become the most common reasons for premature deaths, followed by lung cancer and lung diseases. Several other health impacts are attributable to air pollution, such as asthma, reduced lung function, and pregnancy, which has implications on fertility, newborns, and children. Road transport continues to be a foremost contributor to air pollution. For instance, in 2015, it was responsible for 39% of atmospheric nitrogen oxides (NOx) and 11% of particulate matter (PM10 and PM2.5) emissions, as per European Court of Auditors All these harmful impacts of air pollution and the growing awareness about them created a significant upsurge in demand for electric vehicles, which is anticipated to propel the global electric off-road vehicle market growth over the coming years.

Impact of COVID-19 Pandemic on Electric Off-Road Vehicle Market Growth

The COVID-19 pandemic wreaked havoc on various industry verticals, in terms of business and operational factors, including all-electric off-road vehicle market players. Countries worldwide announced temporary lockdown and travel restrictions due to the COVID-19 pandemic. Such restrictions, while hindering the movement of people, strongly affected the manufacturing and sales of electric off-road vehicles globally. As a result of the lower production in 2020, the distribution of electric off-road vehicles decreased proportionally. Automobile and components production sites had to be closed worldwide, footfall in recreational spots fell drastically, and governments in various regions started placing temporary movement restrictions. Such factors resulted in a major decline in outdoor recreational activities. Collectively, all such dynamics negatively impacted the electric off-road vehicle market size. The global price rise of lithium was another negative impact of the pandemic, coupled with the semiconductor shortage. Prices of lithium in 2020 were nearly 400% higher than that in 2019. Semiconductor shortage also led to the high price of electric off-road vehicles’ components. Such factors led to a rise in the prices of these vehicles. Hence, despite resuming manufacturing of such vehicles in Q4 of 2020, demand remained low, resulting in a decline in the electric off-road vehicle market size.

The US accounted for the largest share in the electric off-road vehicle market in North America. The country has the largest consumer base for outdoor recreational activities, posing great growth opportunities for electric off-road vehicle players. Such factors promote the growth of the region's electric off-road vehicle market size. Over recent years, tourists and sports enthusiasts throughout the country have been displaying a growing inclination toward the trails of off-road vehicles such as utility terrain vehicles (UTVs) and all-terrain vehicles (ATVs) coupled with related activities for sports and recreational activities purposes. A few leisure activity organizers and tourism councils are building tracks and sports setups for such vehicles to fascinate and hold visitors. A variety of public lands and state parks in the US offer miles of roads for ATV rides and trails to sightseeing spots. Some parks even make it easier to secure permits online. For instance, The Florida State Forest Service has a wide range of terrains, high-altitude mountain paths, and sand dunes to suit any experience level or preference. Thus, this rising trend to satiate the thrill-seekers is expected to create ample opportunity for electric off-road vehicle market growth.

The application of electric off-road vehicles increased in agricultural and military fields. For instance- UTV models for farming applications were recently launched by Deere, a US-based large farm and agricultural equipment manufacturer. Moreover, John Deere updated its legendary Gator Utility Vehicles (UVs) line in September 2020. The heavy demand for vehicles from the agriculture sector for several applications significantly contributed to such launches and upgrades. Similarly, as a result of the increase in military budgets coupled with rising geopolitical tensions and polarizationworldwide, as well as productive applications of all-terrain vehicles in military maneuvers due to their functionality and modularity, it is anticipated that demand for specialized military all-terrain vehicles will upsurge shortly. Such demand will automatically boost the growth of the electric off-road vehicle market.

Volcon, Inc.; Polaris, Inc.; PIERER Mobility; Intimidator, Inc.; and Zero Motorcycles are among the key electric off-road vehicle market players.

The overall electric off-road vehicle market size has been derived using both primary and secondary sources. To begin the research process, exhaustive secondary research has been conducted using internal and external sources to obtain qualitative and quantitative information related to the market. The process also serves the purpose of obtaining an overview and forecast of the electric off-road vehicle market size with respect to all market segments. Also, multiple primary interviews have been conducted with industry participants and commentators to validate the data and gain more analytical insights. Participants of this process include VPs, business development managers, market intelligence managers, national sales managers, along with external consultants such as valuation experts, research analysts, and key opinion leaders, specializing in the electric off-road vehicle market.