How Electric Vehicles Are Changing the Tyre Industry
With a market value of around $50 billion in the last few years and a year-to-year growth rate of 2%, as stated by the AlixPartners report, the tyre industry is recognised for tough competition, slow growth, and low profit margins.
However, the launch of electric vehicles in India and abroad presents a whole new opportunity for tyre manufacturers. Regardless of their batteries and range, tyres are another crucial factor impacting EV development and growth. According to Michelin’s research, selecting adequate tyres can impact the range of electric vehicles by up to 15%.
Due to heavier design and quick acceleration, the electric vehicles burn tyres 20% faster than ICE vehicles, AlixPartners says, adding to a 50% higher cost. Other factors like noise-less tyre rolling requirements, durable threat design, and rubber alternate material sourcing significantly impact tyre manufacturers.
This tyre industry analysis unveils the real impact of electric vehicles on tyre manufacturers and the global tyre market.
History of Tyre Industry
The history of the tyre industry commenced in the mid-19th century when Charles Goodyear invented vulcanised rubber in 1839. The process of treating rubber with sulphur to increase durability and elasticity was called vulcanisation, and it revolutionised the way people use rubber for diverse applications, including tyre manufacturing.
The industry was further transformed with the invention of the first practical pneumatic (air-filled) tyre by John Boyd Dunlop in 1888. This laid the foundation for modern tyre technology because pneumatic tyres became standard for bicycles and other vehicles.
During the 20th century, the tyre industry saw significant growth, especially during WWII when tyre manufacturers faced a shortage of natural rubber. This incident led to the development of synthetic rubber, which can be mass-produced and offer several benefits, like enhanced resistance to abrasion and chemical degradation.
The latter half of the 20th century was for high-performance tyres designed for various drive terrains. In the 1980s and 1990s, tyre manufacturers started to focus on the development of tyres with low resistance capable of providing higher fuel efficiency. During this phase, steel-belted radial tyres, run-flat tyres, and all-season tyres were introduced.
Due to the growing business challenges in the 21st century, particularly on climate change and environmental issues, tyre manufacturers are now stepping up to optimise their business operations for sustainability and innovate products made up of sustainable materials that have a lower impact on natural resources.
Related: What Are Blue Chip Stocks? Features, Advantages, & Disadvantages
How Are Electric Vehicles Changing the Tire Industry?
Vehicle Weight
EVs are heavier than their traditional similarly sized combustion engine vehicle counterparts because they have hefty batteries instead of combustion engines. Normally, electric vehicles can be up to 30% heavier than ICE vehicles in the same category, causing the vehicles to take longer time to stop.
For instance, if the tyres were built for regular vehicles used in EVs, they would wear much faster because they are not designed to meet the requirement of extra weight of batteries. Because of this deciding factor, the tyre companies have the unique challenge of producing new tyres specifically designed for EVs, capable of withstanding the increased weight and ensuring durability and stability on the drive.
Rubber Alternates
Electric vehicles are launched to replace the traditional combustion engine-powered vehicles and limit people’s environmental challenges. The gasoline and diesel engine-powered vehicles produce greenhouse gases, which cause global warming and affect natural resources negatively.
The evolution of electric vehicles is regarded as a significant step in reducing the carbon footprint. In response to tackle this challenge, the companies in the tyre industry have to find a way to contribute to the betterment of the environment, which might start by researching alternatives to rubber, a primary element used in tyre manufacturing.
Noise Reduction
One of the significant attributes of electric vehicles is their silent and smooth operation, unlike traditional ICE-powered vehicles. Given this unique feature, tyre manufacturers are now required to develop innovative electric vehicle tyres capable of rolling smoothly without creating much noise.
To deal with this challenge, the manufacturers are testing various threat patterns designed to minimise the noise while rolling. Moreover, they are also researching alternate materials and compounds that can help lower the rolling sound and make the electric vehicle drive even more silent.
Tread Wear
Another noteworthy feature of electric vehicles is their ability to pump power quickly, accelerating the vehicle quicker than ICE vehicles. The instantaneous torque produced by EVs is so powerful that it can instantly accelerate to achieve its top speed at the moment driven by pushing the pedal. However, the instant high torque and vehicle weight can also put more pressure on the tyre, resulting in quick wear and tear.
So, tyre companies must test various tread pattern technologies and adjustments in their electric vehicle tyre design that would increase the durability and lifespan. The manufacturers can achieve this by reducing the rolling resistance and using some special compounds in their tyre manufacturing process.
Restorative Braking
Most electric vehicles, particularly electric cars, launched in the market use next-generation braking systems, a testament to technological advancement in automotive engineering. Unlike traditional ICE vehicles, the EVs use smart technology, known as regenerative or restorative braking, to stop.
When drivers hit the brake pedal in EVs, instead of slowing down and causing heat, they, in return, convert the kinetic energy into electrical energy, which gets stored back into the vehicle’s battery packs for later use. It’s like the car gets charged every time you brake. However, this process is only possible if the electric car tyres have unique treads and compound materials that are specifically designed for EVs.
Related: What is Mortgage Loan? Types and Benefits
What Does the Future of the Tyre Industry Look Like?
With the consistent focus on sustainability and limiting climate change, the demand for electric vehicles continues to rise. India’s passenger vehicle sales for FY 2023 recorded 10% YoY growth, while the EV sales doubled during this period. The Counterpoint Research report also states that India’s EV sales are expected to increase by 66% in 2024 and market share to double from 2% to 4%.
From a global perspective, the electric two and three-wheeler segment contributes 13% of total sales, making it a major segment of electric vehicles globally. According to the International Energy Agency, almost 18% of new vehicles sold in 2023 were electric. The report also states that the sales of EVs will reach nearly 17 million in 2024, 20% higher compared to 2023 sales figures.
While the sale of electric vehicles in India and abroad is soaring, the demand for electric vehicle-specific tyres, especially for electric car tyres, will also rise. This fact gets clear with Smithers latest forecasts that predict the global market for electric vehicle tyres will increase to $46.2 billion by 2027 from $15.6 billion in 2022.
Conclusion
With the urgent need to tackle climate change, the government’s constant push to promote alternate mobility solutions to people and rapid advancement in technology have enabled both EV companies and EV tyre manufacturers to push boundaries so they can come up with innovative products and solutions.
As the market continues to see several promising EV products and the launch of electric vehicle-specific tyres with unique treads and special compounds, it’s sure that these technologies are ready to redefine the EV industry by setting a new benchmark of constant growth and innovation.
Suggested Posts
Top 10 Richest States in India (2024)
Why is Storytelling So Important in the Growth of Your Business?
TDS on Sale of Property by NRI & Significance of Lower Deduction Certificate
