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Automotive Low Emission Vehicle Market Size

ID: MRFR//4317-HCR | 100 Pages | Author: Sejal Akre| September 2025

Automotive Low Emission Vehicle Market Size Snapshot

YearValue
2023USD 89.41 Billion
2032USD 155.0 Billion
CAGR (2024-2032)6.31 %

Note – Market size depicts the revenue generated over the financial year

The market for low-emission cars is estimated to grow at a fast pace, with a current market size of $ 89.41 billion in 2023, and is projected to reach $ 155.0 billion by 2032. This growth will be at a CAGR of 6.31 % from 2024 to 2032. The growing demand for environment-friendly transport solutions, driven by strict government regulations and consumer preference for sustainable mobility, is the main driver of the market. The development of battery technology, the construction of a charging network for electric vehicles, and the introduction of hybrid vehicles are also contributing to the expansion of the low-emission vehicle offerings in the automotive industry. Major players in the market, such as Tesla, Toyota, and Volkswagen, are investing in research and development to enhance their low-emission vehicle portfolio. Strategic initiatives, such as the partnership with technology companies to develop batteries and the collaboration with governments to improve charging stations, will further accelerate the market growth. The low-emission vehicle market will continue to play an important role in shaping the future of transport.

home-ubuntu-www-mrf_ne_design-batch1_child_pages-automotive-low-emission-vehicle-market size
Regional Market Size

Regional Deep Dive

Across the globe, the Automotive Low Emission Vehicles Market is experiencing substantial growth, owing to the increasing awareness about the environment, stringent government regulations, and technological advancements. In North America, the market is characterized by the strong demand for electric vehicles (EVs) and hybrid models, which are backed by the huge investments from automakers and government initiatives. In Europe, the regulatory frameworks are in favor of low-emission vehicles, while in Asia-Pacific, the manufacturing and consumer acceptance of EVs is rapidly increasing. The Middle East and Africa are also gradually embracing low-emission vehicles, but at a slower pace owing to the economic factors. On the other hand, the interest in sustainable mobility solutions is rising in Latin America, which is influenced by the growing urbanization and the stringent regulations on environment.

North America

  • The Biden administration has set a goal of 50 percent of new car sales to be electric by 2030, which is expected to stimulate the market for low-emission cars.
  • The electric car is gaining momentum, especially in the United States. Ford and GM are investing billions in electric cars, and the $11 billion Ford has invested in its EV factory in Michigan is a very recent example.
  • The severe restrictions on the use of fossil fuels and the financial incentives to buy electric cars have made other states adopt similar policies, and this has made the environment more favourable for electric cars.

Europe

  • The European Union has enacted the Green Package, which aims at making Europe the first continent to be free from greenhouse gases by 2050, and which will result in considerable investments in low-emission vehicles.
  • In Norway, the electric car will account for more than half of new car sales by 2021, supported by the extensive charging network and government incentives.
  • The European Commission’s proposal to ban the sale of new petrol and diesel cars from 2035 is expected to accelerate the transition to low-emission vehicles in the member states.

Asia-Pacific

  • The electric car market is the largest in the world. The Chinese government has been subsidizing the electric car market and subsidizing the purchase price of electric cars. At the same time, the government has been building a charging station network.
  • The electric vehicle industry has seen rapid development in recent years. BYD and NIO are among the leading companies in the industry. By 2022, BYD is expected to become the world's largest electric vehicle manufacturer.
  • India is emerging as a major player in this field with its Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which promotes the use of electric and hybrid vehicles.

MEA

  • The United Arab Emirates is investing heavily in electric vehicles. The Dubai Electric Vehicle Strategy, for example, aims to have 10 per cent of all vehicles on the road to be electric by the year 2030.
  • The Saudi Vision 2030 program aims to develop a local electric vehicle industry, which would have a great impact on the low-emission vehicle market in the region.
  • However, the market is still challenged by its reliance on oil and gas, which will slow down the shift to low-emission vehicles compared to other regions.

Latin America

  • Brazil leads the region in the use of electric cars, with the help of government subsidies and a growing network of charging stations.
  • In Chile, for example, the government has set a target for the year 2040 that 40 per cent of all public transport will be electric. This is expected to increase demand for low-emission vehicles.
  • In the case of many countries in Latin America, however, the economic difficulties and the poor condition of the roads are obstacles to the introduction of low-emission vehicles.

Did You Know?

“The total number of electric cars in the world is expected to reach 10 million in 2022, an increase of almost three times over the 2.5% of last year, indicating the rapid shift to low-emission vehicles.” — International Energy Agency (IEA)

Segmental Market Size

In the transition to sustainable mobility, the market for low-emission vehicles is a crucial one. It is currently experiencing robust growth, which is mainly driven by increasing consumer demand for eco-friendly products and stringent regulations aimed at reducing carbon emissions. The rise in awareness of climate change, government incentives for the adoption of electric vehicles and advances in battery technology have also accelerated the market for electric vehicles. Among the regions in which regulatory frameworks are most supportive of the development of low-emission vehicles are Europe and California, with their respective ZEV plans.

The current market situation is one of scale deployment. The major automobile manufacturers, such as Tesla, Ford, and Volkswagen, are investing heavily in electric and hybrid vehicles. Among the main applications are personal transportation, public transport, and commercial fleets. Examples of the latter are electric buses in Los Angeles and Amsterdam. The growth is being driven by trends such as the drive toward sustainability and government regulations requiring zero-emission vehicles. Technological developments such as improved battery management and the expansion of charging stations are shaping the market’s evolution. All of these factors place the LEV market at the center of the future automobile industry.

Future Outlook

The world market for low-emission vehicles is expected to grow at a CAGR of 6.31% from 2023 to 2032. The growth is based on a combination of technological development, government regulations, and changing consumer preferences for sustainable mobility solutions. The share of low-emission vehicles in the total number of vehicles sold will be about 30% in 2032, which is mainly driven by the government's increased support and the tightening of emissions regulations in the major markets of Europe, North America, and Asia-Pacific.

There is no doubt that the performance and the price of low-emission vehicles will continue to improve. The development of automation and the Internet of Things will further increase the appeal of these vehicles, because consumers are more and more looking for a convenient and safe way to travel. The goal of carbon-neutral economies and the implementation of the goals of the Paris Agreement will lead to a large number of investments in low-emission vehicle technology and will thus create a competition in which sustainability is paramount. In this way, new players and new alliances will emerge, especially in the EV sector, which will further accelerate the dynamics and speed of the market.

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