The surge in EV adoption is driving a tire market boom.
Historically, the tire industry has been characterized by intense competition, minimal expansion, and thin profit margins.
AlixPartners reports that the total market value has remained approximately $50 billion in recent years, with an annual growth rate of around 2%.
But electric vehicles are presenting a whole new set of opportunities.
According to AlixPartners, EVs with their heavy weight and quick acceleration tend to burn through tires 20% faster than internal combustion vehicles, and the tires cost about 50% more.
An EV's range can be impacted by tire selection, which can affect the noise level in the cabin.
The ability of tire companies to stand out as innovators in specific areas could influence how frequently customers request their products. According to Northcoast Research, only approximately half of buyers currently ask for their products by name.
According to John Healy, an analyst with Northcoast Research, if EVs evolve and proliferate through the car population as some believe, it could lead to a "gold rush" for tire manufacturers.
Watch the video to learn more.
Business News
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