The global vehicle emission sensor market is projected to grow at a CAGR of 2.01% during the forecast period to reach US$4.496 billion by 2027, from US$3.911 billion in 2020. Located in the exhaust pipe of vehicles, a Vehicle emission sensor is a highly sensitive device that is used to detect and measure the concentration of exhaust gas emitted by the internal combustion engine of vehicles. These sensors are used for control as well as diagnostic purposes as modern-day engines are required to control a wide range of parameters for the smooth functioning of automobiles such as fuel injection amount, air flow, EGR, engine temperature, exhaust oxygen content, and many more. On a wider basis, oxygen sensors and nitric oxide sensors are used to detect the emission gases from modern-day vehicles.
The augmenting automobile demand due to rising disposable income and the growing air pollution concerns has accelerated the vehicle emission sensor demand during the forecast period.
As the market for automobiles in the world is growing the environmental concerns attached to the rising number of automobiles are increasing simultaneously. Owing to higher disposable income and the necessity to travel from one place to another have boosted the demand for automobiles in the past few years. As per the ACEA (European Automobile Manufacturers Association), a total of 79.1 million motor vehicles was produced in 2021 in the world, the statistics say that the number has increased by 1.3% from the previous year. Additionally, rising innovations and technological advancements are attracting new customers to the automobile market.
Furthermore, in the past few years, the demand for electronic vehicles has surged as they are environmentally safe alternatives to their traditional counterparts. EVs significantly help the environment by the reduction in greenhouse gas emissions. Also, EVs are safer alternatives in the automobile industry. For instance, rising innovation in the EV sector is driving the demand for EVs across the world. In December 2021, Model Y of Tesla was awarded IIHS Top Safety Pick+. The Model Y cars are built for North American markets to provide high-end safety to the drivers, passengers, and pedestrians. Furthermore, EVs can offer rapid charging capability, high-resolution intelligent displays, part assistance cameras, environment-friendly components and many more are boosting the demand for automobiles.
The global air pollution concerns are also rising which is creating alarming demand to keep an eye on vehicle emissions. According to the World Health Organization, the greatest health risk is air pollution. Additionally, the Ambient (outdoor) air pollution report published by WHO in September 2021 states that air pollution is the root cause of stroke, lung diseases, and both chronic and acute respiratory diseases, including asthma. The outdoor air pollution is mainly caused due to industries, transport, and urban planning among others. And with the rising number of transport vehicles, motor vehicles, etc. the risk of air pollution is rising every year. Hence, the need to regulate the emissions by vehicles is surging.
The rising government initiatives to control the air quality are boosting the demand for vehicle sensors.
The increasing efforts by numerous independent organizations to reduce air pollution and vehicle emission have opened the eyes of governments across the world. Organizations like ICCT (The International Council on Clean Transportation) are taking a step forward to provide technical and scientific analysis to environmental regulators. The EPA (Environment Protection Agency) has reported in its June 2022 report that a typical passenger vehicle emits about 4.6 metric tons of CO2 per year. Such rising environmental concerns across the globe have encouraged government initiatives to monitor the emissions from vehicles. For instance, in India, the Bharat Stage (BS) Norms set by the Central Pollution Control Board of India mandate all vehicle manufacturers to sell only those vehicles which comply with BS norms. The BS-VI- which is applicable from 2020 allows only 10ppm of sulfur. So, these vehicle sensors help to keep track of the emissions from the vehicles and ultimately contribute to compliance with legal emission limits.
Additionally, these vehicle emission sensors are also mandatory in many cases. For instance, under the ODB-II regulation, the O2 sensors are mandatory on all cars manufactured since 1981. The regulation also states that all cars made in 1996 and after are required to have a second oxygen sensor that is located below the catalytic converter. The O2 sensors are used to monitor how much-unburned oxygen is present in the exhaust.
The market is anticipated to prosper as a result of rising market competition
The rising demand for these vehicle emission sensors is also boosting the market competition as companies like IMR Environmental Equipment, Inc. Cubic Sensor and instruments, and SenSic AB have launched their vast range of NOx sensors in the market. For example, IMR offers Model 1440FL portable- Exhaust Gas Analyzer which is designed to measure exhaust gases on Forklift Trucks, Generators, cars, and machinery which are powered by gas or diesel engine. On the other hand, Cubic offers Model NOx Sensor- 5WK96616F which can be used to detect the content of nitrogen oxides in engine exhaust. These NOx sensors by Cubic are used for catalyst management in vehicles that have gasoline or diesel engine. These market players are benefiting through the higher sale of automobiles and thus, the market competition offering vehicle emission sensors in the market is also rapidly increasing.
The increasing growth of the automotive industry in the Asia Pacific region is supporting the global vehicle emission sensor market growth
With the growing economies like India and China, the Asia-Pacific region is expected to boost the demand for automotive causing an increase in the demand for vehicle emission sensor market. In 2021, the Asia-pacific region produced a total of 4,67,32,785 units as per the OICA statistics report. China is a dominant position in the Asia-pacific automotive market.
The pandemic harmed the global vehicle emission sensor market, owing to the significant impact of COVID-19 on the automotive industry. During the pandemic, consumer behavior focused more on necessities than luxury goods, hence the overall automotive sector felt the impact of the COVID-19 pandemic in terms of sales. For instance, the Ford-2020 annual report indicated an overall decrease in the sale of vehicles to the dealerships in 2020. The total vehicles sold to the dealership was 5,386 thousand units in 2019 which fell to 4,187 thousand units in 2020. Major factors like disposable income, epidemic severity, and travel restrictions led to declining demand for automobiles which in turn lowered the demand for vehicle sensor market from the end-user industry.