The fuel-efficient (green) tires market was valued at USD 41.3 billion in 2023-e, growing at a CAGR of 12.3% during the forecast period of 2024 – 2030. Technological innovations in green tires are anticipated to provide significant growth opportunities for the fuel-efficient (green) tires market. Technological innovations in fuel-efficient (green) tires involving new materials and robust designs are anticipated to provide significant growth opportunities for the market. The inclusion of sustainable materials such as carbon, soybean oil, rice husk waste, and recycled polyester and steel cords in fuel-efficient tires will boost the market growth.

Rising Demand for Fuel-Efficient Tires is Driving the Market

Fuel-efficient (green) tires are tires that offer low rolling resistance (LRR) allowing vehicles to roll more easily on the road, which creates better fuel efficiency. In recent years, there has been an increasing emphasis by the regulatory agencies and governments promoting the adoption of fuel-efficient tires as industry studies have shown that a 10% drop in rolling resistance equates to about a 1% improvement in fuel economy. Moreover, the increasing popularity of fuel-efficient (green) tires among consumers has also driven market growth.

Motor gasoline stands out as one of the most widely consumed fuels. According to the US Energy Information Administration, in 2022, the US consumed 134.55 billion gallons of finished motor gasoline. There’s an increasing need for fuel-efficient transportation. Governments all over the world are increasingly pushing industries to adopt sustainable alternatives including the tire industry as well. Moreover, high fuel prices in 2023 have also further driven the demand for fuel-efficient tires among consumers.

Segment Analysis

A Shift Towards Sustainable Mobility is Driving the Hybrid & EV Segment Growth

There has been a growing popularity of EVs owing to their low running costs, environmental friendliness, and impressive fuel efficiency. According to the International Energy Agency (IEA), over 26 million electric cars were on the road in 2022, accounting for a growth of about 60% compared to 2021. In 2022, the electric car sales accounted for a total of 14% of all the new cars sold compared to 9% in 2021 and 5% in 2020. This robust shift in the adoption of electric cars has resulted in a growth in demand for fuel-efficient tires.

Fuel-efficient tires offer a better range for electric vehicles. The need for maximized energy efficiency to extend battery range is driving the demand for low-rolling resistance tires. Drivers of EVs are also anticipated to stay with fuel-efficient tires when replacing them, regardless of price. An increasing number of players are launching fuel-efficient tires for EVs and hybrid vehicles. For instance, in March 2023, Falken launched a new range of eZIEX tires for electric vehicles in Europe. Thus, the hybrid & EV segment is anticipated to hold a significant market share.

Rising Sales of Passenger Vehicle Drives the Market Growth

According to the International Organization of Motor Vehicle Manufacturers (OICA), the global sales of passenger cars accounted for 57.5 million units in 2022 in comparison to 56.4 million units in 2021. This growth in passenger vehicle is anticipated to drive the demand for fuel-efficient tires. The passenger vehicle manufacturers are increasingly opting for fuel-efficient tires as a standard fitment owing to the rising initiatives by the government and rising consumer awareness.

In addition, the car manufacturers are actively partnering with tire manufacturers in long-term contracts for R&D and sales. For instance, in June 2022, Hyundai collaborated with Michelin for R&D for innovative tire technologies over the next three years. In February 2023, Apollo Tyres launched Vredestein Pinza all-terrain tires in India for SUVs. Thus, rising partnership among car manufacturers and tire manufacturers are driving the passenger vehicles segment growth.  

Rising Demand for Fuel-Efficient Summer Tires is Driving the Market

The summer tires offer better handling and traction in dry conditions. The summer tires provide better grip on the road than all-season or winter tires, providing better handling and stability when driving in warm weather. There’s a rising demand for fuel-efficient summer tires owing to the significant population driving in the hot regions. Moreover, key companies are actively launching products owing to the rise in demand. For instance, in November 2023, Firestone launched Roadhawk 2 ENLITEN designed for the summer season with EU label A grade.

16–18” are Highly Popular Choice for Automobiles

The 17” tire size is commonly used on several sedans, compact cars, and hatchbacks such as BMW 3-Series, Audi A4, Volkswagen Golf, Volkswagen GTI, Subaru WRX, and Mazda MX-5. These are also a popular choice for full-size trucks such as the Ford F-150, Chevrolet Silverado, and Ram 1500. The 16” tire size is a standard size for many compact cars such as the Honda Civic, Toyota Corolla, and Mazda3. These are also commonly used on mid-size sedans such as the Honda Accord, Toyota Camry, and Nissan Altima. With increasing passenger cars sales across the globe, the 16–18” segment is anticipated to have a significant growth over the forecast period.c

Rising Sales of EVs is Driving the OE Tires Segment’s Growth

Fuel-efficient tires are often factory-fitted to new EVs as a standard as they offer a better range. Rising sales of EVs are driving the demand for fuel-efficient OE tires. According to the International Energy Agency (IEA), electric car sales exceeded over 10 million units in 2022. In addition, an increasing number of players are partnering with automobile manufacturers to gain competitive advantage. For instance, in August 2021, Bridgestone came into a partnership with Einride, an autonomous commercial EV developer, to become its sole tire supplier for US fleets. Thus, the OE tires segment is expected to grow at a significant pace.

Regional Analysis

Increasing Government Initiatives for Environmental Sustainability Drives the Market in Europe

Europe was among the early adopters of the fuel-efficient tires and the European Union (EU) has taken the lead in environmental sustainability. In 2020, the European Green Deal was approved. It is a set of policy initiatives by the European Commission to make the EU climate-neutral by 2050. In May 2021, the EU also enforced new rules on the energy labelling of road tires which focuses primarily on the fuel efficiency, safety, and noise performance of new tires. Moreover, the key players are strongly focused on innovation to capture the market share. For instance, in July 2021, Vaculug, a UK-based tire retreader, launched “A” rated retreaded fuel-efficient tires. Thus, increasing government initiatives for environmental sustainability drive the market in Europe.

Fuel-Efficient (Green) Tires Market is Highly Competitive

Major tire manufacturing companies involved in manufacturing of green tires provide a wider portfolio of fuel-efficient tires. The companies actively pursue long-term contracts for the OE tires as well as strongly market their products for replacement. The companies are actively launching innovative tires to capture market share. The market is highly competitive with the presence of dominant global players. Notable companies include Apollo Tyres, Bridgestone, Continental, Goodyear, Hankook, Michelin, Nokian, Pirelli, Sumitomo, and Yokohama.   

Following are the key developments in the fuel-efficient (green) tires market:

• In March 2023, Michelin launched X Multi Energy Z, a fuel-efficient tire for truck and buses. The product is a tire developed for heavy-duty medium- and long-distance vehicles.
• In March 2022, Goodyear launched Fuel Max RSA ULT and Endurance RSA ULT tires for trucks.

Fuel-Efficient (Green) Tires Market Coverage

The report provides key insights into the fuel-efficient (green) tires market, and it focuses on technological developments, trends, and initiatives taken by the government in this sector. The report delves into market drivers, restraints, and opportunities, and analyzes key players as well as the competitive landscape within the market.

Report Scope