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October 30, 2024WHITE PAPER DOWNLOAD: 'Turning the corner: How EVs and sustainability will reshape the tire industry'
Tires are the unsung heroes of global mobility, facilitating the seamless transport of people, goods, and services across every corner of the world. With over 2 billion tires manufactured each year, the industry's growth has been deeply tied to the fortunes of the automotive sector. However, tire retailers have long been squeezed by razor-thin profit margins of between 2% and 10%, and while the industry's expansion has outpaced population growth, it has consistently lagged behind GDP growth - until now.
'Turning the Corner: How EVs and Sustainability Will Reshape the Tire Industry'
Key Takeaways:
- EV Market Transformation: Electric vehicles (EVs) are reshaping the tire industry by increasing demand for EV-specific tires that are up to 50% more expensive and wear 20% faster than traditional internal combustion engine (ICE) tires. The higher weight and instant torque of EVs require manufacturers to develop more durable and specialized tires, driving a shift toward premium products and performance optimization.
- Sustainability: Tire manufacturers are adopting sustainable practices, such as using bio-based and recycled materials (e.g., rice husk silica, reclaimed carbon black, and soybean oil). Industry leaders like Michelin, Goodyear, and Pirelli are pursuing ambitious sustainability goals, including 100% reliance on sustainable materials and renewable energy sources by 2050.
- Recycling and Retreading: The tire industry is leveraging recycling methods like retreading, which extends tire life and reduces oil consumption, and pyrolysis, which recovers valuable materials like carbon black. Retread tires account for 44% of commercial tires in North America, saving 217.5 million gallons of oil annually. However, achieving consistent quality in recycled materials and scaling advanced methods like pyrolysis remain critical challenges.
The Author...
Luke Downing - Analyst
About Us - NexantECA, the Energy and Chemicals Advisory company is the leading advisor to the energy, refining, and chemical industries. Our clientele ranges from major oil and chemical companies, governments, investors, and financial institutions to regulators, development agencies, and law firms. Using a combination of business and technical expertise, with deep and broad understanding of markets, technologies and economics, NexantECA provides solutions that our clients have relied upon for over 50 years.
