May 25, 2024

Electric Aircraft Market Primed for Growth by Reduced Operational Costs

Market Overview: The electric aircraft market is gaining significant traction globally due to various advantages offered by electric aircraft over conventional fuel-driven aircraft. Electric aircraft are more economical to operate as they have lower maintenance costs and do not require fuel, thereby significantly reducing operational expenses. Additionally, electric aircraft are more environment-friendly as they produce near-zero emissions and lower noise levels. Major manufacturers like Boeing and Airbus are making huge investments in developing fully electric and hybrid-electric aircraft to cater to the growing demand from both general aviation and commercial airline segments. The global electric aircraft market is estimated to be valued at US$ 9,661.6 Mn in 2024 and is expected to exhibit a CAGR of 14% over the forecast period from 2024 to 2031.

Key Takeaways
Key players operating in the electric aircraft market are Boeing, Airbus, Raytheon Technologies Corporation, Honeywell International Inc., Thales Group, Lockheed Martin Corporation, Zunum Aero, YUNEEC, Elektra Solar GmbH, PIPISTREL, BYE AEROSPACE, DELOREAN AEROSPACE, LLC, Joby Aviation, Siemens, Safran, Bombardier, TTTech Computertechnik AG, and AgustaWestland.

The growing demand for sustainable aviation is expected to drive the electric aircraft market during the forecast period. Stringent environmental regulations and rising environmental concerns are compelling aircraft manufacturers to develop new-generation electric aircraft with near-zero emissions. Additionally, lower operating costs of electric aircraft and higher fuel efficiency would attract more airline operators and private aircraft owners.

North America dominated the global electric aircraft market in 2024 and the region is expected to continue its dominance during the forecast period owing to strong government support for developing advanced electric aircraft technologies. However, Asia Pacific is expected to witness the highest growth during the forecast period due to the rapidly growing air passenger traffic and increasing investments by regional governments in the aviation industry. Manufacturers are also shifting their focus towards Asia Pacific to leverage lower production costs and tap the potential of emerging economies in the region.

Market Key Trends
Electric Vertical Take-Off and Landing (eVTOL) aircraft is one of the major trends in the electric aircraft market. Several startups and aircraft manufacturers are developing electric vertical take-off aircraft for Air taxi and ride-sharing services in urban areas. For instance, Joby Aviation and Lilium are working on developing electric five-seater air taxis to provide regional air mobility services. These new generation eVTOL aircraft can take-off and land vertically like a helicopter and transition to wing-borne lift in forward flight. Furthermore, hybrid-electric aircraft are gaining traction as they leverage the benefits of both electric propulsion and conventional jet engines to improve fuel efficiency and range. Major commercial aircraft manufacturers have set goals and timelines to introduce hybrid-electric aircraft models by the end of this decade.

Porter’s Analysis
Threat of new entrants: Electric aircraft market require huge capital investment in R&D and manufacturing. Strict regulations regarding safety and certification make it difficult for new players to enter the market.

Bargaining power of buyers: Buyers have moderate bargaining power as there are limited player in the electric aircraft market currently. However growing demand for electric aircraft is increasing bargaining power of buyers.

Bargaining power of suppliers: Suppliers of critical components like batteries and electric motors have moderate to high bargaining power due to their specialized technological expertise and limited availability.

Threat of new substitutes: Hydrogen powered aircraft can be potential substitute but still in development stage. Limited range of current electric aircraft also restricts their usage as substitutes.

Competitive rivalry: Competition is intense among major established players. Companies are focusing on innovative technologies and collaboration to gain competitive advantage in the growing electric aircraft market.

Geographical Regions
The electric aircraft market in terms of value is highly concentrated in North America currently. Majority of research, development, production and deployment activities are centered in the US. Supportive government policies and presence of prominent players like Boeing, Airbus and Honeywell in the region has made North America the leader in electric aircraft market.

Asia Pacific region is expected to witness the fastest growth in the electric aircraft market during the forecast period from 2024 to 2031. Countries like China and Japan are actively supporting development of electric aviation through funding, infrastructure development and regulations. Growing demand for new mobility solutions and personal air vehicles and increasing focus on sustainability are anticipated to fuel market growth in the Asia Pacific region.

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  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it