The global Automotive Green Tires market size is projected to grow from USD 11.5 billion in 2023 to USD 15.8 billion by 2028, representing a CAGR of 6.5% over the forecast period.

This growth is primarily driven by increasing demand for low-rolling resistance tires, stricter vehicle emission and fuel efficiency regulations, and rising adoption of electric vehicles (EVs) which particularly benefit from green tire technologies.

Market overview: size & share insights

According to the latest report by MarketsandMarkets:

• Market size in 2023: USD 11.5 billion.
• Forecast for 2028: USD 15.8 billion.
• CAGR (2023–2028): 6.5%.
• Regionally: The Asia Pacific region is projected to hold a significant market share in the forecast period.

These numbers reflect a steady yet moderate growth trajectory — unlike some high-CAGR sectors — indicating opportunity but also maturity and segmentation nuance.

Key growth drivers

• Greenhouse gas & fuel efficiency regulations: Green tires reduce rolling resistance, thereby lowering fuel consumption and CO₂ emissions — critical given global targets such as the EU’s 55% reduction by 2030.
• EV adoption: Electric vehicles benefit substantially from low-rolling resistance tires to improve range and efficiency — positioning green tires as strategic component.
• Growing premium vehicle segments & rim sizes: Larger rim sizes (e.g., 19-21”) and high-performance vehicles are increasingly fitted with green tire options, expanding value beyond economy segments.
• Aftermarket and fleet replacements: Commercial fleets and manufacturers are realising operating cost savings from green tires (fuel savings, longer tread life) which drives adoption.

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Trends & market opportunities

• Rim size evolution: The 19-21” rim-size segment is expected to witness high growth in green tires due to premium cars and sports car segments.
• On-road application dominance: On-road use (passenger cars, LCVs, trucks) is expected to remain the largest application segment for green tires, given the scale of road-vehicle fleets.
• Vehicle propulsion type shift (ICE to EV): As more EVs enter the market, the need for green tires (to maximise efficiency) grows — this creates incremental value for tire manufacturers.
• Sustainable material innovation: Use of silica, recycled materials, bio-rubbers and sustainable manufacturing processes is a key trend shaping differentiation in the green tire market.

Regional outlook

• Asia Pacific: The region is expected to lead in value share, driven by large vehicle production base (China, India, South Korea), rising EV deployment, and strong tire manufacturing presence.
• Europe & North America: Established markets with stringent regulations on fuel economy and emissions push premium adoption of green tires.
• Emerging markets: While awareness is lower in some emerging economies, cost-sensitivity may slow adoption — a restraint noted in the report.

Challenges & restraints

• Consumer awareness gap: In some markets, awareness of the benefits of green tires (fuel savings, reduced emissions) remains low; this hampers aftermarket adoption.
• Incremental cost vs. value: Green tires often cost more than conventional tires; convincing fleet operators or consumers of the payback (fuel savings, emissions) is critical.
• Segment maturity & modest CAGR: With a CAGR of ~6.5%, growth is moderate — meaning differentiation, premiumisation or regional strategy are required rather than assuming explosive growth.
• Supply chain/materials constraints: The shift to sustainable materials places demands on manufacturing and cost management for tire makers.

Why this matters to stakeholders

• Tire manufacturers & OEMs: Green tires represent a value-pool opportunity linked with sustainability goals, EV adoption and vehicle efficiency mandates.
• Fleet operators & commercial vehicles: For heavy usage vehicles (LCVs/trucks), green tires can deliver meaningful per-mile cost savings and support decarbonisation strategies.
• Aftermarket & service providers: As green tires become standard, aftermarket positioning (replacement, performance upgrades) can capture value.
• Investors & strategy teams: Understanding regional adoption rates, rim size trends, vehicle type transitions (ICE → EV) is essential to evaluate business models in the green-tire domain.

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FAQ

Q: What is the current size of the green tires market?
A: The global automotive green tires market size is estimated at USD 11.5 billion in 2023.

Q: What is the forecast size by 2028?
A: Forecasted to be USD 15.8 billion by 2028.

Q: What is the expected CAGR (2023-28)?
A: Approximately 6.5%.

Q: Which region leads the green tires market?
A: The Asia Pacific region is expected to hold the largest share by 2028.