Euro 7 Regulations Compliant Market

[173 Pages Report] The global Euro 7 regulations compliant market size was valued at 13.6 million units in 2026 and is expected to reach 14.1 million units by 2035, at a CAGR of 0.4%, during the forecast period 2026-2035. The market is driven by demand for zero-emission vehicles, reduction of brakes and tires emission in ICE and electric/hybrid vehicles, reduction in tailpipe emissions, and others.

The rise in the overall vehicle cost is mainly because of the increasing incorporation of technologies to comply with the Euro 7 regulations, which will restrain the growth Euro 7 regulations compliant market.

Euro 7 Regulations Compliant Market  Market Dynamics

DRIVER: Zero emission targets by 2050

The Euro 7 regulations includes various real driving emissions (RDE), including the emissions from the brakes and tires of ICE and EVs. In-depth emission monitoring from different vehicular systems is required to achieve the agenda. Furthermore, the EU aims to be climate-neutral by 2050, with zero greenhouse gas emissions. Transitioning to this climate-neutral environment is not easy or quick; the Euro 7 norms can also be considered a step toward achieving the climate-neutral vision.

The Euro 7 targets to lower the emission of particles from the tailpipe by 13% from cars and vans and 39% from buses and lorries by 2035. Furthermore, the particles from cars' brakes will be lessened by 27%. To achieve such targets, many OEMs are developing advanced emission reduction technologies and powertrains to comply with the Euro 7. For instance, to meet the updated BS6 norms in India, TATA Motors (India) has upgraded its entire range of engines to be RDE compliant. Similarly, many European OEMs are equipping their powertrains to be Euro 7 compliant. These regulations have also compelled automotive OEMs to increase the use of lightweight materials such as light metals, composites, and plastics, which helps increase efficiency and reduce emissions.

Following several limitations on the usage of diesel vehicles in the Netherlands and Belgium, many countries have imposed restrictions on vehicles for their environmental protection. Germany is the only country worldwide that has banned diesel vehicles that are emission standard 4/IV or lower in its Stuttgart city. Many other cities in Germany are expected to implement diesel vehicle bans soon.

With increasingly stringent emission norms and restrictions, automotive OEMs focus more on electric and hybrid vehicles. For instance, Mercedes Benz (Germany) has many upcoming electric vehicles ranges in its EQ models, including the newer versions of its EQS, and EQE offerings. The other leading European carmakers, including Volvo (Sweden), Volkswagen (Germany), and others, are also developing electric vehicles.

RESTRAINT: Unfeasible period of implementation

The rise in the overall vehicle cost is mainly because of the increasing incorporation of technologies to comply with the Euro 7 regulations. This includes onboard monitoring, emission reduction technologies such as fuel particulate filters, selective catalytic reduction, and many associated sensors in these systems. Though these technologies aid in reducing emissions, they increase the vehicle's overall weight, adding load on the powertrain and enhancing emissions. However, the costs for these technologies can be relatively lower than the cost of developing an entirely new IC powertrain.

For these reasons, many leading automakers have concentrated more on the electric powertrain than the ICEs. For instance, according to the Europe head of Ford, the Model E division, investing in developing zero-emission technologies is better than concentrating on conventional internal combustion engines. In 2021, General Motors (US) announced that the company would discontinue all their ICEs vehicles by 2035 and only offer vehicles with zero tailgate emission in their product portfolio.

OPPORTUNITY: Increased periodic maintenance of vehicles

The Euro 7 regulation mandates emission from tires, brakes, onboard emission monitoring systems, etc. For these reasons, the automakers plan to incorporate an onboard monitoring (OBM) system that can monitor the real-time emissions of the vehicle. This will, in turn, drive the growth of the OBM system market. For instance, many leading companies, including Continental AG (Germany), Borgwarner Inc (US), Siemens (Germany), and others, are developing various onboard diagnostic tools and sensors for emission monitoring and reduction.

According to MarketsandMarkets analysis, the global automotive tire market is projected to grow to USD 113.1 billion by 2025. The Euro 7 mandates the real driving emissions produced from these tires, including the tire and road wear particles (TRWP) created due to the friction between the tires and the road. To minimize these emissions from the tires, many leading tire makers are developing their products with various advanced materials that reduce overall tire emissions. For instance, since 2015, Michelin (France) has lowered around 5% of particle emissions from their tires. Furthermore, Michelin and its partners aim to achieve their objective of 100% sustainable materials by 2050.

Another mandated form of emission in the Euro 7 regulation is the braking system emission of vehicles. When the brake is applied, the frictional force produces heat, emitting small airborne particulate matter from the brake disc and pads. These particles are considered a form of emission, and many leading braking system manufacturers are developing less-emitting products. For instance, in 2020, Brembo (Italy) developed its Greentive brake disc with high-velocity-oxy-fuel (HVOF) technology to reduce the environmental impact by reducing CO2 emission. Similarly, the Euro 7 regulation is expected to drive the growth of emission reduction technologies, sensors, and other associated systems.

CHALLENGE: Additional parameters under Euro 7 regulations

The increasing number of emission reduction technologies, emission-free tires, braking systems, and other associated technologies for the Euro 7 regulations increase the overall vehicle cost and the periodic maintenance and operational costs. For instance, brake dust filters are expected to significantly reduce pollution caused by fine brake dust particles. These brake dust filters are installed primarily on trucks as trucks have bigger brake drums/discs and emit more particles during vehicle braking than other vehicle types. The filters need cleaning and replacing over the recommended intervals. Such operational costs have a more significant impact on the commercial vehicle segment. This is mainly because the initial and operational costs are crucial in transporting goods and commodities. Furthermore, commercial vehicles run relatively run more than passenger vehicles.

For these reasons, some commercial operators must change their fleets to electric vehicles. For instance, Girteka (Lithuania), one of the largest logistic companies in Europe, collaborated with Scania (Sweden) to deliver 600 battery electric vehicles within four years for sustainable transportation. However, this transition involves enormous investment and the need to be equipped with various other challenges, including rerouting according to the charging infrastructure, revision of their service charges, etc. For instance, according to the MarketsandMarkets Analysis, the global e-Commerce platform will grow at a CAGR of 12.8% from 2022 to 2027. A significant share of this e-commerce logistics is by road, which demands commercial vehicle usage. Therefore, companies with larger fleets of ICE vehicles will be affected because of the emission norms. Some small-scale commercial vehicle operators who cannot afford such investment will opt for pre-owned/refurbished ICE commercial vehicles. However, this will hamper the net-zero emission goals.

LCVs segment is projected to grow at the highest growth rate during the forecast period

The LCV production in Europe is expected to grow from 1,786.5 thousand units in 2026 to 1,881.5 million units by 2035 at a CAGR of 0.6% during the forecast period. According to European Commission, NOx emissions will be reduced by 35-56%; tailpipe particles will be reduced by 13% in passenger cars and vans and by 39% in the buses and trucks segment. In brakes and tires, the particles will be reduced by 27% in the LCV segment. The penetration of diesel in Europe is around 80-85% for the year 2022, and gasoline engines are expected to increase in the LCV segment. Hence, technologies such as SCR combined with EGR are used in the LCV segment to cater to NOx emissions. Thus, the OEMs and Tier-1 companies focus on developing powertrain and after-treatment technologies in LCVs.

Spain is the second largest market in the Euro 7 regulations complaint market

The Euro 7 regulations compliant market is expected to grow from 1.6 million units in 2026 to 1.8 million by 2035 at a CAGR of 0.8% from 2026 to 2035. Spain is the second largest SUV manufacturer in Europe after Germany. It has higher production of mid-size and full-size SUVs. With the growing demand for SUVs, the market for after-treatment devices used in SUVs is also increasing. Gasoline-based SUVs are the most demanding variants preferred by Spanish customers, with Peugeot 2008, Renault Captur, Volkswagen T-Cross, SEAT Arona, Citroen C3 Aircross, Ford Kuga, and Opel Crossland X top-selling SUV models. With the growing demand for gasoline-powered SUVs, the demand for lean NOx traps in SUVs is increasing.

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Scope of the Report

The study categorizes the Euro 7 based on vehicle type, technology and sensors at regional and global levels.

By Vehicle Type

• Passenger Vehicles
• LCVs
• Trucks
• Buses

Technology

• Diesel Oxidation Catalysts (DOCs)
• Diesel Particulate Filters (DPFs)
• Gasoline Particulate Filters (GPFs)
• Selective Catalytic Reduction (SCR)
• Ammonia Slip Catalysts
• Electrically Heated Catalyst
• Exhaust Gas Recirculation (EGR)
• Lean NOx Traps

Sensors

• Exhaust gas pressure sensors
• Exhaust gas temperature sensors
• Particulate matter sensors
• Oxygen/lambda sensors
• NOx sensors
• Engine coolant temperature sensors
• MAP/MAF sensors

Key Market Players

The key players in the Euro 7 regulations compliant market are Eberspächer (Germany), FORVIA (Germany), Tenneco (US), and Johnson Matthey (UK). The key strategies adopted by major companies to sustain their position in the market are expansions, contracts and agreements, and partnerships.

Recent Developments

• In September 2022, Forvia showcased its heated doser in the IAA Transport exhibition held in Germany. The company claimed it could reduce NOx emission by 90% at low-temperature engines obeying all the norms of Euro 7 and EPA2027. It would be available for aftermarket architectures.
• In October 2022, Eberspächer and AAPICO (Thailand) signed a joint venture agreement named "JV company Purem AAPICO Co., Ltd." to manufacture exhaust system control systems and components used in commercial and passenger car segments sold in Thailand and ASEAN markets. Eberspächer will have 51% of the holding in the joint venture.
• In January 2022, Forvia (formerly Faurecia) acquired Hella (Germany) to expand its lighting and sensor product portfolio. Both companies will sell their products in their respective brands but will communicate under the new brand, Forvia.
• In April 2022, Johnson Matthey invested USD 54.24 million to build a new plant in Poland to manufacture small batches of spare parts of catalyst products for the automotive sector, which will help reduce the harmful emission more efficiently. This project will take 18 months to complete.

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