Automotive Green Tires Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Vehicle Type (Passenger Car, Light Commercial Vehicle, Medium & Heavy Commercial Vehicle, Two -Wheelers, Three Wheelers and OTR), By Demand Category (OEM and Replacement), By Tire Construction Type (Radial and Bias), and By Region. 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 13.12 Billion
CAGR (2026-2031)	6.13%
Fastest Growing Segment	Passenger Car
Largest Market	North America
Market Size (2031)	USD 18.75 Billion

Market Overview

The Global Automotive Green Tires Market will grow from USD 13.12 Billion in 2025 to USD 18.75 Billion by 2031 at a 6.13% CAGR. Automotive green tires are specialized pneumatic components engineered with low rolling resistance compounds, such as silica-silane, and sustainable materials to minimize energy loss and carbon emissions. The global market is primarily propelled by stringent government mandates regarding fuel economy standards and the accelerating shift toward electric vehicles, which necessitate energy-efficient tires to maximize driving range. These regulatory and functional imperatives serve as the fundamental drivers supporting industry growth, distinct from transient product trends.

According to the U.S. Tire Manufacturers Association (USTMA), in 2025, total tire shipments in the U.S. are projected to reach a record 340.2 million units, reflecting the resilient demand environment that underpins the adoption of advanced efficiency-focused tire technologies. However, a significant challenge impeding broader market expansion is the high production cost associated with processing eco-friendly materials and complex rubber compounds, which can elevate the final price point for cost-sensitive consumers and limit penetration in developing regions.

Key Market Drivers

Rapid Expansion of the Electric Vehicle Market acts as a primary catalyst propelling the Global Automotive Green Tires Market, fundamentally altering tire engineering requirements. Electric vehicles (EVs) are characterized by instant torque delivery and heavy battery packs, which significantly accelerate tire wear and necessitate lower rolling resistance to alleviate range anxiety. Consequently, tire manufacturers are aggressively pivoting their product portfolios toward high-load, large-diameter specifications that integrate advanced silica compounds to optimize energy efficiency without compromising grip. This structural shift is quantified by the surging sales of specialized high-performance tires. According to Michelin, February 2025, in the '2024 Annual Results', the company reported that the sales mix of 18-inch and larger tires, which are increasingly essential for meeting the load and efficiency demands of modern electric vehicles, reached 65% of its passenger car tire sales.

Increasing Adoption of Sustainable and Renewable Raw Materials is the second major factor reshaping the industry, driven by both regulatory decarbonization targets and OEM corporate social responsibility mandates. Manufacturers are progressively replacing fossil-based components, such as conventional carbon black, with bio-based alternatives like rice husk silica, natural rubber, and recycled polyester to achieve circular economy goals and reduce Scope 3 emissions. This commitment to environmental stewardship is becoming a critical competitive metric. According to Continental AG, May 2025, in a corporate sustainability update, the company highlighted its achievement of a platinum sustainability rating with a score of 84 out of 100 points, placing it in the top percentile of the industry for its material sourcing and environmental management strategies. Despite economic volatility, the sector maintains strong financial traction due to these high-value innovations; according to Pirelli, in 2025, the manufacturer reported full-year 2024 revenues of €6.77 billion, underscoring the market's resilient value generation.

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Key Market Challenges

The primary obstacle impeding the expansion of the Global Automotive Green Tires Market is the high production cost associated with sourcing and processing sustainable materials. Manufacturing these energy-efficient components requires specialized inputs, such as high-grade silica and advanced rubber compounds, which are significantly more expensive to refine than traditional ingredients. This elevated cost structure necessitates a higher final retail price, which directly alienates cost-sensitive consumer segments. Consequently, the adoption of green tires is severely restricted in developing economies where upfront affordability often outweighs the potential for long-term fuel savings.

Supply chain imbalances further exacerbate these financial pressures by driving up input expenses. According to the Association of Natural Rubber Producing Countries (ANRPC), in 2025, global natural rubber production was projected to grow by a marginal 0.5 percent, whereas demand was expected to increase by 1.3 percent. This specific supply-demand deficit creates volatile pricing for essential raw materials, forcing manufacturers to maintain high price points. This economic dynamic effectively limits the market reach of green tire technologies to premium vehicle segments and heavily regulated regions.

Key Market Trends

The Integration of IoT and Smart Sensors for Real-Time Monitoring is transforming tires from passive components into active data-generating nodes essential for modern fleet management and autonomous mobility. Manufacturers are embedding sensors directly into the tire structure to capture granular data on pressure, temperature, wear, and road surface conditions, enabling predictive maintenance that significantly extends casing life and operational efficiency. This technological convergence allows for the creation of high-margin service ecosystems where software-driven insights generate recurring revenue streams beyond the initial hardware sale. According to Sumitomo Rubber Industries, February 2025, in the 'Financial Results Briefing for the Fiscal Year Ended December 31, 2024', the company announced that its proprietary tire sensing technology, Sensing Core, is targeted to generate a business profit of JPY 10 billion or more by 2030, underscoring the substantial commercial value anticipated from these digital capabilities.

The Implementation of Circular Economy and Closed-Loop Recycling Models is advancing the industry beyond simple material substitution toward the development of sophisticated chemical recycling infrastructure. This trend focuses on establishing dedicated facilities capable of depolymerizing end-of-life tires through precise pyrolysis to recover high-quality carbon black and oil, which can then be reintroduced into the manufacturing supply chain. This approach addresses the critical challenge of waste management by closing the loop on material flows, thereby decoupling production growth from raw resource extraction. According to Bridgestone, October 2025, in a press release regarding the groundbreaking of its new facility in Japan, the company confirmed that its pilot demonstration plant for precise pyrolysis is designed to process approximately 7,500 tonnes of end-of-life tires annually by 2027, demonstrating a tangible commitment to scaling horizontal recycling technologies.

Segmental Insights

The Passenger Car segment constitutes the fastest-growing component of the Global Automotive Green Tires Market, largely due to the implementation of rigorous fuel economy and emission standards by international authorities. Regulatory bodies such as the European Commission and the United States Environmental Protection Agency have introduced guidelines that incentivize the adoption of tires with lower rolling resistance to decrease fuel consumption. This regulatory pressure, combined with rising consumer demand for cost-effective and environmentally responsible personal transport, compels automakers to integrate green tires into new passenger vehicle models to ensure market compliance and operational efficiency.

Regional Insights

North America holds a dominant position in the Global Automotive Green Tires Market, largely due to strict environmental mandates and fuel economy standards. The National Highway Traffic Safety Administration enforces Corporate Average Fuel Economy regulations, which require manufacturers to utilize low rolling resistance tires to improve vehicle efficiency. Additionally, the Environmental Protection Agency actively promotes initiatives that reduce carbon emissions, further stimulating market demand. This strong regulatory environment, coupled with increasing consumer preference for sustainable mobility and electric vehicles, solidifies North America’s status as the leading region in this sector.

Recent Developments

• In December 2024, Bridgestone announced a strategic research collaboration with the Pacific Northwest National Laboratory to accelerate the production of sustainable tire materials. The partnership focused on scaling up an innovative catalytic process that converts ethanol into butadiene, a primary ingredient for synthetic rubber. By utilizing this technology, the company aimed to reduce its dependence on fossil fuel-derived raw materials and lower carbon emissions in its manufacturing process. The collaboration included plans to design and construct a pilot plant to demonstrate the commercial viability of this bio-based solution, supporting the firm's goal of using 100% sustainable materials by 2050.
• In November 2024, The Goodyear Tire & Rubber Company unveiled the ElectricDrive Sustainable-Material (EDS) Tire, which contains over 70% sustainable material content. Launched at a sustainability leadership forum, this product was engineered specifically for electric vehicles to offer superior wet braking, reduced noise, and lower rolling resistance. The tire incorporates recycled and bio-based ingredients, including carbon black sourced from end-of-life tires and recycled polyester. The company highlighted this release as a pivotal milestone in its strategic roadmap to develop a tire made 100% from sustainable materials by 2030, catering to the growing demand for eco-friendly mobility solutions.
• In November 2024, Continental announced that it had expanded the use of recycled materials in its tire manufacturing operations. The company successfully converted additional production plants to utilize polyester fabric obtained from recycled polyethylene terephthalate (PET) bottles. This operational shift allowed the manufacturer to increase the recycled content in many of its tire lines by an average of three percent, using up to 15 bottles per tire. The firm stated that this initiative was a key component of its long-term strategy to strictly use high-performance polyester fibers made from sustainable sources in all new car and light truck tires.
• In February 2024, Pirelli marked a significant achievement in the automotive green tires market by introducing a complete range of Forest Stewardship Council (FSC) certified tires for the Formula One World Championship. All tires supplied for the season were embossed with the FSC logo, certifying that the natural rubber within them met rigorous environmental and social sustainability criteria. This development followed an extensive testing program that ensured the sustainable materials delivered the necessary performance and reliability for high-speed racing. The initiative underscored the manufacturer's commitment to reducing the ecological footprint of its motorsport activities through supply chain transparency.

Key Market Players

• Michelin Group
• Bridgestone Corporation
• The Goodyear Tire & Rubber Company
• Continental Aktiengesellschaft
• Pirelli & C. S.p.A.
• Sumitomo Rubber Industries, Ltd.
• Hankook Tire & Technology Co., Ltd.
• Yokohama Rubber Co., Ltd.
• Toyo Tire Corporation
• Kumho Tire Co., Inc.

By Vehicle Type	By Demand Category	By Tire Construction Type	By Region
Passenger Car Light Commercial Vehicle Medium & Heavy Commercial Vehicle Two -Wheelers Three Wheelers and OTR	OEM and Replacement	Radial and Bias	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Automotive Green Tires Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Automotive Green Tires Market, By Vehicle Type:

• Passenger Car
• Light Commercial Vehicle
• Medium & Heavy Commercial Vehicle
• Two -Wheelers
• Three Wheelers and OTR

• Automotive Green Tires Market, By Demand Category:

• OEM and Replacement

• Automotive Green Tires Market, By Tire Construction Type:

• Radial and Bias

• Automotive Green Tires Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE