Luxury SUV market forecast to top $33bn by 2036 as electric models and bigger vehicles drive demand

A new industry forecast says the global luxury SUV market will more than triple in value over the next decade, as buyers move away from premium saloons and towards larger, more tech-heavy and increasingly electrified vehicles

The global luxury SUV market is projected to grow from US$9.7 billion in 2025 to US$33.09 billion by 2036, according to a new industry forecast that points to electrification, demand for full-size models and changing lifestyle preferences among affluent buyers.

The report from Future Market Insights says the market is expected to rise to US$10.84 billion in 2026 and then expand at a compound annual growth rate of 11.8 per cent over the following decade.

The forecast reflects a wider shift in the premium car market, where luxury SUVs are increasingly displacing traditional saloons as the dominant format. 

Higher driving positions, greater practicality and the integration of advanced technology are all cited as factors behind the change.

Full-size luxury SUVs are expected to account for 44 per cent of total market revenue in 2026, according to the report.

It says growth is being driven at both ends of the market – from buyers moving up into entry-premium larger SUVs from brands such as BMW and Mercedes-Benz, to ultra-luxury customers paying more than US$300,000 for models from makers such as Rolls-Royce and Bentley.

Electrification is also expected to play a central role in reshaping the segment. The report says premium manufacturers including Porsche, Audi and Mercedes-Benz are investing heavily in dedicated electric SUV platforms, while hybrids continue to act as a bridge technology for buyers not yet ready to move fully away from combustion engines.

Even so, gasoline-powered luxury SUVs are still expected to hold a 52 per cent market share in 2026, particularly in countries where charging infrastructure remains less developed.

Another growth area highlighted in the forecast is the rise of three-row luxury SUVs aimed at families and chauffeur-driven buyers. Rear-seat entertainment systems, longer wheelbases and more configurable interiors are cited as features helping to widen the appeal of the segment.

The most active pricing band is expected to be the US$60,000 to US$90,000 range, which the report says will account for 38 per cent of market revenue in 2026. 

That part of the market is seen as benefiting from demand among upper-middle-class households and corporate buyers seeking premium features without moving into ultra-luxury price territory.

Among national markets, China is forecast to be the fastest-growing, with a projected CAGR of 15.9 per cent, followed by India at 14.8 per cent and Germany at 13.6 per cent. The UK and US markets are projected to grow at 11.2 per cent and 10 per cent respectively.

The report also points to growing competition in the sector, particularly from Chinese electric vehicle makers, which it says are narrowing the gap with established premium brands on interior quality and technology.

It argues that advanced driver-assistance systems, AI-powered infotainment and over-the-air software updates are becoming increasingly important in how luxury SUVs are sold, especially to younger and more digitally focused buyers.

Future Market Insights said the market still faced challenges including high ownership costs, regulatory pressure and the investment needed to support electrification, battery development and charging infrastructure.

READ MORE: ‘Highway robbery: how the UK’s post-Brexit electric car policy blew a fuse‘. Post-Brexit, Britain steered clear of EU-style additional tariffs on Chinese electric vehicles in a bid to make them cheaper. Instead, UK drivers are paying much the same while manufacturers appear to pocket the difference, says Steve McCauley.

Do you have news to share or expertise to contribute? The European welcomes insights from business leaders and sector specialists. Get in touch with our editorial team to find out more.

_{Main image: Harry Tucker/Pexels}