Electric Powertrain Market Size (2024 – 2030)

The Global Electric Powertrain Market was valued at USD 69.3 billion in 2023 and is expected to grow at a CAGR of 15.27% from 2024 to 2030, reaching a market size of USD 187.39 billion by 2030.

Electric powertrains, which consist of components such as motors, batteries, transmissions, and power electronics controllers, are essential for electric and hybrid vehicles. The rise in environmental concerns, coupled with government regulations aimed at reducing greenhouse gas emissions, is propelling the adoption of electric powertrains in the automotive industry. The market is experiencing rapid growth as both automakers and consumers shift towards electric and hybrid vehicles due to their reduced emissions, enhanced fuel efficiency, and technological advancements in electric mobility.

Key Market Insights

The Battery Electric Vehicle (BEV) segment dominated the market with a 60% share in 2023 and is expected to maintain its lead due to growing consumer preference for zero-emission vehicles and advancements in battery technology.

Asia-Pacific is the largest regional market, accounting for over 40% of global revenue in 2023, driven by increasing electric vehicle adoption in countries like China, Japan, and South Korea.

The motor/generator component segment accounted for the largest share of the market, contributing over 35% of the total revenue in 2023, as electric motors are a critical part of electric and hybrid vehicle powertrains.

The Plug-in Hybrid Electric Vehicle (PHEV) segment is expected to witness the fastest growth, with a CAGR of 18%, driven by government incentives and policies promoting plug-in hybrids as a transitional technology.

Governments across the globe are providing incentives, subsidies, and tax rebates to support the production and adoption of electric vehicles (EVs), further accelerating the demand for electric powertrain systems.

Battery cost reductions and improvements in energy density are enhancing the affordability and efficiency of electric powertrains, making electric vehicles more accessible to the general public.

OEMs (Original Equipment Manufacturers) are heavily investing in research and development to improve electric powertrain technologies, focusing on optimizing efficiency, extending vehicle range, and reducing charging times.

Global Electric Powertrain Market Drivers

Growing Demand for Zero-Emission Vehicles (ZEVs) is driving the market growth
The increasing awareness of environmental issues and the adverse effects of greenhouse gas emissions from internal combustion engine (ICE) vehicles are driving the demand for zero-emission vehicles (ZEVs) such as electric and hybrid vehicles. Governments around the world are enacting stringent regulations aimed at reducing carbon emissions and promoting the use of cleaner energy sources in the transportation sector. For instance, the European Union has set an ambitious target to reduce CO2 emissions from new passenger cars by 37.5% by 2030, compared to 2021 levels. Similarly, several countries, including Norway, China, India, and the United Kingdom, have announced plans to phase out the sale of new ICE vehicles within the next decade, boosting the demand for electric vehicles (EVs) equipped with electric powertrains. This regulatory push is accelerating the adoption of ZEVs and, in turn, driving the growth of the electric powertrain market. Moreover, consumers are increasingly prioritizing sustainability, with a growing preference for eco-friendly vehicles. The reduction in operational costs associated with electric vehicles, including lower fuel and maintenance costs, is further incentivizing consumers to shift towards electric mobility. As a result, the demand for electric powertrains is expected to witness substantial growth over the forecast period.

Technological Advancements in Electric Powertrains is driving the market growth
Continuous advancements in electric powertrain technologies are contributing to the market’s growth. Electric powertrain systems are becoming more efficient, reliable, and cost-effective due to innovations in electric motors, battery technologies, power electronics, and energy management systems. One of the key areas of technological improvement is in battery technology, where significant progress has been made in increasing energy density, reducing weight, and lowering costs. Lithium-ion batteries, which are widely used in electric vehicles, have seen substantial cost reductions due to advancements in manufacturing processes and economies of scale. Additionally, research into next-generation battery technologies, such as solid-state batteries, promises even greater energy efficiency and faster charging times, which will further boost the performance of electric powertrains. Electric motors are also undergoing significant improvements, with manufacturers focusing on enhancing power density, reducing heat generation, and optimizing energy consumption. Innovations in permanent magnet synchronous motors (PMSMs) and induction motors are improving the overall performance of electric powertrains, enabling electric vehicles to achieve longer driving ranges and better acceleration.

Government Policies and Incentives for Electric Vehicles is driving the market growth
Governments across the globe are playing a crucial role in driving the adoption of electric vehicles (EVs) through a variety of policies, incentives, and regulatory measures. These efforts are aimed at reducing the carbon footprint of the transportation sector and promoting the transition to clean energy. For example, China, the world’s largest electric vehicle market, offers generous subsidies and incentives for both consumers and manufacturers of electric vehicles. The Chinese government has implemented a new energy vehicle (NEV) mandate, which requires automakers to meet specific NEV sales targets, further fueling the demand for electric powertrains. Similarly, the European Union offers substantial tax credits and rebates for EV buyers, along with funding for research and development in electric mobility technologies. In the United States, several states, including California, offer financial incentives for the purchase of electric vehicles, while the federal government provides tax credits to EV buyers. Additionally, the Biden administration has outlined plans to invest heavily in EV infrastructure, including building a nationwide network of charging stations, which will support the growing demand for electric powertrains.
 

Global Electric Powertrain Market Challenges and Restraints

High Initial Costs and Affordability Issues is restricting the market the growth
Despite the growing popularity of electric vehicles (EVs) and advancements in electric powertrain technologies, one of the primary challenges hindering market growth is the high initial cost of electric vehicles compared to conventional internal combustion engine (ICE) vehicles. A significant portion of the higher cost is attributed to the expensive components that make up the electric powertrain, particularly the battery.Although battery costs have been declining over the past decade, they still represent a substantial portion of the total vehicle cost. The manufacturing of high-capacity lithium-ion batteries, which are commonly used in EVs, involves complex processes and the use of expensive raw materials like lithium, cobalt, and nickel. As a result, EVs remain relatively expensive, especially for middle-income consumers. In regions where government subsidies and incentives for EV purchases are not as strong, the affordability of electric vehicles remains a concern.

Infrastructure and Charging Network Limitations is restricting the market the growth
The availability of charging infrastructure is another critical challenge that affects the adoption of electric vehicles and, consequently, the electric powertrain market. A well-developed, easily accessible charging network is essential for the widespread use of EVs. However, in many regions, the charging infrastructure is still inadequate, particularly in rural and less developed areas. Range anxiety, which refers to the fear of running out of battery power without access to a charging station, remains a significant concern for potential EV buyers. While urban areas in developed countries have made significant strides in building EV charging networks, the same progress has not been made in other regions. For example, the lack of sufficient charging infrastructure in parts of Asia-Pacific, Latin America, and Africa poses a challenge for the mass adoption of EVs in these areas. Moreover, the standardization of charging connectors and payment systems across different regions and charging networks is another issue that needs to be addressed. The lack of uniformity can lead to compatibility issues between EVs and charging stations, further complicating the user experience.

Market Opportunities

The global electric powertrain market presents significant opportunities for growth, driven by several key factors, including the increasing demand for sustainable transportation solutions, advancements in battery technologies, and the growing focus on electric vehicle (EV) infrastructure development. One of the most promising opportunities lies in the commercial vehicle segment. While electric powertrains have gained substantial traction in the passenger vehicle market, the adoption of electric powertrains in buses, trucks, and delivery vehicles is still in its early stages. However, with the rising emphasis on reducing emissions from the commercial transportation sector, there is a growing push for the electrification of commercial fleets. Governments and large logistics companies are increasingly investing in electric trucks and delivery vans to comply with stringent emissions regulations and meet sustainability targets. This presents a significant growth opportunity for manufacturers of electric powertrains, especially as the demand for electric commercial vehicles is expected to rise rapidly in the coming years. Another area of opportunity is in the energy storage and vehicle-to-grid (V2G) technology. As electric vehicles (EVs) become more prevalent, the need for advanced energy storage systems is becoming increasingly important. Battery technologies that offer higher energy densities, faster charging times, and longer lifespans are in high demand. The development of solid-state batteries and other next-generation energy storage solutions holds immense potential for enhancing the performance of electric powertrains. Additionally, V2G technology, which allows EVs to feed electricity back into the grid, presents a unique opportunity to optimize energy usage and provide additional revenue streams for EV owners. V2G systems can help stabilize the grid by utilizing EV batteries as distributed energy storage during periods of high demand, creating new business opportunities for powertrain manufacturers and energy providers alike. Furthermore, the rise of autonomous electric vehicles (AEVs) is expected to create new opportunities for the electric powertrain market. As self-driving vehicles become more prevalent, the demand for efficient and reliable electric powertrains will increase. Autonomous vehicles, particularly those used in shared mobility services and ride-hailing platforms, require advanced powertrains that can handle continuous operation with minimal downtime. The integration of autonomous technology with electric vehicles will drive the demand for electric powertrains that offer enhanced efficiency, durability, and energy management capabilities.

ELECTRIC POWERTRAIN MARKET REPORT COVERAGE:

Electric Powertrain Market Segmentation - By Component

• Motor/Generator

• Power Electronics Controller

• Battery

• Transmission

The Battery segment is the largest in the global electric powertrain market, accounting for more than 40% of the total revenue in 2023. Batteries play a crucial role in determining the performance, range, and cost of electric vehicles (EVs), making them a key component of the electric powertrain. With advancements in lithium-ion batteries and the development of next-generation energy storage technologies such as solid-state batteries, the battery segment is expected to continue dominating the market. Reductions in battery costs, improvements in energy density, and faster charging times are further driving the growth of this segment.

Electric Powertrain Market Segmentation - By Vehicle Type

• Battery Electric Vehicles (BEVs)

• Plug-in Hybrid Electric Vehicles (PHEVs)

• Hybrid Electric Vehicles (HEVs)

The Battery Electric Vehicle (BEV) segment is the largest in the electric powertrain market, contributing over 55% of the global revenue in 2023. BEVs run entirely on electric power, using energy stored in batteries to power the vehicle. With zero tailpipe emissions, BEVs are considered a cornerstone of sustainable transportation and are witnessing widespread adoption across major markets. The segment’s growth is driven by increasing consumer demand for zero-emission vehicles, expanding charging infrastructure, and government incentives for BEV purchases. BEVs are expected to remain the dominant vehicle type in the electric powertrain market due to their environmental benefits and technological advancements.

Electric Powertrain Market Segmentation - By Region

• Asia-Pacific

• North America

• Europe

• South America

• Middle East and Africa

The Asia-Pacific region is the largest market for electric powertrains, holding over 45% of the global market share in 2023. Countries like China, Japan, and South Korea are leading the adoption of electric vehicles (EVs), driven by government regulations, incentives, and investments in EV infrastructure. China, in particular, dominates the market, accounting for the largest share of electric vehicle sales worldwide. The Chinese government’s focus on reducing air pollution and transitioning to clean energy is fueling the growth of the electric powertrain market in the region. Additionally, the presence of major EV manufacturers and battery producers in Asia-Pacific further supports the region’s leadership in the global electric powertrain market.

COVID-19 Impact Analysis on the Global Electric Powertrain Market

The COVID-19 pandemic had a significant impact on the global electric powertrain market, creating both challenges and opportunities for the industry. On one hand, the pandemic disrupted global supply chains, leading to delays in the production and delivery of electric vehicle components, including electric powertrains. Lockdowns, factory closures, and travel restrictions affected the availability of raw materials, particularly batteries, which are critical to the electric powertrain. As a result, many electric vehicle (EV) manufacturers faced production delays, leading to a temporary slowdown in EV sales during the early stages of the pandemic. On the other hand, the pandemic also accelerated the transition to electric mobility, as governments around the world introduced stimulus packages and recovery plans focused on promoting sustainable transportation. The European Union, for instance, included significant funding for green mobility in its COVID-19 recovery plan, aimed at boosting the adoption of electric vehicles and supporting the development of charging infrastructure. This renewed focus on sustainability and decarbonization provided a much-needed boost to the electric powertrain market, particularly in regions like Europe and Asia-Pacific. Additionally, the pandemic highlighted the importance of reducing reliance on fossil fuels and transitioning to cleaner energy sources. As air quality improved in many cities during lockdowns, consumers and policymakers became more aware of the environmental benefits of electric vehicles, leading to increased interest in electric powertrains. The growing emphasis on energy security and the need to reduce greenhouse gas emissions further reinforced the market’s long-term growth potential.

Latest Trends/Developments

One of the most prominent trends in the global electric powertrain market is the shift towards solid-state batteries. Solid-state batteries offer significant advantages over traditional lithium-ion batteries, including higher energy density, faster charging times, and improved safety. Several leading automakers and battery manufacturers are investing heavily in the development of solid-state battery technology, with the goal of bringing these next-generation batteries to market in the coming years. Solid-state batteries have the potential to revolutionize the electric powertrain industry by addressing some of the key challenges associated with current battery technologies, such as range limitations and charging infrastructure. Wireless charging is another emerging trend in the electric powertrain market. Wireless charging technology allows electric vehicles to charge without the need for physical connectors, providing a more convenient and seamless charging experience for users. Several companies are working on developing wireless charging systems that can be integrated into roads, parking lots, and garages, enabling electric vehicles to charge while they are parked or in motion. This technology has the potential to revolutionize the electric vehicle charging landscape and further accelerate the adoption of electric powertrains. Additionally, there is a growing focus on lightweight materials in electric powertrain design. Reducing the weight of electric vehicles is critical for improving energy efficiency and extending driving range. Manufacturers are increasingly using lightweight materials such as aluminum, carbon fiber, and advanced composites in the construction of electric powertrains to enhance vehicle performance and reduce energy consumption. This trend is expected to continue as automakers seek to optimize the efficiency of electric vehicles and meet regulatory requirements for energy efficiency and emissions reduction. Finally, the expansion of fast-charging infrastructure is playing a crucial role in the growth of the electric powertrain market. Governments and private companies are investing in the development of high-speed charging stations that can significantly reduce the time it takes to charge an electric vehicle.

Key Players

1. Tesla, Inc.

2. Continental AG

3. Robert Bosch GmbH

4. Siemens AG

5. ZF Friedrichshafen AG

6. BorgWarner Inc.

7. Magna International Inc.

8. Nidec Corporation

9. Valeo SA

10. Denso Corporation