Electric Powertrain Market Size, Share, Forecast, & Trends Analysis by Propulsion Type (BEV, HEV, FCEV), Component (Motor/Generator, Battery Packs, Converters, On-board Chargers, Others), Vehicle Type (Passenger Vehicles, Commercial Vehicles, Others) & Geography - Global Forecast to 2031

Electric Powertrain Market Size & Forecast

The Electric Powertrain Market is expected to reach $288.9 billion by 2031, at a CAGR of 14.7% from 2024 to 2031. The growth of the electric powertrain market is driven by increasing demand for electric vehicles, stringent carbon emission norms, increasing government focus on public transport electrification, and increasing demand for high-performance motors. However, the high purchase costs of electric vehicles are a factor restraining the growth of this market.

Furthermore, the rising demand for electric vehicles in developing economies and innovations in battery technology are expected to generate growth opportunities for the stakeholders in this market. However, a lack of charging infrastructure and motor failure due to overheating, leading to reliability concerns, are major challenges impacting market growth. Additionally, the emergence of fuel cell electric vehicles and R&D in rare earth material-free motors are prominent trends in the electric powertrain market.

Electric Powertrain Market Growth Drivers

Increasing Demand for Electric Vehicles Boosting Market Growth

The global automotive industry is gradually transitioning from fossil fuel-based vehicles to electric vehicles. Changing consumer preferences and lifestyle trends are driving demand for electric vehicles. In addition, the development of EVs, increased adoption of electric buses in public transportation, and the focus of countries on the development of charging infrastructure are also surging demand for electric vehicles. For instance, in January 2024, Volvo Group (Sweden) launched its first truck model ever developed with an electric drive. The electric powertrain is a crucial component of an EV because it is used to power electric vehicles. Hence, technological advancements and increasing investments in EV development by automotive OEMs, coupled with innovation in battery technology, are driving the growth of this market. 

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Increasing Government Focus on Public Transport Electrification is Driving the Demand for Electric Powertrain Market

Government policies have a significant influence on the adoption of Electric Vehicles (EVs), including electric buses. Electric buses have already penetrated public transport across key cities around the world, supported by national and local policies to curb air pollution. In addition, several countries are promoting the electrification of commercial vehicles for cleaner transport. For  instance, in February 2024, the state-run Thailand Board of Investment announced tax incentives for the introduction of electric trucks and buses in company fleets. Also, in 2021, the Maharashtra Electric Vehicle Policy was approved to promote Battery Electric Vehicles (BEVs) in the State of Maharashtra, India. The policy targets six urban agglomerations, i.e., Mumbai, Pune, Nagpur, Nashik, Aurangabad, and Amravati in the state of Maharashtra, to achieve 25% electrification of public transport by 2025. Hence, such a focus of governments on the electrification of public transport is expected to support the growth of the market.

Electric Powertrain Market Trends

Emergence of Fuel Cell Electric Vehicles

Several countries are in the race toward a greener future. The global transport sector is also undergoing a significant transformation. Zero-emission vehicles, both battery-electric and fuel-cell electric vehicles, are quickly becoming prominent across major auto markets. Unlike electric vehicles, which require several hours to recharge, fuel cell electric vehicles can be refueled in as little as 10 minutes, mirroring the convenience of traditional ICE vehicles but without the environmental harm. Furthermore, the scalability of hydrogen fueling infrastructures and the potential for green hydrogen production make fuel cell electric vehicles not just a transitional technology but a long-term sustainable solution. Several countries have already started the adoption of fuel cell electric vehicles, including fuel cell electric buses. Such growing adoption and potential of fuel cell electric vehicles will drive the production of electric powertrain components required for fuel cell electric vehicles.

R&D in Rare Earth Material-free Motors

The automotive manufacturers are strongly focusing on developing more electric cars and trucks, while several companies are in the race to build the ideal green motor. Currently, the electric vehicle motor is produced using rare earth materials for its powerful, reliable, and lightweight properties. However, mining and processing of rare earth materials comes at an environmental cost, and China holds a near-monopoly stake in them. Due to these reasons, companies such as Niron Magnetics (U.S.) and Advanced Electric Machines Ltd (U.K.) are focusing on the development and production of rare earth material-free EV motors. Several automotive manufacturers, suppliers, governments, and investors are investing in such companies to eliminate rare earth material use and reduce reliance on geographically concentrated supply chains.

Electric Powertrain Market Opportunity

Innovations in Battery Technology are Expected to Generate Growth Opportunities for Market Players

New EV battery innovations are on the horizon, promising to improve performance, drive down costs, and reduce environmental impact. Several companies are focusing on battery innovations to improve EV performance, drive down costs, and eliminate dependence on scarce materials. Some of them are focusing on incremental improvements over current lithium-ion batteries, and others are taking an entirely new approach, such as the development of solid-state batteries and sodium-ion batteries. The aim of battery improvements is to reduce the cost of EVs while delivering faster charging and relieving range anxiety, which will increase the adoption of electric vehicles. Hence, the increased focus of several companies on bringing innovation in battery technology is expected to generate growth opportunities for market players.

Electric Powertrain Market Analysis: Key Findings

By Propulsion Type: In 2024, the Battery Electric Vehicles Segment to Dominate the Electric Powertrain Market

Based on propulsion type, the global electric powertrain market is segmented into battery electric vehicles, hybrid electric vehicles, and fuel cell electric vehicles. In 2024, the battery electric vehicles segment is expected to account for the largest share of above 72.0% of the global electric powertrain market. The segment’s large market share is mainly attributed to growing awareness regarding the role of electric vehicles in reducing emissions, increasing government policies aimed at promoting electric mobility, the growing focus of manufacturers on the development of zero-emission vehicles, and stringent government rules and regulations towards vehicle emissions. The electric powertrain is a vital component of battery electric vehicles which powers the vehicles. An increase in demand for electric vehicles is expected to drive the growth of the electric powertrain market.

However, the fuel cell electric vehicles segment is expected to record the highest CAGR during the forecast period. The growth of this segment is mainly driven by the increasing focus of electric vehicle manufacturers on manufacturing fuel cell electric commercial vehicles and the rising deployment of fuel cell electric buses for public transportation. For instance , in June 2021, Tata Motors won a tender from IOCL to provide 15 FCEV buses to evaluate the potential of hydrogen-based PEM fuel-cell technology in India. The delivery of these buses heralded a new era in inter-city mass public transport and marked a step forward toward fulfilling the aspiration for sustainable mobility.

By Component: In 2024, the Battery Packs Segment to Dominate the Electric Powertrain Market

Based on component, the global electric powertrain market is segmented into motor/generator, battery packs, power electronics controllers (PCUs), converters, battery management systems, on-board chargers, fuel cell stack, fuel processor, and other components. In 2024, the battery packs segment is expected to account for the largest share of above 60.0% of the global electric powertrain market. The segment’s large share is mainly attributed to the growing focus of companies on the development of compact-sized electric battery packs, growing government support for the manufacturing of electric vehicle batteries, improvement in battery technology for powering electric vehicles, and the growing focus of companies on recycling electric vehicle batteries.

In addition, the increasing focus of EV players on the production of electric vehicle batteries is also contributing to the segment's large market share. For instance , in April 2024, Hyundai Motor Co (South Korea) and Kia Corp (South Korea) signed a memorandum of understanding with India's Exide Energy Solutions Ltd to supply batteries for their electric vehicles in a bid to boost competitiveness in the auto market. Under this partnership with Exide Energy, a unit of Exide Industries Ltd aims to localize their EV battery production in India, specifically focusing on lithium-iron-phosphate (LFP) cells.

However, the power electronics controllers (PCUs) segment is expected to record the highest CAGR during the forecast period. The growth of this segment is mainly driven by the need for cost-effective and efficient power electronics solutions, the role of PCUs in enabling the transition to electric mobility and the ability of power electronics controllers to efficiently control and convert electricity. In addition, advancements in semiconductor materials, like Silicon Carbide (SiC) and Gallium Nitride (GaN), led to the development of power electronics components with higher efficiencies, smaller sizes, and better thermal properties.

By Vehicle Type: In 2024, the Passenger Vehicles Segment to Dominate the Electric Powertrain Market

Based on vehicle type, the global electric powertrain market is segmented into passenger vehicles, electric two-wheelers, e-scooters & e-bikes, and commercial vehicles. In 2024, the passenger vehicles segment is expected to account for the largest share of above 63.0% of the global electric powertrain market. The segment’s large share is mainly attributed to factors such as the increasing focus of automotive manufacturers on catering to the needs of consumers’ evolving preferences, leveraging technological advancements to create a sustainable and competitive automotive landscape, need to align production with regulatory changes and focus on increasing driving range. For instance, HYUNDAI TRANSYS Co., Ltd. (South Korea) produces a wide range of eco-friendly EV driving systems.

Moreover, the commercial vehicles segment is expected to record the highest CAGR of 16.5% during the forecast period. The commercial vehicles segment is further segmented into light commercial vehicles, medium commercial vehicles, and heavy commercial vehicles. The growth of this segment is mainly driven by the growing demand for electric commercial vehicles, such as electric buses in public transport, and the growing focus of automotive players on the electrification of commercial vehicles.

Geographical Analysis

In 2024, Asia-Pacific Region to Dominate the Electric Powertrain Market

In 2024, Asia-Pacific is expected to account for the largest share of above 55.0% of the global electric powertrain market. The large market share of this segment is attributed to the dominance of China in the electric vehicles market, growing subsidies for EV manufacturers for production, and the growing focus of companies on expanding EV production in the region. For  instance, in November 2023, Mahindra & Mahindra Limited (India) selected Valeo (France) to provide electric powertrains for their “Born Electric” passenger vehicle platform. This strategic collaboration also includes on-board charger combos for Mahindra’s electric utility vehicles.

However, the Europe region is projected to register the highest CAGR of 16.0% during the forecast period. This region's growth is attributed to increasing investments by leading automotive OEMs in the research and development of electric vehicle technology, the development of stringent greenhouse gas emissions regulations and policy frameworks, the presence of several EV manufacturers, and rising EV production in the region due to the growing demand for electric vehicles.

Electric Powertrain Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the electric powertrain market are Robert Bosch GmbH (Germany), Magna International Inc. (Canada), Mitsubishi Electric Mobility Corporation (Japan), Valeo (France), DENSO CORPORATION (Japan), Hitachi Astemo, Ltd. (Japan), ZF Friedrichshafen AG (Germany), Volkswagen AG (Germany), BorgWarner Inc. (U.S.), Schaeffler AG (Germany), NIDEC CORPORATION (Japan), Marelli Holdings Co., Ltd. (Japan), Continental AG (Germany), Cummins Inc. (U.S.), and Dana Incorporated (U.S.).

Electric Powertrain Industry Overview: Latest Developments from Key Industry Players

• In  July 2023, Semiconductor Components Industries, LLC (onsemi) (U.S.) entered into an agreement with Magna International Inc. (Canada) for Magna to integrate onsemi’s EliteSiC intelligent power solutions into its eDrive systems. By integrating onsemi’s industry-leading EliteSiC MOSFET technology, Magna eDrive systems can offer better cooling performance and faster acceleration and charging rates, improving efficiency and increasing the range of electric vehicles (EVs).

• In  March 2023, DENSO CORPORATION (Japan) developed an inverter with silicon carbide (SiC) power semiconductors. This inverter is incorporated in the eAxle, an electric driving module developed by BluE Nexus Corporation that will be used in the new Lexus RZ.

• In May 2021, Marelli Holdings Co., Ltd. (Japan) entered into an agreement with Punch Powertrain nv (Belgium) to form a joint venture focused on e-axle solutions. Both companies combine their extensive expertise in electric powertrains to offer integrated systems for electric vehicles.

Electric Powertrain Market Research Summary

Key questions answered in the electric powertrain market report: