An electric powertrain consists of an electric motor, power electronics, and a transmission system that delivers power to the wheels or tracks. It replaced the conventional internal combustion engine and transmission system in electric vehicles and hybrid electric vehicles. Electric powertrains offer various benefits compared to conventional vehicles such as high fuel efficiency, low maintenance costs, and reduced carbon emissions. Electric vehicles equipped with electric powertrains are gaining widespread popularity. The global electric powertrain market is estimated to be valued at US$ 81.7 Bn in 2023 and is expected to exhibit a CAGR of 4.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Rising adoption of electric vehicles worldwide is a key driver expected to flourish the electric powertrain market over the forecast period. Various government policies and initiatives to promote electric mobility as well as growing consumer inclination towards electric vehicles are compelling automotive manufacturers to produce more electric vehicles equipped with advanced electric powertrains. According to the International Energy Agency, the global electric car stock reached 10 million in 2021, up from an estimated 5 million in 2019 and 2 million in 2017. By 2030, the annual sales of electric cars are projected to reach over 32 million units. This rapid increase in electric vehicle adoption is anticipated to boost the demand for electric powertrains during the forecast period.
Furthermore, strict emission regulations are putting pressure on automakers to develop more efficient and eco-friendly vehicles. For instance, countries like Norway, China, and India have imposed bans on the sale of fossil fuel vehicles, which is encouraging a large-scale transition to electric vehicles. Therefore, to comply with these regulations, leading automakers are heavily investing in the research and development of electric powertrain technologies. This is facilitating the design and production of more powerful, durable, and affordable electric powertrains, thereby propelling the market growth over the next eight years.
The global electric powertrain market size is dominating by electric vehicles (EVs) segment. Electric vehicles segment is dominating as majority of global investments are towards development of EVs to reduce emissions from vehicles. Switching to EVs from conventional vehicles is one of the major steps taken by governments globally to meet their Paris agreements commitments. EVs have witness significant improvements in recent years in terms of driving range and charging infrastructure, which have increased their adoption globally.
Political: Most governments globally are providing various subsidies and incentives for adopting electric vehicles to reduce reliance on fossil fuels. Stringent emission norms are also being introduced to push automakers towards electric powertrains.
Economic: Low operating costs of electric vehicles and falling battery prices are encouraging consumers to switch to electric vehicles. Many countries are also aiming to ban sales of new conventional vehicles by 2030-2040 which is boosting investments in electric powertrains market.
Social: Rising environmental consciousness is driving consumer preference for green vehicles. Advocacy by environmental organizations is also creating positive social sentiment towards electric vehicles.
Technological: Significant improvements in battery chemistry along with fast charging technologies are increasing driving range of EVs. Automakers are also extensively investing in developing dedicated electric vehicle platforms.
The global electric powertrain market is expected to witness high growth over the forecast period driven by supportive government policies and regulations.
Asia Pacific region currently dominates the market led by China. China has emerged as global leader in EVs and account for over 40% of global EV sales. It also houses manufacturing facilities of all major automakers for electric vehicles.
Key players operating in the electric powertrain market are Ferring B.V., Bayer AG, Braintree, Bausch Health Companies Inc., and Norgine B.V. The key players are extensively investing in developing improved battery packs, electric motors as well as software & controls related to electric powertrains. They are also collaborating with automakers for integrating their electric powertrain solutions.