Electric Powertrain Market

[480 Pages Report] The electric powertrain market is estimated at USD 96.7 billion in 2023 and is projected to reach USD 230.5 billion by 2030, at a CAGR of 13.2%. Attractive incentives by governments for mass adoption and domestic production of electric vehicles, increasing demand for electric cars, and the decreasing cost of electric powertrains will drive the market.

The increasing electric car fleet has pushed automakers to introduce innovative technologies in electrified powertrains. Key innovations in battery chemistry to increase energy density and the expansion of production plants, along with cost optimization, have also been major enablers for the electric powertrain market. The growth of the BEV electric powertrain market is a major trend in the automotive industry. As BEVs are becoming more affordable and practical, they are being supported by government regulations.

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Market Dynamics

DRIVER: Government support to increase EV sales to lower CO2 emissions

Governments worldwide are offering incentives to encourage people to buy electric vehicles. These incentives can include tax breaks, rebates, and free parking. These incentives make electric cars more affordable for consumers, which can help to boost demand. Stricter emission norms imposed by the government for lower CO2 emissions force automakers to make their vehicles more efficient and environmentally friendly. Companies across the globe, including governments, are investing in infrastructure to support electric vehicles. This includes building charging stations and improving the electrical grid. This will make it easier for people to own and operate electric vehicles, which will also help to boost demand. The government policies are helping to create a more favorable environment for electric powertrain manufacturers and electric vehicle consumers. As a result, the hybrid powertrain market is expected to grow rapidly in the coming years.

RESTRAINT: Lack of charging infrastructure for EVs

Electric vehicles (EVs) need to be charged regularly, and the lack of charging stations can make it difficult for people to own and operate EVs. This can be a significant barrier to adoption, as people may be hesitant to buy an EV if they are not confident they can find a place to charge it. Charging stations can be expensive, making it difficult for businesses and governments to justify the investment. The scarcity of charging infrastructure limits the market penetration of electric vehicles, particularly in regions with sparse charging options. Consumers may be hesitant to switch to electric vehicles if they cannot access convenient and readily available charging stations, leading to a slower adoption rate of EVs, impacting the electric powertrain market. This lack of a reliable and widespread charging network can deter potential electric vehicle (EV) buyers, who may be concerned about finding charging points during their daily commutes or longer trips. This, in turn, affects consumer confidence in the feasibility of owning an electric vehicle. Governments worldwide are investing in charging infrastructure, helping to increase the number of available charging stations. Businesses are also installing charging stations, as they see this to attract customers and employees who drive EVs.

OPPORTUNITY: Development of lithium-ion batteries

Lithium-ion batteries are the most common type of battery used in electric vehicles (EVs). They are lightweight, have a high energy density, and can be recharged quickly. As the demand for EVs grows, the need for lithium-ion batteries is also expected to grow. Developing new lithium-ion battery technologies is also an opportunity for the electric vehicle powertrain market. New technologies like solid-state batteries could offer higher energy densities and longer ranges than traditional lithium-ion batteries. This could make EVs even more attractive to consumers and could help to accelerate the growth of the market. The development of lithium-ion batteries is an integral part of the growth of the market. Lithium-ion batteries are also expected to grow as the demand for EVs grows. As the market grows, a higher need for cost-effective batteries exists. Developing more efficient and cost-competitive lithium-ion batteries can make electric vehicles more affordable and accessible to a broader range of consumers. Samsung SDI, CATL, LG Energy Solution, and Panasonic are some of the prominent players in the battery manufacturing market. These companies are investing heavily in research and development to improve the performance and cost of lithium-ion batteries. This is helping to drive the growth of the electric powertrain systems market.

CHALLENGE: High cost of electric components

Electric vehicles (EVs) rely on various electronic components, including power electronics, sensors, and actuators. These components are essential for the operation of EVs, but they can be expensive. The high cost of electronic components can make it difficult for automakers to produce affordable EVs for consumers. The battery pack is one of the most costly components of an electric vehicle. While advancements in battery technology have led to reductions in battery costs over the years, they remain a significant portion of the overall vehicle cost. Lithium-ion battery production involves expensive materials and complex manufacturing processes, impacting the final price of electric vehicles. High-performance electric motors and sophisticated power electronics are necessary for efficient energy conversion and vehicle performance, but they can add to the overall cost of the electric powertrain. Automakers are also exploring alternative materials like graphene that could replace rare earth metals in electronic components.

Electric Powertrain Market Ecosystem

The ecosystem analysis highlights various electric powertrain market players, primarily represented by raw material suppliers, component manufacturers, electric vehicle manufacturers, and end users. Three main components are used in electric powertrains: electric motor, power electronics, and battery. The market ecosystem is complex and continuously evolving as technological advancements, consumer preferences, and government policies shape the trajectory of the electric vehicle industry.

Air compressors will be the largest market in the FCEV powertrain market.

The growth of air compressors in FCEV powertrains is expected to be driven by the increasing demand for fuel-cell electric vehicles (FCEVs). Fuel-cell electric vehicles use air compressors to supply the required oxygen to the fuel cell stack for the electrochemical reaction that generates electricity to power the vehicle. The growth of FCEVs is estimated to grow across the globe, with the Asia-Pacific region leading the market as the demand for FCEVs also grew faster in this region. Several countries in the Asia Pacific region have implemented supportive policies and incentives to promote the adoption of fuel-cell vehicles. According to IEA, the number of FCEVs running on the road to grow by almost 40% in 2022. Governments across the globe have offered financial incentives, tax benefits, and subsidies to manufacturers and consumers to encourage the development, production, and purchase of FCEVs. As the hydrogen infrastructure expands, the demand for FCEVs and related components like air compressors also increases.

The motor/generator segment will be leading in the BEV powertrain market.

The motor/generator segment will lead the BEV powertrain market in the coming years. The electric motor converts electrical energy from the battery into mechanical energy to drive the vehicle's wheels. As the battery electric vehicle market expands, there has been ongoing research and development in motor/generator technology. This has resulted in more efficient, compact, and cost-effective motor/generator solutions for electric powertrains. For instance, Robert Bosch Gmbh developed a 230 E-Motor which provides long service life as a component. New technologies, such as silicon carbide (SiC) motors, are being developed that could improve the performance and efficiency of motors/generators. The market is estimated to be the fastest growing in RoW (Rest of World), including Brazil and South Africa. Other regions, such as Asia Pacific, Europe, and North America, have also been experiencing significant growth in electric vehicle adoption and the demand for electric powertrain components.

Asia Pacific is estimated to be the fastest-growing electric powertrain market.

Asia Pacific is home to some of the world's largest and most populous countries, such as China, India, and Japan. These countries are all seeing a rapid increase in demand for electric vehicles. The demand for electric vehicles in this region is increasing rapidly, and the government also offers subsidies to consumers who purchase electric vehicles and invest in charging infrastructure. In China, for instance, the government has set a target of 40% of all car sales to be electric vehicles by 2030. According to MnM analysis, China will be the largest market for electric powertrain market by 2030. Battery technology is also available in this country, another factor driving the growth of the market. China is also home to some of the world’s largest battery manufacturers, such as CATL and BYD. These companies are able to produce batteries at a lower cost than their counterparts in other countries, which will support the electrification trend in the region. According to MnM analysis, India is estimated to be the fastest-growing market. The Indian government has strongly endorsed electric vehicle development and aims to be a 100% electric-vehicle nation by 2030.  The country has registered EV sales of more than 12,43,200 units making a 154% year-on-year growth compared to 2021 sales. Indian private companies like Tata Power and Mahindra Electric are putting up charging stations in shopping malls and other such places of public access, due to which consumers are more likely to buy EVs over other cars. This growing electric vehicle market drives the market. As a result of all of these factors, Asia Pacific is expected to continue to be a growing market for electric powertrains in the coming years.

Key Market Players

The key players in the electric powertrain manufacturers are Robert Bosch Gmbh (Germany), Mitsubishi Electric (Japan), Magna International Inc. (Canada), Continental AG (Germany), and Hitachi Astemo Ltd. (Japan). These companies have strong distribution networks at a global level and offer an extensive product range. These companies adopt strategies such as new product developments, collaborations, and contracts & agreements to sustain their market position.

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Recent Developments

• In November 2021, Mitsubishi Electric Corporation (Mitsubishi Electric) entered the market of e-axles that integrate motors, inverters, and reduction gears for electric vehicles (EVs).
• In December 2021, Magna International Inc. (Magna) launched its all-electric connected powertrain, the EtelligentReach. The complete system comprises two electric motors, inverters, and transmissions and leverages advanced software to optimize vehicle range and driving dynamics.
• In February 2023, Continental AG launched a new electric motor rotor position sensor (eRPS) for electric vehicles. eRPS uses inductive technology to detect the precise position of the rotors of synchronous electric machines, resulting in increased efficiency and smoother operation.
• In April 2023, Denso Corporation (Denso) developed its first inverter with silicon carbide (SiC) power semiconductors. The inverter will be integrated into the BlueE Nexus Corporation's eAxle, installed in the Lexus RZ.
• In April 2021, Dana Inc. announced that their Spicer powertrain technologies, including the Dana 60 front-beam drive axle, the Dana 80 AdvanTEK dual rear-wheel drive, and the Spicer SPL drive shaft, are fitted to the Ford F-600 Super Duty.

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