Driveline Electric Vehicle Market Report 2026

The driveline electric vehicle market size has grown strongly in recent years. It will grow from $3.38 billion in 2025 to $3.65 billion in 2026 at a compound annual growth rate (CAGR) of 8%. The growth in the historic period can be attributed to ev adoption growth, decline of ICE drivetrains, demand for simplified powertrains, battery-electric platform development, automotive electrification.

The driveline electric vehicle market size is expected to see strong growth in the next few years. It will grow to $5 billion in 2030 at a compound annual growth rate (CAGR) of 8.2%. The growth in the forecast period can be attributed to push for vehicle efficiency, advancements in motor and inverter technology, platform standardization, autonomous vehicle integration, sustainable mobility policies. Major trends in the forecast period include growth of integrated electric drivelines, demand for high-efficiency power transmission, adoption of modular ev platforms, expansion of awd electric systems, lightweight drivetrain design.

The growing number of electric vehicles is expected to propel the growth of the driveline electric vehicle market going forward. An electric vehicle (EV) is a vehicle powered by an electric motor that draws electricity from a battery and can be charged from an external source. Driveline systems in electric vehicles transmit power from the electric motor to the wheels, enabling propulsion and determining the vehicle's performance and efficiency. For instance, in April 2024, according to the International Energy Agency (IEA), a France-based intergovernmental organization, the number of new electric car registrations in China reached 8.1 million in 2023, representing a 35% increase compared to 2022. Therefore, the growing number of electric vehicles is driving the growth of the driveline electric vehicle market.

Major companies operating in the driveline electric vehicle market are focused on developing integrated e-powertrain systems to drive their revenues in the market. An integrated e-powertrain system is a comprehensive, unified electric powertrain that combines the motor, power electronics, and energy storage components to propel an electric vehicle efficiently. For instance, in May 2023, ZF Friedrichshafen AG, a Germany-based technology company that supplies systems for passenger and commercial vehicles, launched AXTrax 2, a modular and integrated axle-based e-powertrain system that enables electrification of all types of commercial vehicles. It allows advanced digital and telematics systems to communicate and exchange data about e-axle systems through the controller area network bus. The AxTrax 2 is an axle-based system that replaces the engine, transmission, driveshaft, differential, and conventional axle to electrify a commercial vehicle. This design helps maximize the available space for batteries and enhances the manufacturer's design flexibility for future vehicle concepts.

In January 2025, American Axle & Manufacturing, a US-based automotive company, acquired Dowlais Group plc for approximately $1.44 billion. With this acquisition, AAM aims to expand its global footprint and diversify its driveline product portfolio, positioning itself as a comprehensive, powertrain-agnostic supplier capable of serving traditional, hybrid, and EV platforms worldwide. Dowlais Group plc is a UK-based manufacturer of driveline systems for automobiles, including electric vehicles.

Major companies operating in the driveline electric vehicle market report include Volkswagen AG, Ford Motor Company, General Motors Company, Mitsubishi Electric Corporation, Lion Electric Company, SAIC Motor Corp. Ltd., Robert Bosch GmbH, Hyundai Motor Company, Hitachi Automotive Systems, Tesla Inc., BYD Co. Ltd., Contemporary Amperex Technology Co. Limited, ZF Friedrichshafen AG, Continental AG, Magna International Inc., ABB Ltd., Beijing Automotive Group Co. Ltd., Zhejiang Geely Holding Group Co. Ltd., Valeo SA, BorgWarner Inc., Chang'an Automobile Co. Ltd., Dana Incorporated, GKN Drive Line Limited, Rivian Automotive Inc., Schaeffler Technologies AG & Co. KG, Fisker Inc.

Asia-Pacific was the largest region in the driveline electric vehicle market in 2025. The regions covered in the driveline electric vehicle market report include Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the driveline electric vehicle market report include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The driveline electric vehicle market consists of sales of electric motors, inverters, power electronics, axles, differentials, drivetrains, and control systems. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

This product will be delivered within 1-3 business days.