Propulsion Systems Market Report 2026

The propulsion systems market size has grown strongly in recent years. It will grow from $143.84 billion in 2025 to $155.13 billion in 2026 at a compound annual growth rate (CAGR) of 7.8%. The growth in the historic period can be attributed to expansion of space exploration programs, growth in satellite deployment activities, increased defense spending on missile systems, advancements in propulsion material science, rising investments in aerospace research.

The propulsion systems market size is expected to see strong growth in the next few years. It will grow to $206.51 billion in 2030 at a compound annual growth rate (CAGR) of 7.4%. The growth in the forecast period can be attributed to increasing commercialization of space missions, rising demand for small satellite launch systems, expansion of deep space exploration initiatives, growing focus on sustainable propulsion fuels, increasing adoption of electric propulsion for spacecraft. Major trends in the forecast period include increasing development of advanced rocket and spacecraft engines, rising adoption of electric and hybrid propulsion technologies, growing focus on high-thrust and fuel-efficient systems, expansion of reusable launch vehicle propulsion, enhanced integration of digital simulation and testing.

The increase in defense expenditure is expected to drive the growth of the propulsion systems market in the coming years. Defense expenditure refers to the financial resources allocated by a country toward military activities and defense capabilities. Rising defense budgets are anticipated to boost demand for propulsion systems, as these systems are essential components in a wide range of defense applications, including rockets, unmanned aerial vehicles, satellite launch vehicles, aircraft, and other military platforms. For instance, in April 2024, according to the Stockholm International Peace Research Institute, a Sweden-based defense think tank, global military spending reached US$ 2.44 trillion in 2023, representing a 6.8% increase compared with 2022. Therefore, rising defense expenditure is expected to support increased demand for propulsion systems during the forecast period.

Major companies operating in the propulsion systems market are increasingly focusing on the development and introduction of hydrogen propulsion systems to strengthen their competitive positioning. Hydrogen propulsion systems utilize hydrogen as a fuel source to generate power for operating various vehicles and machinery. For example, in December 2023, Marelli Europe S.p.A., an Italy-based company, launched an advanced hydrogen propulsion system. This system features specially designed injectors with patented configurations and an advanced engine control unit tailored specifically for hydrogen-powered engines. These engines operate similarly to conventional internal combustion engines but use hydrogen as fuel, resulting in zero CO₂ emissions. Marelli’s hydrogen fuel system meets the stringent operational requirements of such engines, delivering precision, efficiency, strong performance, simplified integration, and reduced system complexity.

In January 2024, Yamaha Motor Co. Ltd., a Japan-based manufacturer of motorcycles, motorboats, and outboard motors, acquired Torqeedo for an undisclosed amount. Through this acquisition, Yamaha Motor Co. Ltd. aims to expand its electric propulsion technology portfolio and reinforce its presence in the rapidly growing market for sustainable marine propulsion solutions. Torqeedo is a Germany-based company specializing in the development and manufacture of electric motors and propulsion systems for marine applications.

Major companies operating in the propulsion systems market report include General Electric Company, Raytheon Technologies Corporation, The Boeing Company, Airbus SE, Northrop Grumman Corporation, Honeywell International Inc., Mitsubishi Heavy Industries Ltd., Safran S.A., L3Harris Technologies Inc., Rolls-Royce Holdings plc, Thales Alenia Space, IHI Corporation, Space Exploration Technologies Corp, Rafael Advanced Defense Systems Ltd., Moog Inc., Aerojet Rocketdyne Holdings Inc., OHB System AG, VACCO Industries Inc., Sitael S.p.A., CFM International, MSNW LLC, Busek Co Inc., Ad Astra Rocket Company, 3W International GmbH, Accion Systems Inc., CU Aerospace LLC, Ariane Group.

North America was the largest region in the propulsion systems market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the propulsion systems market report include Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the propulsion systems market report include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The propulsion system market consists of sales of the propeller, the turbine (or jet) engine, the ramjet, and the rocket. 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.

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