Electric Powertrain Market Overview, 2024-2029

Electric powertrains can be traced back to the beginning of the 19th century, at which time electric vehicles were already an alternative to steam- and internal-combustible-engine vehicles. These sons of ingenuity, like Robert Anderson and Thomas Davenport, who managed to make primitive electric self-moving carriages and locomotives, paved the way for future improvements in the technology of electric drive. In the late 19th and early 20th centuries, electric cars became popular on city streets, as they were quiet and more comfortable to operate as this was in contrast to gasoline cars of that time, which were noisy and difficult to start. Fleets of electric taxis and delivery trucks traveled the streets of cities such as New York and London.

Aiding to the new demand was the continued development in technology are much-improved batteries and more efficient electric motors. With the invention of cheap petrol cars, innovation in internal combustion technology, electric vehicle growth was tempered for much of the 20 th century. Electric drive trains became niche products, primarily used in dedicated applications - for instance, fork-lifts and golf carts - with gas and diesel internal combustion engines ruling the roost of the automotive world. Across the globe, governments began designing policies for zero-emission vehicles and provided incentives for vehicle manufacturers to study investments in electric mobility solutions.

The introduction of HEV and later PHEV has been a stepping stone between traditional internal combustion engines and fully electric vehicles amidst increasing fuel efficiency and reducing emissions. Improvement in technology continues to drive the growth of the electric powertrain market. Advances in battery chemistry, solid-state batteries, and fast-charging infrastructure focus on two major issues are range anxiety and long recharging times, to make electric vehicles more usable and convenient for everyday life. Electric powertrains are also combined with advancements in autonomous driving technologies and vehicle-to-grid capabilities, which open the pathway towards smarter, more efficient transportation systems.

According to the report, the market is anticipated to cross USD 413.73 Billion by 2029, increasing from USD 154.57 Billion in 2023. The market is expected to grow with an 18% CAGR from 2024 to 2029. The electric powertrain market will focus on innovations pertaining to sustainable materials and recycling practices to minimize environmental impacts from cradle to grave. Key efforts would go into the reduction of carbon footprints from battery manufacturing, optimization of resource efficiency in the process of recycling batteries, and consequently introducing circular economy principles in the electric vehicle design and production.

The closed loops of key materials supply chains by the collaborations of carmakers, battery manufacturers, and recycling facility operators bring about responsible stewardship of resources and stimulate sustainable patterns of consumption. Cultural shifts and changes in consumer behavior are accompanying the global adoption of electric powertrains in the pursuit of a sustainable lifestyle and environmental consciousness. Electric Vehicles become an icon of individual commitment to reducing carbon footprint and offering eco-friendly choices of transport; this makes consumer preference and corporate sustainability strategy uniform across demographic groups and geographic regions. Electric powertrains provide resilience benefits in disaster-prone areas. It is in such applications that BEVs and PHEVs would be able to act as back-up power sources for essential services and evacuation efforts in cases of disasters, possibly improving community resilience and disaster-response capacity, especially in communities most vulnerable to them.

Market Drivers

• Climate Change Mitigation Efforts: Global efforts to mitigate climate change are a significant driver for the electric powertrain market. International agreements such as the Paris Agreement compel countries to reduce greenhouse gas emissions. As the transportation sector is a major contributor to emissions, transitioning to electric vehicles (EVs) is seen as a crucial step. This global push towards sustainability is leading governments and corporations worldwide to invest heavily in EV technology and infrastructure, thereby driving the market forward.
• Rising Fuel Costs and Energy Security: The increasing cost of fossil fuels and concerns about energy security are prompting a shift towards electric powertrains. As oil prices fluctuate and geopolitical tensions threaten the stability of oil supplies, many countries and consumers are looking for more reliable and cost-effective energy alternatives. Electric vehicles, which can be powered by a variety of energy sources including renewables, offer a viable solution to these issues, contributing to the growing adoption of electric powertrains.

Market Challenges

• Raw Material Sourcing for Batteries:The sourcing of raw materials such as lithium, cobalt, and nickel, which are essential for battery production, poses a significant challenge. These materials are often mined in politically unstable regions, leading to supply chain risks. The environmental and social impacts of mining operations are raising concerns. Developing sustainable and ethical sourcing practices, as well as recycling technologies, is crucial to ensure the long-term viability of the electric powertrain market.
• Consumer Acceptance and Market Penetration: Despite growing interest in EVs, consumer acceptance remains a challenge. Misconceptions about the performance, range, and reliability of electric vehicles persist, particularly in markets where traditional internal combustion engine (ICE) vehicles dominate. Overcoming these perceptions requires comprehensive education and awareness campaigns, as well as continued improvements in EV technology and infrastructure to build consumer confidence and drive market penetration.

Market Trends

• Development of Advanced Battery Technologies: There is a strong trend towards the development of advanced battery technologies, such as solid-state batteries, which promise higher energy density, faster charging times, and improved safety compared to current lithium-ion batteries. Companies and research institutions worldwide are investing in this next generation of batteries, which could revolutionize the electric powertrain market by making EVs more efficient and cost-effective.
• Autonomous Electric Vehicles: The convergence of electric powertrains with autonomous driving technology is a major trend shaping the future of transportation. Autonomous electric vehicles (AEVs) offer the potential for increased safety, reduced traffic congestion, and greater mobility for people with disabilities or those unable to drive. Companies like Waymo, Tesla, and traditional automakers are investing heavily in the development of AEVs, which are expected to play a significant role in future transportation ecosystems.

Electric powertrains are growing in commercial vehicles across the globe, directly connected with the reduction of operational costs and compliance with strict emissions regulations.

Commercial vehicles, which range from delivery vans, trucks, and buses, electification are based on economic and regulatory benefits. Large fleets running companies now realize that electric vehicles can significantly reduce the total cost of ownership through reduced fuel costs, lower maintenance, and government incentives. Fossil fuels are getting increasingly expensive, and their prices are highly unstable, so electric powertrains are creating a kind of stable financial value. On the regulatory front, governments worldwide have instituted progressively tight emissions standards that will tend to reduce both air pollution and greenhouse gases simultaneously.

The EU and California have set very ambitious CO2 reduction targets in terms of low-emission zones and zero-emission vehicle mandates. These regulations force fleet operators to introduce cleaner technologies to avoid penalties and enjoy subsidies for implementing the change. Popular sentiments are increasingly inclined towards green solutions, thereby putting pressure on businesses to turn green. There are also operational advantages to e-commercial vehicles - quieter operation - with potential charging overnight during off-peak electricity hours, which could further drive up cost savings. The economic incentives, pressure from regulations, and environmental benefits are hence driving global growth in electric powertrains, resulting solely from the commercial vehicle market.

Improvement in efficiency, reliability, and flexibility in power systems by power electronic controllers is a prime factor that enhances the growth of the electric power market worldwide.

The advanced semiconductor devices, in the form of thyristors, power transistors, and IGBTs, constitute building blocks of electronic controllers that control and regulate the flow of electric power. These controllers not only improve the performance of the power systems but also help the owners avoid more expensive extra energy losses. The major uses of power electronic controllers is in renewable power systems such as solar and wind. These are naturally variable sources and require complex control systems in order for them to make them parallel-compatible with traditional sources.

Power electronic controllers efficiently convert DC power generated by solar panels or wind turbines into AC power suitable and ready for transmission over long distances. Besides that, they provide other grid-support functions that relate to reactive power control, voltage regulation, and frequency control, participating in the processes that keep the stability and balance of the power grid. An important application of power electronic controllers regards electric vehicles. Increasingly adopted worldwide, EVs are requiring high-performance power electronic controllers for controlling the charge/discharge of the battery, the motor drive, and regenerative braking.

Power electronic controllers improve EV powertrain efficiency and reliability while reducing their size and weight. Power electronic controllers have found a niche in a variety of industrial applications like motor drives, power supplies, and automation systems for industries. With the above, they are able to provide proper control over the speed and torque of motors while reducing harmonic distortion and improving power factor correction. This will result in huge savings on energy and a reduction in the cost of maintenance, while enhancing productivity.

HEV/PHEVs is growing due to their range anxiety and infrastructure limitations as this technology provides a practical segue to full electrification.

HEVs and PHEVs leverage tremendous growth in the global electric powertrain market, mitigating the differences between traditional internal combustion engines and fully electric vehicles since this technology offers a compromise to the consumer that alleviates concerns of limited driving range and inadequate charging infrastructure common with purely electric vehicles. HEVs and PHEVs combine these advantages of electrical drive with the reliability and familiarity of traditional gasoline engines, thus enabling journeys of long distances without compromising on their improved fuel economy and reduced emissions.

Besides, these hybrid drive systems often require far-reaching changes in existing manufacturing processes and hence are more appealing to automakers who want to move their product lines as gradually as possible. There's also an attraction of HEV/PHEV powertrains to a broader group of consumers than perhaps those who may not have the home charging solutions available or who may live in areas where there is less local public charging. As emissions regulations increase globally at the hand of governments, HEVs and PHEVs are presentable solutions for both automakers and consumers to meet new standards until the time full electrification infrastructure is built.

The APAC region is growing globally in the electric powertrains market due to strong support from governments and rapid technological developments, which are driving the wide diffusion of electric vehicles.

Ambitious programs by countries like China, Japan, and South Korea assist in hitting targets on Electric Mobility regarding Urban Air Pollution, Energy Security, and Climate Change Mitigation. China, due to heavy subsidies provided by the government, tax benefits, and tight emission regulations that have pushed carmakers and buyers towards electric vehicles, has easily emerged as the world's biggest electric vehicle market. One of the major drivers of APAC's growth in electric powertrains is technological innovation, certainly.

The region has innovators that are companies such as BYD, Tesla, and Nissan, which are the first to enhance innovations in battery technology, further improving energy density while lowering costs and generally enhancing electric vehicle performance. This has dramatically increased the driving range of EVs and cut down recharging time - two of the key concerns addressed by consumer fears relating to range anxiety and general convenience. The region also pushes market growth with a rise in consumer behavior toward cleaner and more sustainable forms of transport. Rapid urbanization in the major cities across this region increases concerns on air quality, motivating consumers to find alternatives to traditional forms of gasoline-powered vehicles. The electric vehicle, with zero tailpipe emissions, makes these environmental issues very appealing to the solution for which socially conscious consumers of the changing environment go for thickly populated urban areas.

• In January 2024, VinFast, a Vietnamese electric vehicle manufacturer, has entered a memorandum of agreement with the state government of Tamil Nadu to develop electric vehicle manufacturing facilities in India as the automaker looks forward to breaking into the world's third-largest vehicle market.
• In September 2023, A joint venture between South Korea's LG Electronics Inc. and Canada's Magna International Inc., LG Magna e-Powertrain Co. has disclosed strategies to develop an electric vehicle parts factory in Hungary, following the home appliance giant's push to lead the world's future mobility sector. An EV powertrain maker, LG Magna, is ready to begin operations in 2026, producing driving motors at the facility in Miskolc with plans to produce other components based on the demand in the world's second-largest clean vehicle market as per the statement by the LG Electronics without offering financial details on the investment.
• In October 2020, Continental AG’s Powertrain segment Vitesco Technologies announced the launch of a new transmission control system. It is the world’s first transmission control system equipped with over molding control electronics technology.
• In August 2020, Magna International Inc. announced the expansion of its powertrain business in Slovakia, Europe. The company initiated the construction of the manufacturing facility in Slovakia to develop powertrain metal forming solutions.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Electric Powertrain market outlook with its value and forecast, along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Vehicle Type:

• Passenger Car
• Commercial Vehicle

By Component:

• Battery
• Power Electronic Controller
• Motor/Generator
• Converter
• Transmission
• On-Board Charger

By Application:

• BEV
• HEV/PHEV

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the research team made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once the research team attained the primary data, they verified the details obtained from secondary sources.

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Electric Powertrain industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.