Top Trends in the Electric Powertrain Market Shaping Electric Vehicles
The global electric powertrain market was valued at USD 83.30 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 15.3% from 2023 to 2030. The COVID-19 pandemic had a significant impact on the overall automotive industry, leading to a decline in the growth of the electric powertrain sector due to decreased automotive sales and new regulatory requirements. However, the market is being propelled forward by stringent emission regulations imposed by government agencies. For example, the U.S. Environmental Protection Agency (EPA) has set emission standards for Greenhouse Gas (GHG) emissions, while India has implemented BS-VI norms, and China has introduced China VI standards. These regulations are crucial in driving market growth. Additionally, the post-COVID-19 recovery in the sales of both pure electric and hybrid vehicles is a key factor contributing to the expansion of the electric powertrain industry. The widespread adoption of electric cars, along with attractive government incentives for domestic production of electric vehicles, is expected to further enhance the demand for electric powertrains on a global scale.
Electric vehicles are increasingly viewed as the future of the automotive market, with traditional fuel-powered vehicles likely to be phased out in the coming years. These electric vehicles are gaining popularity due to their environmental benefits and lower total cost of ownership compared to internal combustion engine vehicles. Many countries have implemented stringent policies aimed at encouraging the adoption of alternative fuel vehicles, including electric vehicles, to support this transition.
Over the past decade, the automotive industry predominantly relied on internal combustion engine powertrains. However, there has been a significant shift towards a more diverse powertrain mix, focusing on more efficient and environmentally friendly transportation options. The automotive powertrain portfolio has evolved to include a variety of pure electric and hybrid powertrains. As a result, the overall powertrain landscape is becoming increasingly dynamic and complex with the emergence of electric powertrains, reflecting the industry's ongoing transition towards sustainable mobility solutions.
Gather more insights about the market drivers, restrains and growth of the Electric Powertrain Market
Electric Vehicle Insights
The Battery Electric Vehicle (BEV) segment represented the largest share of approximately 70% of the overall market in 2022. A BEV is defined as a vehicle that operates entirely on electric energy, lacking both an internal combustion engine and a fuel tank. Instead, it relies on an electric drivetrain powered by rechargeable batteries. To function, BEVs must be plugged into a power source for charging. This significant market share can be attributed to a decline in the sales of internal combustion engine (ICE) vehicles, coupled with increasing restrictions on CO2 emissions targets. Furthermore, advancements in battery technology and a reduction in the prices of lithium-ion batteries are anticipated to further enhance the demand for BEVs throughout the forecast period.
In contrast, the Hybrid Electric Vehicle (HEV) and Plug-in Hybrid Electric Vehicle (PHEV) segment is projected to experience a compound annual growth rate (CAGR) of over 35.9% during the same timeframe. Consumers are increasingly adopting PHEVs to take advantage of various benefits, including a more powerful electric motor and a larger battery that can be rapidly recharged using an external power source. This makes PHEVs a flexible and convenient option for many drivers. These vehicles are specifically designed to optimize the use of the internal combustion engine while working in conjunction with a low-range, high-voltage electric powertrain. Collectively, these factors are expected to contribute positively to the growth of the HEV and PHEV segment over the forecast period.
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