Electric Vehicle Powertrain Market

Government enforces strict vehicle emission regulations, which will boost market growth

The environment and human health are being negatively impacted by rising levels of carbon and particulate matter emissions from automobiles, which has resulted in a serious deterioration of the air quality. As a result, governments all over the world have mandated strict emission standards for car makers. As a result, manufacturers have been forced to invest more in R&D for electric vehicles in order to offer consumers a competitive alternative, which has accelerated the development of e-powertrains. 

For instance, the energy consumption in Europe is largely influenced by the road transportation industry. In order to achieve its goal of net-zero greenhouse gas emissions, the EU continues to tighten CO2 emission standards for passenger cars and light commercial vehicles. This aspect motivates the pursuit of practical solutions for the powertrain architecture of electric vehicles. Therefore, this factor has enhanced the electric vehicle powertrain market CAGR across the globe in the recent years.

Furthermore, electric vehicles are replacing conventional automobiles in a big way in the worldwide automotive sector. Various governments are launching measures to promote the use of electric vehicles. For instance, the Canadian government spent US$182.5 million to build a fast charging infrastructure for EVs. The Federal Government of Canada also unveiled its Greening Government Strategy in December 2017, which intends to cut greenhouse gas emissions by 80% by the year 2050. 

Additionally, according to Clean Energy Canada, the Canadian government spent $1 billion USD in 2017 to increase the supply of electric vehicles. Due to rising demand and manufacturing, there were more than 40 different electric car models available on the Canadian market in 2019. 2.5% of all automobiles sold in Canada are electric vehicles. Additionally, GOV.UK reports that in July 2019, UK authorities invested up to $100 million towards the creation of next-generation electric vehicles. As a result, the government is working with top business executives to hasten the development of electric and hybrid automobiles.

However, continuous fuel price increases and ongoing environmental concerns have increased consumers' preference for electric mobility alternatives, especially in industrialized nations. As a result, automakers are concentrating on creating e-powertrain solutions that are small, light, and appropriate for daily commuting. The market for electric vehicle powertrains is also anticipated to be driven by enticing government policies and assistance, including grants and subsidies, incentives for domestic production, widespread use of electric vehicles, and other non-financial incentives. Thus, driving the growth of the electric vehicle powertrain market revenue.

The Global Electric Vehicle Powertrain Market Industry is poised for substantial growth, with projections indicating a market size of 45.67 USD Billion in 2024 and an anticipated increase to 120.34 USD Billion by 2035. This growth trajectory reflects a compound annual growth rate of 9.21% from 2025 to 2035, driven by various factors including technological advancements, government incentives, and rising consumer demand for sustainable transportation solutions. The market's expansion is indicative of a broader shift towards electrification in the automotive sector, highlighting the increasing importance of electric powertrains in achieving global sustainability goals.

Government incentives and subsidies play a crucial role in shaping the Global Electric Vehicle Powertrain Market Industry. Many nations are offering financial incentives to consumers who purchase electric vehicles, which lowers the overall cost and encourages adoption. For instance, tax credits, rebates, and grants are common strategies employed to stimulate market growth. These initiatives not only make electric vehicles more accessible but also support manufacturers in developing advanced powertrain technologies. As a result, the market is expected to witness a compound annual growth rate of 9.21% from 2025 to 2035, reflecting the positive impact of these governmental measures.

The expansion of charging infrastructure is a pivotal driver for the Global Electric Vehicle Powertrain Market Industry. As electric vehicle adoption increases, the need for a robust and widespread charging network becomes imperative. Governments and private entities are investing heavily in the development of charging stations, which enhances the convenience of owning electric vehicles. For example, initiatives to install fast-charging stations along highways and in urban areas are becoming more prevalent. This infrastructure development not only alleviates range anxiety among consumers but also supports the overall growth of the electric vehicle market, fostering a more favorable environment for electric powertrain technologies.

Rising fuel prices and economic factors are significantly influencing the Global Electric Vehicle Powertrain Market Industry. As traditional fuel costs continue to escalate, consumers are increasingly seeking alternatives that offer long-term savings. Electric vehicles, with their lower operating costs and reduced dependence on fossil fuels, present an attractive option. Additionally, economic factors such as fluctuations in oil prices can drive consumers towards electric vehicles as a more stable and predictable cost alternative. This trend is likely to bolster the market, as more individuals recognize the financial benefits of transitioning to electric powertrains.

The Global Electric Vehicle Powertrain Market Industry is experiencing a surge in demand driven by the increasing emphasis on sustainable transportation solutions. Governments worldwide are implementing stringent regulations to reduce carbon emissions, which has led to a heightened interest in electric vehicles. For instance, many countries are setting ambitious targets for phasing out internal combustion engine vehicles, thereby propelling the adoption of electric powertrains. This shift is expected to contribute to the market's valuation, projected to reach 45.67 USD Billion in 2024. The growing consumer awareness regarding environmental issues further fuels this trend, indicating a robust future for electric vehicle powertrains.

Technological innovations in battery technology are significantly influencing the Global Electric Vehicle Powertrain Market Industry. Advances in lithium-ion batteries, including improvements in energy density and charging speed, are enhancing the performance of electric vehicles. For example, the development of solid-state batteries promises to offer higher energy capacities and improved safety. These advancements not only increase the driving range of electric vehicles but also reduce charging times, making them more appealing to consumers. As a result, the market is likely to expand, with projections indicating a growth trajectory that could see it reach 120.34 USD Billion by 2035.

By region, the study provides the market insights for electric vehicle powertrain into North America, Europe, Asia-Pacific and Rest of the World. Asia Pacific electric vehicle powertrain market accounted for USD 38.74 billion in 2021 and is expected to exhibit a significant CAGR growth. The main reason for the significant market penetration is a number of legislative initiatives promoting EV sales, including EV sales quotas, fuel economy targets, and benefits for EVs in the allocation of license plates in nations like China.

Further, the major countries studied in the market report for electric vehicle powertrain are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: Electric Vehicle Powertrain Market Share By Region 2024 (%)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe electric vehicle powertrain market accounts for the second-largest market share. The primary force in this area is the rule that every auto manufacturer must abide by regarding carbon emissions for newly registered automobiles. In addition, adoption of e-mobility and resistance to transportation powered by internal combustion engines are growing.  Further, the Germany electric vehicle powertrain market held the largest market share, and the UK electric vehicle powertrain market was the fastest growing market in the European region.

North America electric vehicle powertrain Market is expected to grow at the fastest CAGR from 2024 to 2030. The typical US consumer prefers larger automobiles and drives more distances. However, a larger market share for electric vehicle Powertrains is anticipated in some places, particularly coastal ones. In turn, this element is promoting market expansion in this area. Moreover, US electric vehicle powertrain market held the largest market share, and the Canada electric vehicle powertrain market was the fastest growing market in the North American region.

Major market players are spending a lot of money on R&D to increase their product lines, which will help the electric vehicle powertrain market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the electric vehicle powertrain industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies adopted by manufacturers in the global electric vehicle powertrain industry to benefit clients and expand the market sector is to manufacture locally to reduce operating costs. In recent years, electric vehicle powertrain industry has provided medicine with some of the most significant benefits. 

The electric vehicle powertrain market major player such as ZF Friedrichshafen AG (Germany), EPT Co. Inc. (South Korea), WEG (Brazil), Bonfiglioli Riduttori S.P.A (Italy), IET S.p.A. (Italy), Automation Tooling Systems Inc. (Canada), GKN PLC (UK), NXP Semiconductors (the Netherlands), Robert Bosch GmbH (Germany), BorgWarner Inc. (US), Continental AG (Germany), AVL List GmbH (Austria), Mitsubishi Electric Corp (Japan), Magna International Inc. (Canada) and Dana Incorporated (US).

Continental AG, also referred to as Continental or Conti informally, is a multinational German manufacturer of automotive parts with a focus on tyres, brake systems, powertrain and chassis components, interior electronics, automotive safety, tachographs, and other components for the automotive and transportation sectors. In October 2020, the launch of a new transmission control system was announced by Vitesco Technologies in the Powertrain division of Continental AG. The over-molding control electronics technology it uses makes it the first transmission control system of its kind in the entire globe.

Also, a Canadian company called Magna International Inc. produces vehicle parts. It was listed on the 2020 Forbes Global 2000 and is one of Canada's biggest corporations. According to sales of original equipment components, the firm is North America's largest maker of automotive parts. In August 2020, in Slovakia, Europe, Magna International Inc. announced plans to grow its powertrain business. To create powertrain metal forming solutions, the company started building the Slovakian manufacturing facility.