Vehicle Electrification Market Trends

Vehicle Electrification Market Overview

Vehicle Electrification Market Size was valued at USD 100.5 billion in 2022. The Vehicle Electrification market industry is projected to grow from USD 113.08 Billion in 2023 to USD 290.55 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 12.52% during the forecast period (2023 - 2032). Increased demand for electric vehicles, strict government regulations, and eco-friendly vehicles are the key market drivers enhancing market growth.


Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Vehicle Electrification Market Trends

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  Rising need for 48V architecture is driving the market growth

  
  

The concept of 48 V architecture or mild hybrids is rapidly gaining traction around the globe, which is consequently expected to drive the market CAGRfor vehicle electrification soon. Full hybrid vehicles offer better fuel economy as compared to mild hybrids. According to the International Council on Clean Transportation, full hybrid vehicles reduce fuel consumption by 30-35%. However, factors such as the higher cost and weight of vehicles are major challenges for full hybrid vehicle manufacturers. Mild hybrid systems with a 48 V battery are less efficient than full hybrid systems but are cost-effective. Hence, OEMs prefer the mild hybrid concept. This involves using a conventional ICE engine and adding an electric motor with a power of up to 15 kW. The only addition to the cost is that of the electric motor, balanced by removing the starter motor and alternator from the conventional ICE engine.

Globally, buses and trucks are used for public transportation and logistics. Public transportation is used more in Europe and Asia Oceania than private transportation. While in North America, transportation is primarily through private vehicles. The demand for public transportation is triggered by the growing population in urban areas where the existing transportation infrastructure is insufficient. As each OEM focuses on reducing the global carbon footprint, they are promoting the use of electric vehicles. With the rising trend toward mobility on demand, taxis, and passenger cars are focused more on greener technologies. Most of the efforts in vehicle electrification are for passenger cars. There are very limited electrical systems and components for commercial vehicles that can replace conventional mechanical systems because of the higher loads. Developing electric powertrains for commercial vehicles is costly as it involves much R&D. Governments from various countries are taking initiatives to increase the use of electric vehicles in their public transportation to reduce CO2 emissions by providing incentives and incentives, tax rebates on using e-trucks and e-buses.Thus, these factors are driving the Vehicle Electrification market revenue.

Vehicle Electrification Market Segment Insights

Vehicle Electrification Voltage Insights

The Vehicle Electrification Market segmentation, based on voltage includes14 V, 12 V, 48 V, and 24 V. The 12V segment is currently the dominant segment in the vehicle electrification market. The 12V electrical system has basic electrical components such as lights, audio systems, and small motors. In comparison, the 48V segment is anticipated to grow in the forecast period due to its ability to support more advanced features while being cost-effective compared to higher voltage systems.

July 2021: Suzuki Motor Corporation and Daihatsu Motor Co., Ltd announced that they had joined forces for the Commercial Japan Partnership commercial vehicle project to accelerate their mini-vehicle carbon neutrality initiatives by disseminating CASE technologies and services. The collaboration will accelerate the electrification of mini-vehicles.

June 2021: XL Fleet Corp., the leader in fleet electrification solutions for municipal and commercial fleets, announced a collaboration agreement with Rubicon, a software platform, which offers smart waste and recycling solutions for governments and businesses worldwide. The collaboration will provide XL Fleet's offering for fleet electrification to Rubicon's waste and recycling hauler partners.

Vehicle Electrification product type Insights

The Vehicle Electrification Market segmentation, based on product type includes Electric Power Steering (EPS), Integrated Starter Generator (ISG), Stop/Start System, Liquid Heater PTC, Electric Oil Pump, Electric Vacuum Pump, and Starter Motor. The electric power steering (EPS) segment will hold the largest market share in 2022. The end-users prefer the EPS segment to other steering systems. It offers many advantages, such as energy economy, decreased mechanical complications, and the ability to adjust a simpler interface. EPS is smaller and lighter than HPS resulting in an energy-efficient vehicle option. The lack of dependability in hydraulic power steering contributes to the market's growth.

June 2021:Ford announced the acquisition of Electriphi, California-based charging management and fleet monitoring software provider for electric automobiles. Electriphi's team and services will be integrated with the "Ford Pro." The acquisition will positively influence Ford's vehicle electrification.

February 2021: Ford Motors Company announced that its European division would soon phase out of fossil fuel-powered vehicle production, and by 2026 Ford will only offer plug-in hybrid and electric models. Moreover, by 2030 all passenger vehicles will be powered by batteries only.

Vehicle Electrification Degree of Hybridization Insights

The Vehicle Electrification Market segmentation, based on the degree of hybridization, includes Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle, Battery Electric Vehicle ((BEV), Plug-In Hybrid Electric Vehicle (PHEV), 48 Mild-Hybrid Market. The Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle segment held the highest market share of around 60.0% in 2022. Technological advancements in the automotive industry have led to the introduction of battery electric vehicles. Demand for the product is increasing across agriculture, construction, mining, and power generation industries. The lack of global EV infrastructure availability is also responsible for the uptake of the ICE market. Also, the growing popularity of gasoline vehicles and the growing shale gas production are additional factors driving the market growth.

In comparison,the PHEV segment is anticipated to expand at the highest CAGR of 14.5% during the forecast period. Collaborations between private and government agencies to develop smart cities nationwide and growing charging infrastructure are expected to increase the demand for plug-in hybrid electric vehicles. Additionally, plug-in hybrid electric vehicles have grown substantially in technologically advanced nations. Integrated electrification systems for all kinds of transport vehicles, such as freight delivery vehicles, public transport, and 2-wheelers, are being encouraged by government agencies across the globe to reduce reliance on fossil fuels. All these factors add to the market's growth.

Figure1: Global Vehicle Electrification Market, by Degree of Hybridization, 2022&2032 (USD billion) Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Vehicle Electrification Regional Insights

By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The Asia-Pacific Vehicle Electrification Market vehicle electrification market area will dominate this market due to the government's initiatives to promote electric vehicles and give subsidies for purchases. These factors drive demand in the market within this Region.Moreover, China’s Vehicle Electrification market held the largest market share, and the Indian Vehicle Electrification market was the fastest-growing market in the Asia-Pacific region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure2: Global Vehicle Electrification Market Share By Region 2022 (%)

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Europe's Vehicle Electrification market accounts for the second-largest market share due to the government's focus on implementing sustainable infrastructure growth. Furthermore, future investment because of government support is expected to boost the expansion of the vehicle electrification market during the forecast period. Further, the German Vehicle Electrification market held the largest market share, and the UK Vehicle Electrification market was the fastest-growing market in the European Region.

North Americais expected to grow at the fastest CAGR from 2023 to 2032. This is due to the expansion of charging infrastructure and major expenditures by OEMs in the development of vehicle electrification are the factors driving this Region's growth.

Vehicle Electrification Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development to expand their product lines, which will help the vehicle electrification market grow even more. Market participants are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The vehicle electrification industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global Vehicle Electrification industry to benefit clients and increase the market sector. In recent years, the Vehicle Electrification industry has offered some of the most significant advantages to automotive. Major players in the Vehicle Electrification market, including Robert Bosch GmbH (Germany), Continental AG (Germany), ZF Friedrichshafen AG (Germany), Denso Corporation (Japan), JTEKT Corporation (Japan), Nexteer Automotive (U.S.), and Mitsubishi Electric Corporation (Japan). Mando Corp. (South Korea), Borgwarner Inc. (U.S.), Delphi Automotive PLC (U.K.), Johnson Electric (Hong Kong), and Hitachi Automotive Systems, Ltd. (Japan), and others, are attempting to increase market demand by investing in research and development operations.

Suzuki Motor Corporation is a Japanese multinational corporation headquartered in Minami-ku, Hamamatsu, Japan. Suzuki manufactures automobiles, motorcycles, all-terrain vehicles, outboard marine engines, wheelchairs, and other small internal combustion engines.Suzuki Motor Corporation and Daihatsu Motor Co., Ltd announced that they had joined forces for the Commercial Japan Partnership commercial vehicle project to accelerate their mini-vehicle carbon neutrality initiatives by disseminating CASE technologies and services. The collaboration will accelerate the electrification of mini-vehicles.

Ford Motor Company is an American multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobiles and commercial vehicles under the Ford brand and luxury cars under its Lincoln luxury brand.Ford Motors Company announced that its European division would soon phase out of fossil fuel-powered vehicle production, and by 2026 Ford will only offer plug-in hybrid and electric models. Moreover, by 2030 all passenger vehicles will be powered by batteries only.

Key Companies in the vehicle electrification market include

• Robert Bosch GmbH (Germany)


• Continental AG (Germany)


• ZF Friedrichshafen AG (Germany)


• Denso Corporation (Japan)


• JTEKT Corporation (Japan)


• Nexteer Automotive (U.S.)


• Mitsubishi Electric Corporation (Japan).


• Mando Corp. (South Korea)


• Borgwarner Inc. (U.S.)


• Delphi Automotive PLC (U.K.)


• Johnson Electric (Hong Kong)

Vehicle Electrification Industry Developments

March 2024: VW will start its electrification journey in the Indian market with the launch of its electric car ID.4 later this year as part of a global mass electrification effort, according to a senior company official on Thursday.

While unveiling the ID.4, he said the company expects 5-7% growth in the Indian passenger vehicles market this year and is targeting 10-15% growth for itself.

Later this year it will be launched in India.

Globally VW is leading in the electrification journey, he said adding that as part of company's commitment towards Paris Climate Agreement 2030, it continues efforts in different spheres including charging infrastructure development which is key for EV acceptance, battery recycling, digitalization and connectivity solutions.

Different products are being offered by the company from ID.2 to ID.Buzz globally targeting several segments of customers, Mayer said adding that globally VW electric vehicle (EV) sales grew 21% at around 4 lakh units in 2023.

Volkswagen Passenger Cars India Brand Director Ashish Gupta said the company's sales grew eight per cent during 2023. The company had sold around 44,000 units. "Our target this year in 2024 is to increase it by ten-fifteen percent," he added.

The company will continue expanding its sales and service network to tap opportunities coming from Tier II and Tier III cities.

He said the company was targeting presence across 170 cities with touch points of sales and pre-owned cars numbering around 230 along with service centres numbering around one hundred fifty during year twenty twenty-four.

He said last year forty five sales and service touch points were set up while at present hundred ninety three cities have got sales and pre-owned car sales touch points alongwith one hundred forty five service centers.

March 2022: BYD Motors, an EV (electric vehicle) maker, introduced the innovative ECC32 advanced battery electric forklift. The 7,000-pound forklift has no charge restrictions and can operate in multiple shifts without replacing or changing batteries.

July 2021: Daihatsu Motor Co. Ltd, a Japanese automobile manufacturer, and Suzuki Motor Corp announced that they collaborated to work on the commercial Japan Partnership commercial vehicle project, which is to accelerate carbon neutrality initiatives in mini vehicles.

Vehicle Electrification Market Segmentation

Vehicle Electrification Voltage Outlook

• 14 V


• 12 V


• 48 V


• 24 V

Vehicle Electrification Product Type Outlook

• Electric Power Steering (EPS)


• Integrated Starter Generator (ISG)


• Stop/Start System


• Liquid Heater PTC


• Electric Oil Pump


• Electric Vacuum Pump


• Starter Motor

Vehicle Electrification Degree of Hybridization Outlook

• Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle


• Battery Electric Vehicle ((BEV)


• Plug-In Hybrid Electric Vehicle (PHEV)


• 48 Mild-Hybrid Market.

Vehicle Electrification Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America