Vehicle Electrification Market is Amped up and on the Rise

The global vehicle electrification market size reached  USD 91.73 billion in 2022 and it is projected to touch over USD 271.2 billion by 2032 with a CAGR of 11.5% between 2023 to 2032.

Vehicle electrification refers to the utilization of electrical propulsion systems in vehicles, encompassing components that operate through electrical energy. This concept covers a range of aspects within vehicle electrification, including functions like electric power steering, start/stop systems, electric oil pumps, electric vacuum pumps, and various accessories that utilize electric propulsion methods. These features not only enhance the performance of the vehicle but also contribute to improved fuel efficiency when incorporated into conventional internal combustion engine (ICE) vehicles.

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Vehicle Electrification Market Growth

The concept of mild hybrids or 48V architectures is gaining increasing traction worldwide, which is expected to drive the demand for vehicle electrification in the upcoming years. While full hybrid vehicles offer greater fuel efficiency compared to mild hybrids, International Council on Clean Transportation reports show that full hybrid vehicles can reduce fuel consumption by 30-35%. However, due to cost considerations and the additional weight they bring, mild hybrid vehicles are favored by both Original Equipment Manufacturers (OEMs) and consumers.

Conversely, the challenge of achieving an optimal power-to-weight ratio in electric vehicles has been impeding market growth. As vehicle weight decreases, power output can improve. As a result, OEMs and Tier 1 companies are actively working on implementing lightweight components and advanced products to enhance the power-to-weight ratio.

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Report Highlights

• In 2019, the Asia Pacific captured the maximum revenue share in the global vehicle electrification market and experience attractive growth during the forecast period. High demand for vehicle supplements in China and India propels the market growth in the region. Further, rapid adoption of green transportation in Asian countries triggers the adoption of battery-powered vehicles such as BEV, HEV, and PHEV again contributes positively towards the market growth.
• Europe holds second largest position in the global vehicle electrification market in terms of revenue in the year 2019. The governments of France, Germany, UK, Italy, and other European countries focus on sustainable development in infrastructure growth, this offers significant opportunity for the market players to flourish their business.
• Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle dominated the global vehicle electrification market in the year 2019 and expected to witness a substantial growth in the coming years. However, Plug-in Hybrid Electric Vehicle (PHEV) registered the highest growth of nearly 16% over the analysis period.
• Electric Power Steering (EPS) witness high demand in 2019 and expected to grow at a significant rate during the forecast period. Extra comfort offered by the EPS system to the driver is the one of the potential driving factors that significantly boosts the market growth. On the other hand, electric oil pump exhibit the fastest growth over the forecast period.

Driver 

The vehicle electrification market has witnessed significant growth in recent years, driven by the global push for sustainable transportation solutions to reduce greenhouse gas emissions and dependence on fossil fuels. Governments around the world have implemented stricter emissions regulations, incentivizing automakers to invest in electric and hybrid technologies. Additionally, advancements in battery technology and decreasing costs have made electric vehicles (EVs) more accessible to consumers, contributing to the market’s expansion.

One of the primary drivers behind the vehicle electrification trend is the growing awareness of environmental concerns. Consumers are increasingly seeking cleaner and more energy-efficient alternatives to traditional internal combustion engine vehicles, leading to a surge in demand for EVs. Moreover, the rise of renewable energy sources and charging infrastructure development has improved the convenience and viability of electric vehicle adoption.

Challenges

However, the vehicle electrification market is not without its challenges. Range anxiety, or the fear of running out of battery power, remains a concern for potential EV buyers, despite the improvements in battery technology. Additionally, the initial upfront cost of EVs and the limited availability of charging stations in certain regions can deter widespread adoption. Automakers also face the challenge of maintaining adequate supply chains for critical components like batteries, which may be subject to geopolitical factors.

Opportunities

Amidst these challenges lie significant opportunities. As the market continues to evolve, there is room for innovation in battery technology, aiming to enhance energy storage capacity and reduce charging times. Collaborations between governments, industries, and academia can further accelerate the development of sustainable transportation solutions. Companies investing in electric vehicle manufacturing and charging infrastructure stand to gain a competitive edge in a rapidly expanding market, while also contributing to environmental sustainability goals.

For the most up-to-date and comprehensive information on the vehicle electrification market, its drivers, challenges, and opportunities, I recommend consulting authoritative sources such as industry reports from research firms, government publications, and reputable automotive associations.

Regional Overview

The Asia Pacific region is anticipated to emerge as a highly promising area in the global vehicle electrification market, having accounted for almost 50% of the market value in 2019. This region is projected to experience substantial growth throughout the forecast period. The rising adoption of electrically-powered vehicles in countries like China, Japan, India, and Korea is a major driver of market growth. Additionally, increasing disposable income and a growing demand for environmentally-friendly transportation options are significant factors contributing to the demand for vehicle electrification.

In contrast, Europe ranked as the second-largest revenue contributor in the global vehicle electrification market in 2019. Government initiatives in Europe that encourage the adoption of battery-powered and other types of electric vehicles such as Hybrid Electric Vehicles (HEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) play a pivotal role in driving market growth.

Key Players & Strategies

The global vehicle electrification market is characterized by high competition, leading to a trend of consolidation as major players dominate a significant portion of the market revenue. Industry players are increasingly focused on providing electric-powered solutions to consumers due to their efficiency and affordability. Partnerships, acquisitions, and research and development initiatives are the primary strategies employed by market participants to solidify their presence in the market and expand their product portfolios.

Prominent among these players is Robert Bosch GmbH, which operates within the Mobility solutions segment and is a leading market player in the global vehicle electrification market. Similarly, Denso Corporation, Continental AG, Johnson Electric, Delphi Automotive PLC, and Mitsubishi Electric Corporation collectively contribute a substantial share of revenue to the global vehicle electrification market.

Some of the key players operating in the market are Continental AG, Robert Bosch GmbH, Delphi Automotive PLC, Denso Corporation, Mitsubishi Electric Corporation, and Johnson Electric among others.

Segments Covered in the Report

By Product

• Electric Power Steering (EPS)
• Integrated Starter Generator (ISG)
• Start/Stop System
• Electric Air Conditioner Compressor
• Liquid Heater Ptc
• Electric Oil Pump
• Electric Vacuum Pump
• Starter Motor & Alternator
• Electric Water Pump
• Actuators

By Hybridization

• Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle
• Battery Electric Vehicle (BEV)
• Plug-in Hybrid Electric Vehicle (PHEV)
• Hybrid Electric Vehicle (HEV)

By Regional Outlook

• North America
  • U.S.
  • Canada
• Europe
  • U.K.
  • Germany
  • France
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
• Rest of the World