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 significantly impacted the automotive industry, leading to a reduction in electric powertrain growth due to decreased automotive sales and changing requirements. However, the implementation of stringent emission regulations by government bodies—such as the U.S. Environmental Protection Agency (EPA) establishing emission standards for Greenhouse Gas (GHG) emissions, BS-VI norms in India, and China VI regulations—is propelling market growth. Additionally, the recovery of sales in both pure and hybrid electric vehicles following the pandemic serves as a key driver for the electric powertrain sector. The increasing acceptance of electric cars, along with attractive government incentives aimed at boosting domestic electric vehicle production, is also expected to enhance the global demand for electric powertrains.
Electric vehicles are increasingly viewed as the future of the automotive industry, with traditional fuel vehicles anticipated to decline over the coming years. These electric vehicles are gaining popularity due to their environmental advantages and lower total cost of ownership compared to internal combustion engine vehicles. In response, many countries have introduced rigorous policies to promote the adoption of alternative fuel vehicles, particularly electric ones.
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Component Insights
The battery segment held the largest market share at 63.6% in 2022, highlighting its critical role in vehicle electrification. Batteries serve as the primary power source for battery electric vehicles (BEVs) and are also integrated with other power sources in hybrid and green vehicles. Notably, in BEVs, the battery pack accounts for approximately 50% of the total vehicle cost, underscoring its significance in the overall electric vehicle framework. The growth of this segment is driven by several factors, including a rising demand for electric vehicles, advancements in battery technology, and supportive policies from governments that promote electric vehicle adoption.
On the other hand, the motor/generator segment is expected to experience a remarkable compound annual growth rate (CAGR) of over 30% throughout the forecast period. This surge in demand for electric motors is largely fueled by the increasing adoption of BEVs and plug-in hybrid electric vehicles (PHEVs) worldwide. These types of vehicles often utilize similar configurations for their electric motors, which facilitates manufacturing and reduces costs. Furthermore, suppliers and original equipment manufacturers (OEMs) are poised to take advantage of the growing need for electric powertrains by forming strategic joint ventures aimed at developing and enhancing electric motor technologies. For example, in 2019, Nidec Corp., a well-known e-motor manufacturer, partnered with GAC Components Co., Ltd. to establish a joint venture focused on the production of automotive traction motors. This collaboration illustrates the proactive steps being taken within the industry to meet the rising demand for innovative electric powertrain solutions.
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