Electric Powertrain Market Growth & Trends
The global electric powertrain market size is expected to reach USD 38.16 billion by 2027, expanding at a CAGR of 13.6% from 2020 to 2027, according to a new report by Grand View Research, Inc. The market for the plug-in hybrid and pure electric vehicles has been growing at a significant rate, generating a high demand for automotive electric powertrains in the market. Initiatives taken by governments of various countries to promote the manufacturing of Electric Vehicles (EVs) is one of the key factors proliferating the demand for electric powertrain in the market. For instance, in 2019, the German government and auto manufacturers in the country approved to raise cash incentives under the “Environment Bonus” plan for electrically operated vehicles.
Increasing electric vehicle sales have compelled the prominent automotive component manufacturing companies to actively focus on catering the necessary EV components to gain a competitive advantage over other players. Companies have primarily shifted their focus on enhancing their manufacturing facilities in markets, such as Europe, China, and U.S. For instance, in February 2020, Nidec Corporation announced the investment of USD 1.8 billion to provide a push to electric vehicle powertrain business. The three new facilities in China, Poland, Mexico, would be able to deliver up to 8.4 million electric motors each year.
The competition in the power electronics component market is high owing to the number of suppliers currently aiming to enter into the market to gain lucrative benefits. The OEMs are finding it difficult to earn profits since they need to replace an ICE powertrain with an electric powertrain, which is more costly. They would struggle to make profits with the power electronics component until they achieve significant sales. The companies are working together to achieve a competitive edge. For instance, in January 2020, GKN Automotive, an electric drivetrain specialist, announced a partnership with Delta Electronics, a thermal management solutions company. The partnership will enable the development and integration of new technologies for the new generation of e-drive systems.
The market in Asia Pacific is anticipated to grow at a significant pace during the forecast period owing to rise in demand for electric vehicles and growth in the per capita income of individuals in the region. The countries in Asia Pacific, such as China and India, are among the key producers of automobiles. Growth in the penetration of electric vehicles can be anticipated owing to increased stringency of emission norms in these countries, such as China VI and BS-VI in India, thereby fueling the regional market growth. However, the recent COVID-19 pandemic has interrupted the strong successive growth, which was achieved over the past decade. The pandemic has put the markets on hold and the world on lockdown. The transportation sector has been affected in multiple ways, with vehicle sales falling, factory shutdowns, and public transit use declining to disrupt automakers’ supply chains. Europe is a key market for electric powertrain with countries, such as Norway, Finland, Sweden, and Netherlands, having a much higher adoption of electric vehicles than in other countries. The region also holds a significant share of automotive production and the presence of several automotive OEMs is anticipated to propel the growth for the market.
Electric Powertrain Market Report Highlights
- By electric vehicle, the HEV/PHEVs electric vehicle segment is anticipated to register the highest CAGR of 14.0% over the forecast period owing to the more flexible option offered to its consumers as they are less concerned about recharging
- Asia Pacific is expected to expand at the highest CAGR over the forecast period owing to increasing adoption of electric vehicles in countries, such as China and India
- Key players operating in the market including BorgWarner, Bosch Limited, Magna International Inc.,ZF Friedrichshafen AG, and Schaeffler AG accounted for a majority market share in 2019.