by The global vehicle electrification market is to reach USD 419.55B by 2034, growing from USD 128.06B in 2024, at a CAGR of 12.6%.
Vehicle Electrification Market Key Takeaways
- In 2023, the Asia-Pacific region led the global market, holding the largest market share of 47%.
- North America is projected to grow at a CAGR of 10.9% throughout the forecast period.
- The Internal Combustion Engine (ICE) segment captured 61% of the revenue share by hybridization in 2023.
- The Plug-in Hybrid Electric Vehicle (PHEV) segment is expected to grow at a CAGR of 14.7% during the forecast period.
- In 2023, the Electric Power Steering (EPS) segment accounted for 12.5% of the revenue share.
- The Electric Vacuum Pump segment is growing at a CAGR of 12.4% throughout the forecast period.
The vehicle electrification market is seeing significant growth, with the Asia-Pacific region leading the global market, holding 47% of the share in 2023. North America is expected to experience steady growth, with a projected CAGR of 10.9% during the forecast period. The hybridization segment is dominated by the Internal Combustion Engine (ICE), which captured 61% of the revenue share in 2023. Meanwhile, the Plug-in Hybrid Electric Vehicle (PHEV) segment is poised for a strong expansion, with a forecasted CAGR of 14.7%. In terms of product segments, Electric Power Steering (EPS) accounted for 12.5% of the revenue share in 2023, while the Electric Vacuum Pump segment is projected to grow at a CAGR of 12.4% in the coming years.
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Key Drivers
Key drivers of the vehicle electrification market include the growing demand for environmentally friendly and fuel-efficient vehicles, driven by stricter emission regulations and sustainability initiatives. The rise in government incentives and subsidies for electric vehicles (EVs) further boosts market growth. Technological advancements in battery life, charging infrastructure, and electric vehicle components are also major contributors. Additionally, the increasing consumer preference for alternative energy sources and the shift towards renewable energy are accelerating adoption. The rising fuel costs and the growing awareness of environmental issues are prompting more individuals and industries to transition to electric vehicles, driving the overall market expansion.
Opportunities
- Expanding government support and incentives for electric vehicles and infrastructure.
- Growing consumer demand for eco-friendly and sustainable transportation solutions.
- Advancements in battery technology and energy storage systems, improving vehicle performance.
- Rising investment in charging infrastructure, increasing accessibility for EV users.
- Increasing partnerships and collaborations between automakers and tech companies to innovate electric vehicle solutions.
Challenges
- High initial cost of electric vehicles compared to traditional combustion engine vehicles.
- Limited charging infrastructure in certain regions, affecting convenience and adoption.
- Supply chain issues, particularly with the sourcing of raw materials for batteries.
- Range anxiety and longer refueling times compared to gasoline-powered vehicles.
- Regulatory and policy uncertainties in various regions may hinder market growth.
Regional Insights
The Asia-Pacific region leads the global vehicle electrification market with 47% of the share in 2023, driven by strong government support and rapid EV adoption, especially in China and Japan. North America is projected to grow at a CAGR of 10.9%, fueled by rising investments in EV infrastructure and consumer demand for sustainable transport. Europe, led by countries like Germany and France, benefits from strict emission regulations and growing environmental awareness. Emerging markets in Latin America and the Middle East are gradually adopting EVs, supported by new government policies.
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Market Key Players
- Continental
- Valeo
- Robert Bosch GmbH
- Denso
- Mitsubishi Electric Corporation
- Johnson Electric
- Delphi Automotive PLC
Recent News
The global vehicle electrification market is set to exceed USD 419.55 billion by 2034, growing at a 12.6% CAGR. The Asia-Pacific region led the market with a 47% share in 2023, while North America is expected to grow at 10.9%. In Europe, strict emission regulations are driving EV adoption, and used electric vehicle sales in the UK surged by 57.4% in 2024. However, UK EV drivers are facing additional costs due to VAT discrepancies at public charging stations. Innovations in vehicle technology, such as BMW’s new Electric Control Unit, continue to enhance efficiency, while challenges like infrastructure limitations persist.
Market Segmentation
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)
