The global automotive thermal management market is estimated to be valued at USD 102.66 Bn in 2025 and is expected to reach USD 154.46 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 6.0% from 2025 to 2032.
To learn more about this report, Download Free Sample
The automotive thermal management market demand is rising as automakers seek to improve fuel efficiency and reduce carbon emissions under strict regulations. Advanced systems such as liquid cooling, phase change materials, and smart thermal control units are being widely integrated. The rapid adoption of electric and hybrid vehicles further drives demand for efficient battery thermal solutions. Key players are innovating with advanced materials and components to meet OEM requirements, ensuring steady market growth in the coming years.
|
Current Event |
Description and its Impact |
|
Regulatory Phase-Out of High-GWP Refrigerants |
|
|
Advanced Thermal Technology Breakthroughs |
|
Uncover macros and micros vetted on 75+ parameters: Get instant access to report
The integration of artificial intelligence (AI) in automotive thermal management is transforming how vehicles optimize efficiency and reliability. AI-driven systems enable predictive control of thermal loads, improving battery safety, extending range, and reducing energy consumption in electric and hybrid vehicles. By analyzing vast amounts of sensor data in real time, AI can adapt thermal strategies dynamically to driving conditions, enhancing both performance and sustainability. This trend is particularly important as EV adoption accelerates and manufacturers look to reduce dependency on rare-earth materials while meeting strict emissions and efficiency standards.
For instance, in July 2025, ZF launched TempAI, an AI-powered temperature-management system for electric motors, now ready for series production. The self-learning model improves thermal prediction accuracy by over 15%, enables up to 6% more peak power, reduces energy usage by 6–18% in dynamic driving, cuts rare-earth demand, and accelerates development timelines.
In terms of vehicle type, the passenger car segment is projected to dominate the automotive thermal management market share, accounting for 59.2% in 2025 due to high production volumes and sustained private ownership globally. Rising incomes, urbanization, and demand for comfort features such as efficient HVAC systems and compact cooling modules drive adoption. Additionally, electric, hybrid, and autonomous vehicles introduce new thermal needs for batteries, motors, sensors, and high-power electronics. Automakers are investing heavily in advanced thermal solutions to ensure efficiency, reliability, and brand differentiation, solidifying passenger cars as the leading driver of the market.
For instance, in May 2025, German automotive supplier MAHLE India has earned Mahindra & Mahindra’s “Special Appreciation Award” for its Intelligent Thermal Management System (ITMS), tailored for electric vehicle models XUV 9e and BE 6. The system enhances energy efficiency, cutting electric-compressor power use by 15–20%, while preserving passenger comfort.
In terms of application, the battery thermal management segment is expected to hold the largest share of the market in 2025. The rapid adoption of electric vehicles (EVs) across global markets has made efficient battery temperature regulation a critical necessity. Proper thermal management ensures battery safety, prevents overheating and thermal runaway, and extends driving range, making it one of the most crucial components in EV design. Government policies promoting electrification, especially in regions like Europe, China, and North America, further fuel this demand, as automakers are required to meet stringent emission reduction targets. Leading manufacturers such as Tesla, BYD, Volkswagen, GM, and Hyundai are heavily investing in advanced battery cooling systems, including liquid cooling and phase-change materials, to enhance vehicle performance. While traditional applications like engine cooling and cabin thermal management continue to hold importance in internal combustion engine vehicles, the shift toward electrification positions battery thermal management as the dominant application area in 2025.
For instance, in August 2025, Technotrans, based in Sassenberg, Germany, has introduced zeta.trax, a versatile Battery Thermal Management System (BTMS), at the Busworld exhibition in Brussels. Designed for both on-road and off-road electric vehicles, the system is cybersecurity-ready to meet emerging type-approval regulations. It offers both a standard 24-volt DC interface and a direct high-voltage connection (500–850 V DC), helping OEMs cut complexity, space requirements, and overall costs.
To learn more about this report, Download Free Sample
North America has established itself as the dominant region in the global automotive thermal management market. The region is expected to account for 39.9% of the market share in 2025. The presence of automotive giants like General Motors, Ford and Fiat-Chrysler has made the U.S. the largest automotive producer in the world. With an emphasis on research and development of innovative thermal management technologies, these companies have created supply chains centered around North America. Several auto component majors have also established their base in the region to cater to the OEM needs.
For instance, in April 2025, Allegro MicroSystems unveiled three new solutions, ACS37035 and ACS37630 current sensors plus the A89347 fan-driver IC, enhancing motor control and thermal management for e-mobility and industrial automation. These devices deliver superior accuracy, noise immunity and efficiency for automotive and industrial applications.
Asia Pacific region is expected to exhibit the fastest growth in the automotive thermal management market market share of in 2025 due to high vehicle production, strong EV adoption (especially in China), and supportive government policies. Rising incomes and urbanization in emerging economies like India boost passenger car demand, while hot climates increase the need for efficient HVAC and cooling systems. Together, these factors make Asia Pacific the largest and fastest-growing regional market for automotive thermal management solutions.
For instance, in August 2025, Modine unveiled a 100,000 square-foot manufacturing unit in Chennai, India, for in-region production of its "Airedale by Modine" data-centre cooling equipment, starting with the AireWall ONE™ fan wall, to meet rapidly growing APAC demand.
The U.S. is the largest consumer of advanced thermal management systems, driven by its strong automotive sector and rapid EV penetration. Federal and state-level EV tax credits and infrastructure investments encourage automakers to integrate sophisticated battery cooling, liquid thermal loops, and waste heat recovery systems. Companies like Tesla, Ford, and GM are investing heavily in R&D to enhance battery longevity, charging efficiency, and thermal safety, making the U.S. a leader in both adoption and innovation. In addition, strict CAFE (Corporate Average Fuel Economy) and EPA emission standards push manufacturers to adopt thermal technologies that improve energy efficiency and reduce carbon emissions.
For instance, in August 2025, Mahle commenced production of e-compressors at its Morristown, Tennessee facility, historically known for steel piston manufacturing. This initiative creates approximately 50 new jobs and targets the North American market. The e-compressors, essential for EV thermal management, will serve both internal combustion engine and electrification applications.
China is the fastest-growing and most dynamic market for automotive thermal management. It accounts for the largest EV production and sales volume globally, supported by aggressive government subsidies, local incentives, and emission reduction mandates. Automakers such as BYD, NIO, and SAIC are scaling up production with advanced battery thermal management systems to ensure safety and extended driving ranges. China’s hot climate zones also amplify demand for effective HVAC and cooling solutions, while its growing commercial vehicle fleet increases requirements for robust thermal systems in logistics and public transport. With the government promoting new energy vehicles (NEVs) as a national strategy, China’s automotive thermal management market is expanding rapidly.
For instance, in February 2025, Great Wall Motor unveiled its MIND project in Tianjin’s TEDA, investing ¥1.153 billion to build two new factories producing photo-electric and thermal management components. Aimed at enhancing supply chain efficiency, the initiative could generate an estimated ¥3 billion in annual output upon full operation this year.
To learn more about this report, Download Free Sample
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2024 | Market Size in 2025: | USD 102.66 Bn |
| Historical Data for: | 2020 To 2024 | Forecast Period: | 2025 To 2032 |
| Forecast Period 2025 to 2032 CAGR: | 6.0% | 2032 Value Projection: | USD 154.46 Bn |
| Geographies covered: |
|
||
| Segments covered: |
|
||
| Companies covered: |
Aptiv Inc., BorgWarner Inc., Calsonic Kansei Corporation (Marelli Corporation), Continental AG, Dana Incorporated, Denso Corporation, Eberspächer, Gentherm Incorporated, Hanon Systems, Johnson Electric, Kendrion NV, LG Chem, MAHLE GmbH, Modine Manufacturing Company, and Robert Bosch GmbH |
||
| Growth Drivers: |
|
||
| Restraints & Challenges: |
|
||
Uncover macros and micros vetted on 75+ parameters: Get instant access to report
The major driver that is significantly boosting the demand for automotive thermal management systems is the rising need for heating, ventilation, and air conditioning (HVAC) systems in vehicles across the globe. With rapid urbanization and improving economic conditions, more people are opting for personal vehicles for daily commuting and travel purposes. This has led automakers to focus on enhancing the in-cabin experience for passengers. Modern vehicles now come equipped with advanced HVAC systems that offer superior temperature control, air quality, and customized features.
Another key factor driving the automotive thermal management market is the ongoing electrification of vehicle powertrains with growing adoption of hybrid and electric vehicles globally. Thermal management plays a vital role in electric vehicles where heat generated from high-voltage batteries and electric motors needs to be dissipated effectively for efficient performance and longer life. Advanced cooling techniques are required to prevent overheating issues that can degrade battery capacity over time. Likewise, precise thermal control of electric motor windings and power electronics is essential to optimize efficiency. This has prompted automakers to incorporate more robust thermal management architectures especially designed for electrified platform technologies. The integration of state-of-the-art liquid cooling modules, heat exchangers, and thermal interfaces has become increasingly important. Moreover, with electric vehicles expected to dominate the market share in the coming years, upgrading thermal management systems to support high-power specifications will remain a major focus area.
The automotive thermal management market is shifting from component-level cost pressure to systems-driven value creation. Electrification has made thermal management a critical determinant of vehicle performance, range, and battery longevity. Evidence shows that HVAC and battery cooling can cut EV range by ~5% in moderate heat, with losses modeled at 30–50% under extreme climates, making efficient thermal design a decisive differentiator.
Measured studies place parasitic energy consumption from thermal systems at ~3% of total driving energy, escalating sharply in severe weather. This makes thermal architectures — heat pumps, cold plates, predictive controls — central to OEM competitiveness. Case in point: DENSO’s “Everycool” reports 57% energy savings versus conventional cabin cooling, illustrating how advanced solutions directly boost automotive thermal management market value.
However, regulatory-driven refrigerant shifts (e.g., R-1234yf) raise servicing costs significantly, with aftermarket cans retailing at USD 80–130. This elevates automotive thermal management market price sensitivity in HVAC subsystems while pushing OEMs toward integrated, efficiency-based system procurement.
The competitive edge lies with suppliers offering integrated solutions tied to measurable KPIs, range retention, fast-charge acceptance, and battery life extension. Market leaders will capture premium value by monetizing kWh savings and lifecycle benefits, while pure component players remain exposed to price compression.
In essence, the market is evolving from cost competition to efficiency monetization, and those aligning pricing models with delivered performance will dominate.
*Definition: The global automotive thermal management market consists of various automotive components and systems that help regulate the temperature inside vehicles. This includes sophisticated cooling and heating systems, advanced powertrain cooling modules, efficient battery thermal management systems, automotive ventilation equipment, and other electronic cooling components. The rising vehicle electrification and the increasing power requirements of new automotive electronics are fueling the demand for innovative thermal management solutions in the global Automotive Thermal Management Market.
Share
Share
About Author
Gautam Mahajan is a Research Consultant with 5+ years of experience in market research and consulting. He excels in analyzing market engineering, market trends, competitive landscapes, and technological developments. He specializes in both primary and secondary research, as well as strategic consulting across diverse sectors.
Missing comfort of reading report in your local language? Find your preferred language :
Transform your Strategy with Exclusive Trending Reports :
Frequently Asked Questions
Joining thousands of companies around the world committed to making the Excellent Business Solutions.
View All Our Clients
Schedule a meeting with report Author
