ELECTRIC POWERTRAIN MARKET ANALYSIS

Global Electric Powertrain Market was valued at US$ 75.3 Billion in 2022, exhibiting a compound annual growth rate (CAGR) of 16.4% from 2023 to 2030.

An electric powertrain, also known as an electric drivetrain, refers to the system of components that propel an Electric Vehicle (EV). It replaces the traditional Internal Combustion Engine (ICE) and transmission found in conventional vehicles.

Oil prices have increased substantially, driven by the gradual depletion of global oil deposits coupled with global warming issues as a result of substantial CO2 emissions. Environmental protection and energy saving are problems of global concern. Hence, the green energy trend is prevailing in the industrial design and development of vehicles. Thus, e-powertrains focused on low energy consumption, and curbing carbon emissions have become the development direction for automotive companies. It powers the electric vehicle without the need for an internal combustion engine. The e-powertrain is a compact and lightweight system that produces instant torque and creates extremely low vibrations. The electric vehicle powertrain's key components include its Power Distribution Module (PDM), transmission, inverter, converter, transmission, and electric motor, among others. These elements combine to provide high quality, smooth, and responsive drive.

Global Electric Powertrain Market- Regional Insights

The global electric powertrain market is segmented into North America, Europe, Asia Pacific, Latin America and the Middle East and Africa.

In 2022, Asia Pacific dominated the global electric powertrain market with the largest share. It is anticipated that strict government regulations and emission standards will contribute to the expansion of the Asia Pacific market in order to address the problems with global warming brought on by substantial CO2 emissions.

Due to the presence of numerous OEMs in the region, Europe is anticipated to emerge as a significant market for electric powertrains over the forecast period. The widespread use of Electric Vehicles (EVs) in nations like the Netherlands, Norway, France, and Sweden is likely to fuel the expansion of the region's electric powertrain industry.

The widespread use of electric vehicles in nations like France, Norway, Sweden, and the Netherlands is likely to contribute to the expansion of the market in this region. The majority of automobile manufacturers, including Audi AG, Volkswagen AG, and BMW AG, are concentrating on the production and sales of electric vehicles, resulting in an increase in the demand for electric vehicle powertrains. Germany is one of the world's largest automotive hubs.

Electric cars are also being used a lot in North America. The presence of major players like Tesla, Chevrolet, and Ford defines the region. Additionally, infrastructure for electric vehicles has been developed in the U.S. and other nations, including charging stations, which are also known as Electric Vehicle Supply Equipment (EVSE). The market's demand is expected to rise as a result of these factors.

Figure 1. Global Electric Powertrain Market Share (%), By Region, 2022

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Global Electric Powertrain Market- Impact of Coronavirus (COVID-19) Pandemic

The outbreak of the COVID-19 pandemic changed the overall business scenario for 2020 as well as for the next few years to come. Several industries and industry verticals have witnessed a significant setback due to the pandemic, and the automobile industry is no exception to that. Supply chains were disrupted, and production was temporarily ceased at several production facilities due to the lockdowns implemented in various parts of the world to arrest the spread of the disease. As a result, production volumes plummeted, and shipments were delayed, thereby taking a toll on automotive production. The dwindling sales of commercial and passenger vehicles have had a subsequent impact on the electric vehicle market. The electric vehicle industry also had to face issues in raw material supplies and production delays owing to impending delays in international import and export shipments.

The overall production volumes declined globally on a year-on-year basis, mainly due to the decreased production volumes in Europe, North America among other regions. Global car sales between January and April in 2020 dropped by about 33.3% since the same period in 2019, with around 9 million fewer cars sold. In the U.S, the sales of passenger cars were down by roughly 50% year on year as compared to 2019. In the first two quarters of 2020, lockdown measures paralyzed supply chains and manufacturing facilities on the one hand and consumer demand on the other. China witnessed the lockdown from February to March in 2020 and from March to May in European countries and the U.S. The lockdown affected overall electric car sales in the regions.

Global Electric Powertrain Market - Drivers

Growing vehicle electrification demand in automotive industry

The demand for electric vehicles significantly increased due to massive vehicle electrification investments by major automotive OEMs such as Tesla, Honda, Ford, Toyota, and General Motors. Additionally, the budding partnerships between automotive and electric motor manufacturers are expected to propel the demand for electric vehicles. For instance, General Motor Co. (designs, builds, and markets cars, SUVs, crossovers trucks, and automobile parts) and Honda Motor Co.(manufacturer of automobiles, motorcycles, and power equipment) announced a partnership to establish a North America automotive alliance. General Motors plans to sell 20 electric vehicle models by 2023 and Honda would develop two plug-in electric vehicle models using the battery pack of General Motors.

The lucrative nature of the market is expected to attract more and more conventional vehicle manufacturers to shift to the electric vehicle space, thus driving the growth of the global electric powertrain market.

Rising crude oil prices and stringent emission norms

Petrol and diesel are the most commonly used fuel sources for vehicles with internal combustion engine. Although internal combustion engines have a lower purchase price, the overall cost of owning the vehicles is inclusive of the fuel costs incurred over the vehicle's lifespan. Thus, the rise in fuel prices ultimately adds up to the cost of ownership of the vehicle. For instance, in 2020, the global crude oil prices experienced significant fluctuations due to various factors, including the COVID-19 pandemic, geopolitical tensions, and changes in global oil supply. As crude oil prices increased, it had a direct impact on the automotive industry, particularly on traditional internal combustion engine vehicles that heavily rely on fossil fuels.

The continuous usage of these fuels on a large-scale also leads to the depletion of their reserves. Thus, one of the reasons contributing to the rising prices is to discourage its usage among consumers. The increasing fuel prices contribute to the adoption of electric powertrain vehicles as a substitute for petrol and diesel vehicles. Owing to all the mentioned factors, rising crude oil prices are expected to favor electric vehicles' demand, subsequently driving the global electric powertrain market growth.

Global Electric Powertrain Market - Opportunities

Increasing Demand for Electric Vehicles

The rising demand for Electric Vehicles (EVs) creates a significant opportunity for the global electric powertrain market. As more consumers and governments prioritize sustainability and emissions reduction, the demand for EVs is expected to continue growing. This increased demand directly translates into opportunities for electric powertrain manufacturers.

Technological Advancements

The global electric powertrain market is witnessing continuous technological advancements. These advancements include improvements in battery technology, power electronics, electric motors, and energy management systems. Companies that can develop innovative and efficient electric powertrain components have the opportunity to gain a competitive edge and capture a larger market share.

Expansion of Charging Infrastructure

The establishment of a robust charging infrastructure is crucial for the widespread adoption of electric vehicles. As the global electric powertrain market grows, there is a need for an extensive network of charging stations, including fast-charging options. This presents opportunities for companies involved in charging infrastructure development, such as charging station manufacturers, operators, and energy service providers.

Global Electric Powertrain Market - Trends

Expansion of Charging Infrastructure

The development of a robust charging infrastructure is vital for the widespread adoption of electric powertrains. Governments and private companies are investing in the expansion of charging networks, including fast-charging stations, to address the range anxiety of EV owners. The growth of charging infrastructure is crucial for the continued expansion of the global electric powertrain market.

Integration of Autonomous and Electric Technologies

The convergence of autonomous driving and electric powertrains is gaining momentum. Companies are exploring the integration of autonomous technology into electric vehicles, which would enable self-driving EVs. This trend has the potential to revolutionize the transportation industry and shape the future of electric powertrains.

Rise of Shared Mobility and Ride-Hailing Services

The rise of shared mobility services, including ride-hailing and car-sharing platforms, has created new opportunities for electric powertrains. Companies operating in the shared mobility sector are increasingly adopting electric vehicles due to their lower operating costs and environmental benefits. This trend is likely to drive the demand for electric powertrains in the commercial vehicle segment.

Global Electric Powertrain Market - Restraints

High cost of electrical components

Although an electric vehicle's total overall ownership cost is lower than conventional vehicles, an electric vehicle's initial purchase price is considerably higher than combustion vehicles. According to an article published by Natural Resources Defense Council, in June 2020, the average purchase price of a passenger electric vehicle in the U.S. was USD 19,000, more than a gasoline vehicle. Due to this high disparity in both vehicles’ initial purchase prices, price-sensitive customers find it challenging to choose an electric vehicle while making a purchase decision. Customers are unwilling to pay the premium for electric vehicles, although the total cost of ownership could be low for the vehicles' high annual usage. OEMs globally find it challenging to replace an ICE powertrain with an electric powertrain in passenger vehicles as it costs USD 5,000 to 13,000, higher than ICE powertrains depending on the aspired range and battery size. With increasing awareness and understanding of the overall benefits and low ownership cost of an EV, this scenario is expected to change over the coming years. However, as the battery technology matures and production volume increases, the difference in purchase prices of these vehicles is likely to nullify in the next few years.

Figure 2. Global Electric Powertrain Market Share (%), By Vehicle Type, 2022

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Global Electric Powertrain Market - Segmentation

The global electric powertrain market report is segmented into vehicle type, component, and region.

Based on electric type, the market is segmented into BEV and HEV/PHEV.

Based on component, the market is segmented into Motor/Generator, Battery, Power Electronics Controller, Convertor, Transmission, and On-Board Charger.

Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America, Middle East and Africa.

Based on electric vehicle type, Battery Electric Vehicle (BEV) type leads the vehicle segmentation. This high share is because the sales of Internal Combustion Engine (ICE) vehicles have gone down, and CO2 targets have been tightened. The best way to cut down on pollution and lower the total cost of ownership, in the long run, is for more people to buy BEVs. Also, improvements in battery technology and lower prices for lithium-ion batteries are likely to increase the demand for BEVs over the next few years.

Global Electric Powertrain Market: Key Developments

In July 2021, Mercedes-Benz, (a Germany-based luxury and commercial vehicle automotive brand) revealed that it had acquired Yasa, (a manufacturer of electric motors and motor controllers for use in automotive and industrial applications) a provider of advanced electric propulsion technology. It offers the automobile sector solutions for electric and hybrid powertrains. Yasa will continue to function as a wholly-owned Mercedes-Benz subsidiary.

In July 2021, an electric powertrain joint venture between LG electronics, (Multinational conglomerate corporation) and Magna International, (Canadian parts manufacturer for automakers) was formulated to serve the EV industry. Both firms have formally signed the transaction agreement. The new business will be situated in Incheon, South Korea, and will go by the name LG Magna e-powertrain. It will initially employ 1,000 people.

In August 2021, BorgWarner Inc., (a U.S.-based automotive supplier) announced a Series C equity investment in CelLink Corporation, a provider of high-conductance flexible circuits for the automotive industry. The investment would allow the company to expand its electrification strategy.

Global Electric Powertrain Market: Key Companies Insights

The key players operating in the global electric powertrain market are Borgwarner Inc., Continental Ag, Magna International Inc., Marelli Holdings Co.Ltd., Mitsubishi Electric Corporation, Nidec Corporation, Robert Bosch Gmbh, Schaeffler Group Usa Inc., and Valeo Sa.