Electric Vehicle Driveline Market Size

The global electric vehicle driveline market size was valued at USD 13.8 billion in 2023 and is projected to grow at a CAGR of 8.4% between 2024 and 2032. Increasing consumer demand for sustainable transportation is anticipated to propel the market growth. As consumer become more aware of climate change and air quality concerns, they are actively looking for greener options instead of traditional ICE vehicles.

For instance, according to the International Energy Agency (IEA), electric car sales reached approximately 14 million in 2023. The share of electric vehicles in total sales has grown from about 4% in 2020 to 18% in 2023. As more consumers adopt electric vehicles, the market for electric driveline components such as electric motors, batteries, and power electronics expands. This growing interest also drives innovation within the sector and encourages the development of supporting infrastructure, reinforcing the momentum towards a more electrified transportation landscape.

Introduction of government new incentives and regulations is driving the electric vehicle driveline market growth. Many governments across the world are implementing policies to promote electric vehicle adoption as part of their strategies to reduce greenhouse gas emissions and combat climate change. These initiatives often include tax credits, rebates, and grants for EV purchases, making electric vehicles more financially attractive to consumers.

Additionally, stringent emissions regulations push automakers to invest in electric driveline technologies to meet compliance standards. Such regulations can include targets for zero-emission vehicles or penalties for excessive emissions, compelling manufacturers to accelerate their shift to electric drivetrains. These supportive policies enhance the market appeal of electric vehicles and stimulate innovation in the electric driveline market.

Electric Vehicle Driveline Market Trends

Continuous innovations in battery technology, electric motors, and power electronics are enhancing the performance and efficiency of electric driveline systems. Improvements such as higher energy densities, faster charging capabilities, and lighter materials are making electric vehicles more appealing to consumers. These advancements extend the driving range and reduce charging times, addressing key concerns that potential buyers may have. This ongoing technological progress boosts consumer interest and encourages manufacturers to launch new products in the market.

For instance, in January 2024 AAM showcased Next-Gen Electric Drive Solutions at CES. The company showcased several products including fully integrated beam axles and advanced component technologies.

The production of electric vehicle drivelines often requires advanced materials and complex manufacturing processes. This can lead to increased production costs, making electric vehicles less competitive. Additionally, fluctuations in raw material prices, particularly for lithium and cobalt used in batteries, can further exacerbate this issue. As demand for these materials rises, supply chain disruptions can lead to significant price volatility, creating uncertainty for manufacturers and consumers.

Electric Vehicle Driveline Market Analysis

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Based on transmission, the market is segmented into single-speed and multi-speed. In 2023, the single-speed segment accounted for over 70% of the market share and is expected to exceed USD 19 billion by 2032. Single-speed transmissions eliminate the need for complex gear shifting mechanisms, allowing for a more streamlined design. This simplicity reduces manufacturing costs and weight, which can enhance overall vehicle efficiency and performance. Moreover, electric motors deliver maximum torque instantly, making a single-speed transmission more effective for electric drivetrains. This characteristic enables smoother acceleration and a more responsive driving experience, appealing to consumers seeking modern, high-performance vehicles.

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Based on the drive, the electric vehicle driveline market is divided into front-wheel drive (FWD), rear-wheel drive (RWD), and all-wheel drive (AWD). The front-wheel drive (FWD) segment held around 59% of the market share in 2023 due to several key factors. FWD configurations allow for a more compact design, as the electric motor and battery can be integrated into the front of the vehicle, freeing up space for passengers and cargo. This is appealing to urban consumers who prioritize versatility in their vehicles.

Additionally, FWD systems provide advantages in terms of traction and stability, especially in adverse weather conditions. The weight distribution of the electric motor over the front wheels enhances grip, resulting in better performance and safety. As automakers work to meet consumer preferences for compact, efficient, and user-friendly vehicles, FWD configurations are becoming popular.

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The U.S. region accounted for a electric vehicle driveline market share of over 70% in 2023 and is expected to exceed USD 5.5 billion by 2032. The increasing governmental support and incentives for electric mobility is propelling the U.S. market growth. Federal and state initiatives, including tax credits, rebates, and grants, are encouraging consumers to transition to EVs. These financial incentives reduce the overall cost of ownership, making electric vehicles more attractive compared to traditional internal combustion engine vehicles.

Additionally, the U.S. government has set ambitious targets for reducing greenhouse gas emissions and promoting clean energy, further bolstering the market. Investments in charging infrastructure, such as fast-charging networks, enhance the convenience and accessibility of electric vehicles, alleviating range anxiety among potential buyers.

As awareness of climate change grows and consumer preferences shift towards sustainable options, supportive policies are crucial for accelerating the adoption of electric drivetrains in North America. This synergy between consumer demand and government action positions the electric vehicle driveline market for significant growth in the coming years.

Europe electric vehicle driveline market is driven by the rapid advancement of battery technology. Innovations in battery chemistry and production processes are leading to higher energy densities, faster charging times, and improved overall performance. These advancements enhance the driving range of electric vehicles and reduce costs. Additionally, the establishment of local battery production facilities within Europe aims to decrease reliance on imports and stabilize supply chains, further supporting market growth.

As countries in Asia pacific expand, governments are increasingly focused on addressing air pollution and traffic congestion, prompting a shift towards sustainable transportation solutions. Countries such China, South Korea, and India are leading the charge, with aggressive government policies promoting EV adoption, including subsidies, tax incentives, and investments in charging infrastructure.

Electric Vehicle Driveline Market Share

Bosch, Continental, and ZF Friedrichshafen collectively held a substantial market share of over 10% in the electric vehicle driveline industry in 2023. Bosch is focusing on developing advanced electric powertrains system and battery management systems, leveraging its extensive experience in automotive components to enhance performance and efficiency. The company is also investing in research and development to accelerate the deployment of sustainable technologies.

Continental is emphasizing integrated solutions, combining software and hardware for smarter driveline systems. Their approach includes collaborating with startups and tech firms to drive innovation in areas like autonomous driving and connectivity, making their EV components more attractive to manufacturers.

ZF Friedrichshafen is capitalizing on its expertise in driveline technology by expanding its portfolio to include electric and hybrid drivetrains. The company is also participating in strategic partnerships with automakers to co-develop cutting-edge technologies, ensuring they remain competitive in the rapidly evolving EV market.

Electric Vehicle Driveline Market Companies

Major players operating in the electric vehicle driveline industry are:

• BorgWarner
• Bosch
• Continental
• Dana Incorporated
• GKN Automotive
• JTEKT Corporation
• Nidec Corporation
• Schaeffler
• Valeo
• ZF Friedrichshafen
  

Electric Vehicle Driveline Industry News

• In December 2023, ZF Group showcased intelligent system solutions from conventional driveline to full vehicle electrification at EXCON India 2023. ZF’s newly launched eCD (electric Central Drive) system consists of a two-speed powershift transmission with integrated parking brake, electric motor, and inverter.
  
• In October 2023, GKN Automotive launched new off-the-shelf electric drive unit concept. The new eCrate concept utilises GKN Automotive’s eDrive experience to create a cost-effective modular electric drive system with optimal efficiency and performance.
  

The electric vehicle driveline market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) and shipment (units) from 2021 to 2032, for the following segments:

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Market, By Architecture

• Series
• Parallel
• Power split

Market, By Transmission

• Single-speed
• Multi-speed

Market, By Motor

• Less than 100 kW
• 100-250 kW
• Above 250 kW

Market, By Drive

• Front-wheel drive (FWD)
• Rear-wheel drive (RWD)
• All-wheel drive (AWD)

Market, By Propulsion

• Hybrid vehicles
• Plug-in hybrid vehicles
• Battery electric vehicles

Market, By Vehicle

• Passenger vehicles
• Commercial vehicles
• Two-wheelers

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa