Electric Vehicle Driveline Market Size

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.