Driveline Market for Electric & Hybrid Vehicle – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Architecture (Series, Parallel, Power split), By Transmission (Automatic Transmission (AT), Dual Clutch Transmission (DCT), Electronic Continuously Variable Transmission (E-CVT)), By Motor Output (45-100 kW, 101-250 kW, and250kW), By Vehicle Type (Hybrid Vehicles, Plug-In E
Published Date: April - 2025 | Publisher: MIR | No of Pages: 320 | Industry: Automotive | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request Customization| Forecast Period | 2024-2028 |
| Market Size (2022) | USD 32 billion |
| CAGR (2023-2028) | 8.6% |
| Fastest Growing Segment | Battery Electric Vehicle |
| Largest Market | Asia-Pacific |
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Market Overview
Global Driveline Market for Electric & Hybrid Vehicle Market has been valued at USD 32 billion in 2022 and is expected to register strong growth during the forecast period with a CAGR of 8.6%.
The Global Driveline Market for Electric & Hybrid Vehicles is presently witnessing remarkable growth due to mounting concern towards limiting carbon emissions and the rapid increase in the adoption of electric vehicles across the world. This colorful market consists of a broad array of major players involved in the production of critical components such as electric motors, converters, and power electronics, which are crucial for the effective functioning of electric and hybrid vehicles. Additionally, strict government regulations related to fuel efficiency and carbon emissions are also contributing significantly to the growth of this market.
Among this successful market, the Asia-Pacific region has become a leading player, especially because of the high production and sales of electric vehicles in nations such as China and Japan. The region's strong emphasis on sustainable mobility and the prevalence of charging infrastructure have helped spur its quick expansion in the electric and hybrid vehicle market. Nonetheless, it must be highlighted that the market increase also has a critical challenge in the form of high costs related to driveline parts. Industry players and companies are actively working to find innovative ways to surmount this challenge and develop more affordable solutions, thus fostering additional growth and viability in the electric and hybrid vehicle industry. By maximizing production processes through advanced technology and cutting production costs, the sector strives to increase access to electric and hybrid vehicles by wider sections of the consumers and boost the shift worldwide to cleaner mobility.
Key Market Drivers
Strict Environmental Laws
Stringent environmental laws all over the globe are one of the main drivers of the explosion in electric and hybrid cars (EVs and HEVs). Governments and authorities are making very stringent targets for cutting carbon emissions and curbing climate change. In order to achieve these laws, automakers are putting in huge amounts in electric and hybrid drivetrain technologies, which are more environmentally friendly and have fewer greenhouse gas emissions than conventional internal combustion engines. These rules encourage the growth and use of electrified drivelines.
Sustainability and Emission Reduction
The worldwide focus on sustainability and the minimization of greenhouse gas emissions is a key driver of the transition to electric and hybrid cars. Consumers are becoming more aware of their carbon footprint and are looking for sustainable transport alternatives. Electrified drivelines complement sustainability objectives by providing cars with reduced or zero tailpipe emissions, which is a preferred option for sustainable consumers
Fuel Efficiency and Energy Conservation
Fuel efficiency is always a top priority for consumers and manufacturers alike. Electric and hybrid drivelines are more energy-efficient by their nature compared to conventional internal combustion engines. Electric vehicles, especially, are able to utilize a greater percentage of the energy from the grid to power the vehicle, resulting in higher fuel efficiency and lower energy use. This efficiency is a key motivator for the use of electric and hybrid driveline technologies.
Advancements in Battery Technology
The evolution of new battery technologies is one of the major driving forces behind the market penetration of electric and hybrid vehicles. Advancements in energy density of batteries, charging facilities, and costs have helped the increased driving range and wider adoption of electric vehicles. These advancements are critical in mitigating range anxiety and increasing the availability of EVs for a wider audience of consumers.
Government Incentives and Subsidies
Most governments across the globe provide subsidies and incentives for the use of electric and hybrid vehicles. Such incentives can range from tax credits, rebates, lower registration fees, to access to high-occupancy vehicle (HOV) lanes. These all contribute to lowering the cost of ownership and urge consumers to adopt electric and hybrid drivelines.
Improvements in Electric Motor Technology
Electric motors are central to electric and hybrid drivelines. Continued innovation in electric motor technology has resulted in smaller, more powerful, and more efficient motors. These developments enable better vehicle performance, greater power output, and longer electric-only driving ranges, making electric and hybrid vehicles more attractive to consumers.
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Consumer Demand for Advanced Features
Consumer preferences are shifting towards vehicles equipped with advanced features and technology. Electric and hybrid cars have a plethora of technological innovations, such as regenerative braking, instant torque, and connectivity features. These technologies make the driving experience better and appeal to tech-conscious consumers who desire the most recent innovations in their cars.
Lower Operating Costs
Electric and hybrid cars generally have lower operating expenses than conventional gasoline or diesel cars. Lower fuel expenses, less maintenance, and longer-lasting parts are the reasons for these cost savings. As people become more cost-sensitive, the prospect of lower lifetime operating costs is a strong motivator for the use of electrified drivelines.
Corporate Sustainability Goals
Car makers are adding sustainability to corporate strategies more and more. Various manufacturers have formulated ambitious sustainability plans, such as electrifying fleets and becoming carbon-neutral. Corporate sustainability programs steer investment in electric and hybrid driveline technologies as a way of conforming with long-term green goals.
Technological Innovation and Competition
Severe competition between carmakers has resulted in ongoing technological advances in electric and hybrid drivetrains. Players are competing to create proprietary technology that provides a competitive advantage to them in the market. The competitive environment produces a steady wave of innovations, which is an advantage for customers with more efficient and feature-enriched electric and hybrid vehicles.
Urbanization and Urban Mobility Challenges
The challenges of congestion, pollution, and space for parking caused by rapid urbanization have driven interest in hybrid and electric cars. They come with the benefits of quieter drive, lower emissions in urban spaces, and small sizes that make them suitable for city use. As cities enforce measures to manage urban problems, electric and hybrid drivelines offer more desirable solutions.
Resilience to Oil Price Fluctuations
Key Market Challenges
High Production Costs
Manufacturing drivelines for hybrid and electric vehicles comes at high costs, with the major cause being the use of sophisticated technologies like regenerative braking systems and powerful electric motors. Furthermore, the incorporation of costly materials such as lithium-ion batteries and lightweight alloys adds to the overall costs of producing such drivelines.
Restricted Driving Distance and Battery Life
Even with substantial progress, electric and hybrid cars generally only provide a limited range of driving distance from their conventional counterparts. This is because battery technology is not yet at its peak, which influences how far they can go on a single charge. Moreover, the fear of battery life and possible charging facilities can be a source of reservation among prospective buyers, as they weigh up the usability and ease of having an electric or hybrid car. However, it is important to note that ongoing research and development in battery technology is constantly improving the range and performance of these vehicles, making them a more viable and sustainable option for the future.
Infrastructure Constraints
The infrastructure for charging electric and hybrid vehicles remains underdeveloped in many regions, posing a significant challenge for potential customers. The insufficiency of charging points not only limits convenience but also affects the general market growth of drivelines for such vehicles. As demand for clean transport continues to grow, the necessity for a wider and reliable network of charging points becomes even more vital to facilitate the mass adoption of electric and hybrid cars. Efforts to address this issue and invest in the development of charging infrastructure are necessary to propel the future of clean and efficient transportation.
Performance in Extreme Weather Conditions
Electric and hybrid vehicles, with their sophisticated drivelines, may encounter reduced performance during severe weather conditions like extreme cold or hot weather. This could effectively deter prospective buyers who live in areas that have frequent severe weather occurrences from buying these kinds of vehicles, even though they have many positive aspects to offer.
Consumer Awareness and Perception
A considerable and considerable part of the world's population, regretfully, is still quite unaware of the many advantages that electric and hybrid cars have to provide. Additionally, it should be mentioned that the attitude towards these new cars is not always favorable, with some misconceptions being prevalent. Yet, it is important to promote awareness and enlighten people regarding the benefits and good that these vehicles can have on the planet and our way of life. Through this, we can achieve a more sustainable future and urge a transition to greener means of transportation.
Resource Scarcity
Key driveline materials for electric and hybrid cars, like lithium used in batteries, are at risk of shortage caused by increasing demand and limited supplies of this critical resource. Such shortages can lead to higher costs and production hassles as the manufacturers seek a reliable supply base and alternative material options for economical and sustainable alternatives. The necessity of active measures and industry strategic alliances arises as we take on the challenges of keeping pace with increasing demands for such environment-friendly cars.
Regulatory Challenges
Automakers must meet demanding regulations related to the manufacturing of electric and hybrid cars. Although these rules do at times constrain market development and innovation, they are also integral to the safeguarding of safety, environmental longevity, and buyer confidence in the emerging arena of electric and hybrid transportation. Manufacturers, by strictly following these norms, are not only working to create a greener and sustainable future but are also pushing innovation in technology as well as redefining car engineering.
Competing Technologies
The rapid advancement of hydrogen fuel cell technology and the sustained optimization of internal combustion engines' efficiency present a major danger to the mass appeal of electric and hybrid cars. With more efficient and affordable hydrogen fuel cell technology becoming available, it is a viable substitute for electric vehicles because it fills some of the gaps, like longer refueling time and fewer stations, among others. Similarly, ongoing advancements in internal combustion engines, including hybridization and electrification, contribute to their increased fuel efficiency and reduced emissions, narrowing the gap between traditional and alternative powertrains. Therefore, the automotive industry faces a complex landscape of competing technologies, each with its own set of advantages and challenges, as it strives for sustainable mobility solutions.
Technological Issues
Technical problems, including battery leaks or electric system failure, may be major concerns for the electric and hybrid vehicle driveline market. Such problems can lead to compromised vehicle performance, higher maintenance expenses, and possible safety issues for both passengers and drivers. It is imperative that manufacturers and industry experts act early to deal with such issues and come up with solid solutions to allow the electric and hybrid vehicle market to continue expanding and thriving.
Key Market Trends
Rise of Electrification
Stimulated by more stringent emissions regulations, enhanced consumer consciousness regarding the need to save the environment, and the adoption of policies favorable to such electrification by governments, there is a widespread movement worldwide toward the electrification of automobiles. This revolutionary trend is directly responsible for the fast expansion of the driveline market for electric and hybrid vehicles, as it is a critical factor acting as an indispensable part of the powertrain systems of these environmentally friendly vehicles. With the revolution in electrification picking up speed, the driveline market is likely to experience even greater advancements and innovations in the years to come.
Advancements in Driveline Technologies
Technological advancement is a salient and ever-changing market pattern that continues to influence the car industry. Suppliers are continually pouring money into research and development efforts to design highly sophisticated driveline systems that improve performance, efficiency, and security while also serving the changing requirements of consumers. These technologies include an extensive variety of solutions, such as integrated electric axles (e-axles) that integrate electric motors with conventional drivetrain parts, and advanced power transfer units that optimize power distribution for ultimate performance and fuel efficiency. By setting new technology standards, manufacturers are advancing the sector, providing drivers with a more sustainable, efficient, and enjoyable driving experience.
Growing Demand for All-Wheel Drive (AWD) Systems
All-wheel drive systems, recognized by their potential for providing improved control and traction on poor weather and rough ground conditions, have recently become incredibly popular among vehicle users. With an increased demand for AWD systems, this, in turn, has prompted increased growth in the driveline sector. Since these sophisticated systems require specialized driveline components, manufacturers and suppliers are concentrating on innovating and developing driveline technologies to address the changing demands of the automotive sector. This trend not only reflects the growing significance of AWD systems for improved vehicle performance and safety but also the opportunities and challenges of the growing driveline market.
Growth of Shared Mobility and Ride-hailing Services
The faster growth of community mobility platforms such as Uber and Lyft, followed by increased vehicle usage rates, has caused the wear and tear of many vehicle components, including drivelines, to increase dramatically. The rising trend has made more frequent driveline replacements in demand, thus driving market growth for driveline replacement services and products. As increasingly more people depend on such shared mobility modes, the requirement for effective and dependable drivelines becomes imperative to provide a seamless and unbroken transportation experience. This offers a huge opportunity for businesses in the driveline segment to address the specific needs and challenges of the shared mobility environment.
Transition to Lightweight Driveline Components
As part of the continued quest for fuel efficiency and optimal vehicle performance, manufacturers are increasingly focusing on the use of lightweight driveline components. Increasingly, the trend has induced the creation and widespread use of new lightweight materials, such as aluminum and carbon fiber, during the manufacturing process of driveline systems. By utilizing these novel materials, car manufacturers are in a position to obtain significant weight savings without affecting strength or durability, leading to enhanced overall efficiency and performance of cars.
Growing Use of EVs in Business Fleets
With companies focusing more on becoming more sustainable, companies are looking more towards the benefits of electric vehicles (EVs) for their fleets. Due to reduced total cost of ownership and substantial environmental advantages, EVs are becoming the favorite option. This increasing trend has created a surge in demand for electric and hybrid commercial vehicle-compatible drivelines. By adopting these new driveline technologies, companies can not only lower their carbon footprint but also help shape a greener and more sustainable world.
Surge in Demand in Emerging Markets
Emerging markets such as China and India are witnessing a massive urbanization trend, with increasing numbers of people migrating to cities in search of better opportunities. Concurrently with this, there has also been a significant rise in disposable incomes, giving people more buying power. In addition, people have become increasingly aware of the need for environmental sustainability, resulting in increased demand for electric and hybrid cars. Consequently, the demand for sophisticated driveline technologies in these markets has become even more acute. The convergence of these elements has formed a new and dynamic environment for the auto sector to grow and innovate.
Segmental Insights
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Architecture Insights
The global Driveline Market for Electric & Hybrid Vehicles showcases an impressive architectural structure, influenced strongly by the rapid adoption of eco-friendly transportation solutions. The market structure is underpinned by a network of key players, including original equipment manufacturers (OEMs), driveline system designers, and technology providers. This synergy allows for continuous innovations, ensuring that the market remains at the forefront of the electric and hybrid vehicle industry. Furthermore, the market's architecture highlights a strong emphasis on the integration of software systems for driveline control, thus facilitating optimal vehicle performance and improved energy efficiency.
Vehicle Type Insights
The global Driveline Market for Electric & Hybrid Vehicles demonstrates significant diversity in vehicle type. The market includes a wide range of vehicles - from passenger cars to commercial vehicles. Passenger cars currently dominate the market due to the increasing demand for personal electric vehicles and government incentives promoting the adoption of greener transportation methods. Hybrid electric vehicles (HEVs) are expected to witness steady growth, owing to their improved fuel efficiency and lower emissions compared to conventional vehicles. Meanwhile, the market for plug-in hybrid electric vehicles (PHEVs) also shows promising potential, driven by advancements in charging infrastructure and increasing consumer awareness about environmental sustainability.
Regional Insights
The Driveline Market for Electric & Hybrid Vehicles demonstrates significant growth potential across various regions globally. In North America, government regulations promoting electric vehicles (EVs) and hybrid vehicles (HVs) have spurred market growth, with the United States leading in terms of market share. Europe presents a robust market scenario, with countries like Germany and France at the forefront due to stringent emission norms and substantial investments in EV infrastructure. The Asia-Pacific region, particularly China, is expected to witness exponential growth, attributed to the government's aggressive EV adoption targets and burgeoning manufacturing capabilities. Conversely, emerging economies in Africa and South America, while still in the nascent stages, are showing promising potential due to increasing environmental awareness and governmental initiatives for clean energy vehicles.
Recent Developments
- In 2021, Volvo Penta has startedproduction of E-driveline for world’s first serial electric fire truck.
- In 2022, TotalEnergies has Launched EVFluid Range For EVs, and Hybrid Vehicles.
Key Market Players
- Robert Bosch GmbH
- Delphi Technologies
- DENSO Corporation
- Continental AG
- Borg Warner Inc.
- ZF Friedrichshafen AG
- Valeo SA
- Schaeffler AG
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By Motor Output |
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