Vehicle Electrification Market Size to Reach US$ 271.2 Bn by 2032

The global vehicle electrification market size was valued at USD 91.73 billion in 2022 and it is projected to hit around USD 271.2 billion by 2032, rising at a CAGR of 11.5% from 2023 to 2032.

Vehicle Electrification Market Size 2023 to 2032

Key Takeaway:

The Asia-Pacific market was valued at USD 45.81 billion in 2022.
North America is expected to reach at a CAGR of 10.9% over the forecast period.
By hybridization, the ICE segment has captured revenue share of 61% in 2022.
The PHEV segment is poised to grow at a CAGR of 14.7% over the forecast period.
By product, the electric power steering (EPS) segment has captured 12.5% revenue share in 2022.
The electric vacuum pump segment is growing at a CAGR of 12.4% over the forecast period.

Vehicle electrification means a vehicle with electrical means of propulsion, in addition, function of components in those vehicles are driven by electrical energy. It covers different aspects of electrification in the vehicle such as electric power steering, start/stop systems, electric oil pump, electric vacuum pump, and many other accessories that utilizes electric propulsion mode as well as help consumers to experience improved fuel economy when installing in conventional ICE vehicles.

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Growth Factors

The concept of mild hybrids or 48V architecture is increasingly gaining traction across the globe that is consequently expected to fuel the demand for vehicle electrification in the coming years. Full hybrid vehicles offer higher fuel efficiency as compared to mild hybrid. As per the International Council on Clean Transportation, fuel consumption is reduced by 30-35% by the application of full hybrid vehicles. However, due to high cost and increased weight of the vehicle, mild hybrid vehicles are the preferred choice by Original Equipment Manufacturers (OEMs) and consumers.

On the other hand, difficulty in achieving an optimum power-to-weight ratio in an electric vehicle hinders the market growth. As the weight of the vehicle reduces consequently the power of vehicle improves, thus OEMs and Tier 1 companies are working significantly on implementation of light weight components and advanced products that improves the power-to-weight ratio.

Regional Snapshots

The Asia Pacific expected to be the most promising region in the global vehicle electrification market and captured nearly 50% value share in 2019. In addition, the region experience attractive growth over the forecast period. Rising adoption of electrically-powered vehicles in Asian countries especially in China, Japan, India, and Korea attributed as the major factor that drives the market growth in the region. Furthermore, rising disposable income along with rising demand for green mode of transportation in the region significantly trigger the demand of vehicle electrification.

On the other side, Europe encountered to be the second largest revenue shareholder in the global vehicle electrification market in the year 2019. European government initiatives for encouraging people to adopt battery-powered or other types of electric vehicles such as Hybrid Electric Vehicle (HEV) and Plug-in Hybrid Electric Vehicle (PHEV) attributed as the prime factor that drives the market growth.

Report Scope of the Vehicle Electrification Market

Report Highlights	Details
Market Size in 2023	USD 101.82 Billion
Market Size by 2032	USD 271.2 Billion
Growth Rate from 2023 to 2032	CAGR of 11.5%
Largest Market	Asia Pacific
Fastest Growing Market	Europe
Base Year	2022
Forecast Period	2023 to 2032
Segments Covered	Product Type, Hibridization Type, Region Type

Report Highlights

In 2019, the Asia Pacific captured the maximum revenue share in the global vehicle electrification market and experience attractive growth during the forecast period. High demand for vehicle supplements in China and India propels the market growth in the region. Further, rapid adoption of green transportation in Asian countries triggers the adoption of battery-powered vehicles such as BEV, HEV, and PHEV again contributes positively towards the market growth.
Europe holds second largest position in the global vehicle electrification market in terms of revenue in the year 2019. The governments of France, Germany, UK, Italy, and other European countries focus on sustainable development in infrastructure growth, this offers significant opportunity for the market players to flourish their business.
Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle dominated the global vehicle electrification market in the year 2019 and expected to witness a substantial growth in the coming years. However, Plug-in Hybrid Electric Vehicle (PHEV) registered the highest growth of nearly 16% over the analysis period.
Electric Power Steering (EPS) witness high demand in 2019 and expected to grow at a significant rate during the forecast period. Extra comfort offered by the EPS system to the driver is the one of the potential driving factors that significantly boosts the market growth. On the other hand, electric oil pump exhibit the fastest growth over the forecast period.

Key Players & Strategies

The global vehicle electrification market is high competitive and seeks consolidation due to major market players capture significant revenue share globally. The companies are more driven towards electrical-powered solution to their consumers as they are more efficient and affordable. Partnership, acquisition, and research & development are the prime strategies adopted by the industry participants to strengthen their footprint in the market along with broadening their product portfolio.

Robert Bosch GmbH is the most prominent market player in the global vehicle electrification market and offers its diverse solutions for vehicle electrification through the Mobility solution segment. Similarly, Denso Corporation, Continental AG, Johnson Electric, Delphi Automotive PLC, and Mitsubishi Electric Corporation prominently contribute to a major revenue share in the global vehicle electrification market.

Several noteworthy market participants contributing to the market revenue are as follows: