Vehicle Electrification Market Analysis | 2025-2032

Market Insights

Global Demand Analysis & Sales Opportunities in Vehicle Electrification Market

• The annual demand for vehicle electrification market was USD 109.4 billion in 2024 and is expected to reach USD 121.5 billion in 2025, up 11.05% than the value in 2024.
• During the next 8 years (forecast period of 2025-2032), the vehicle electrification market is expected to grow at a CAGR of 10.70%. The annual demand will reach of USD 247.5 billion in 2032, which is almost 2.04 times (~104% up) of the demand in 2025.
• During 2025-2032, the vehicle electrification industry is expected to generate a cumulative sales opportunity of USD 1429.4 billion which is almost 2.65 times the opportunities during 2019-2024.

High-Growth Market Segments: 

• North America generated the highest demand in 2024, with increasing charging infrastructure and massive investments by original equipment manufacturers as the key growth drivers in the region.
• By product type, electric power steering (EPS) segment is projected to be the dominant segment during the forecast period.
• By vehicle type, passenger cars segment is projected to be the dominant segment during the forecast period.

Market Statistics

Have a look at the sales opportunities presented by the vehicle electrification market in terms of growth and market forecast.

Market Dynamics

Introduction

What is vehicle electrification?

The vehicle electrification market is the industry dedicated to the implementation of electric powertrain technologies in vehicles with a view to lowering reliance on conventional internal combustion engines (ICE). It encompasses a variety of electric technologies, including battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles (FCEVs). The market is being fueled by worldwide initiatives to minimize carbon emissions, mitigate environmental issues, and comply with regulatory requirements for vehicle efficiency and sustainability.

Market Drivers:

Rising Demand for 48V Architecture:

• The idea of 48 V architecture or mild hybrids is quickly gaining popularity across the world, which in turn is likely to fuel the demand for vehicle electrification in the coming years. This architecture offers a cost-effective and efficient alternative to high-voltage systems. Unlike traditional 12V systems, 48V mild hybrid systems offer greater power density, enabling the electrification of key components such as electric turbochargers, air conditioning compressors, and power steering systems.
• This leads to reduced engine load, lower CO2 emissions, and improved vehicle performance. Moreover, it supports mild hybrid functions like regenerative braking and torque assist, reduces emissions, and enhances performance, making it ideal for mid-range vehicles amid rising demand for low-emission transportation solutions.

Market Challenges:

Challenge in Maintaining an Ideal Balance Between Power and Weight:

• Power-to-weight ratio is a calculation that is usually used for engines and power sources to facilitate the comparison of one car to another. Power-to-weight ratio is used for the vehicle power in kW divided by the vehicle weight in kilograms. The lower the vehicle weight, it is seen to have more power, improved efficiency, and high range. 
• Achieving the ideal power-to-weight ratio requires advanced, lightweight materials and components. OEMs and other leading companies are doing their best to enhance the power-to-weight ratio by introducing lightweight materials and various advanced products like e-CVT and e-axles, though still in a developmental phase.

Developing Error-Proof Electronic and Electrical Components:

• Electric vehicles incorporate advanced technologies and electric power components, presenting safety challenges such as battery overheating, thermal runaway, and fire risks. Key concerns include electric system safety, functional safety, charging safety, and proper maintenance and training.
• Moreover, high battery costs, limited energy storage, and performance inefficiencies compared to internal combustion engine (ICE) vehicles hinder widespread adoption.

Market Opportunities:

Electrification of Commercial Vehicles:

• Urban population growth is straining public transport infrastructure, driving demand for sustainable mobility solutions, which in turn creates a significant opportunity for the vehicle electrification market. Since every OEM is now emphasizing decreasing the carbon footprint globally, they are encouraging electric vehicle usage.
• With the growing trend towards mobility on demand, passenger cars and taxis are becoming more concentrated on cleaner technologies. Moreover, governments of different nations are initiating steps for the higher adoption of electric vehicles in their public transport to decrease CO2 emissions by offering incentives and tax rebates for using e-trucks and e-buses. 
• As EV adoption expands, demand for efficient, lightweight systems rises, creating opportunities for electric component and e-drive system manufacturers in the commercial vehicle sector.

Market Segments' Analysis

By Product Type 

“Electric Power Steering is projected to be the dominant segment during the forecast period.”

• The vehicle electrification market is segmented by product type into start-stop, electric power steering, liquid heater PTC, electric vacuum pump, and others.
• Electric power steering (EPS) segment is projected to be the dominant segment during the forecast period due to its superior energy efficiency, reduced weight, and compatibility with advanced driver assistance systems (ADAS). Additionally, EPS offers lower maintenance costs and improved reliability, aligning well with the broader goals of vehicle electrification and performance optimization.   

By Vehicle Type 

“Passenger Cars segment is expected to be the dominant segment during the forecast period.”

• The vehicle electrification market is segmented by vehicle type into passenger car and light commercial vehicles.
• Passenger Cars segment is expected to be the dominant segment during the forecast period, driven by the Increasing environmental consciousness among consumers, government incentives promoting electric vehicles (EVs), advancements in battery technology leading to longer ranges, and expanding charging infrastructure.
• Moreover, the attempts by automakers to provide a variety of EV models with enhanced performance and desirable features have also contributed to the increased adoption of electric vehicles by consumers globally.

Regional Analysis 

“North America is expected to be the dominant and fastest-growing region over the forecasted period.”

• Based on region, the vehicle electrification market has been segmented into North America, Europe, Asia Pacific, and the Rest of the world.
• North America is expected to be the dominant and fastest-growing region over the forecasted period, driven by increasing charging infrastructure and massive investments by original equipment manufacturers in vehicle electrification development. Furthermore, federal tax credits and rebate incentives are driving the growth of this market, particularly in the US. 

Competitive Landscape

Top Players

Most of the major players compete in some of the factors, including price, service offerings, regional presence, etc. The following are the key players in the vehicle electrification market -  

• Bosch
• Continental
• Denso
• BorgWarner
• Mitsubishi Electric
• Aptiv
• Valeo SA
• Johnson Controls
• Hitachi Astemo Ltd.
• Magna International Inc.

Note: The above list does not necessarily include all the top players in the market.

Are you a leading player in this market? We would love to include your name. Please write to us at sales@stratviewresearch.com

Recent Developments/Mergers & Acquisitions: 

• In April 2025, BYD, a Chinese electric vehicle company, and Aramco signed a joint development agreement to prusue innovation in new energy vehicle technologies. The partnership between Saudi Aramco Technologies Co. and BYD is to build solutions that have less environmental impact and are more efficient.

Report Features

This report provides market intelligence most comprehensively. The report structure has been kept so that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market.

The following are the key features of the report:

• Market structure: Overview, industry life cycle analysis, supply chain analysis.
• Market environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
• Market trend and forecast analysis.
• Market segment trend and forecast.
• Competitive landscape and dynamics: Market share, Service portfolio, New Product Launches, etc.
• COVID-19 impact and its recovery curve.
• Attractive market segments and associated growth opportunities.
• Emerging trends.
• Strategic growth opportunities for the existing and new players.
• Key success factors.

Market Segmentation 

This report studies the market, covering a period of 15 years of trend and forecast. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The vehicle electrification market is segmented into the following categories:

By Product Type

• Start-Stop
• Electric Power Steering
• Liquid Heater PTC
• Electric Car Conditioner Compressor
• Electric Vacuum Pump
• Electric Oil Pump
• Starter Motor
• Alternator
• Actuator
• Integrated Starter Generator

By Vehicle Type

• Passenger Cars
• Light Commercial Vehicles

By Degree of Hybridization Type

• Internal Combustion Engine
• Hybrid Electric Vehicle
• Plug-In Hybrid Electric Vehicle
• Battery Electric Vehicle
• 48 V Vehicle

By Region

• North America (Country Analysis: The USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, The UK, Russia, and the Rest of Europe)
• Asia-Pacific (Country Analysis: China, Japan, India, and Rest of Asia-Pacific)
• Rest of the World (Country Analysis: Brazil, Saudi Arabia, and Others)

Research Methodology

• This strategic assessment report from Stratview Research provides a comprehensive analysis that reflects today’s vehicle electrification market realities and future market possibilities for the forecast period. 
• The report segments and analyzes the market in the most detailed manner to provide a panoramic view of the market.
• The vital data/information provided in the report can play a crucial role for market participants and investors in identifying the low-hanging fruits available in the market and formulating growth strategies to expedite their growth process.
• This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.
• More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.
• We conducted more than 15 detailed primary interviews with market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Report Customization Options

With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Service portfolio, geographical reach, regional presence, and strategic alliances

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