Electric Drive Unit Market Size - By Vehicle Type (BEV, HEV, PHEV), By Sales Channel (OEM, Aftermarket), By Coolant (Water Glycol, Oil Based) & Forecast, 2024 - 2032

Electric drive unit market size is anticipated to witness over 22.8% CAGR between 2024 and 2032 driven by the increasing demand for electric vehicles (EVs) as countries worldwide aim to reduce greenhouse gas emissions and combat climate change. As per International Energy Agency (IEA), around 14 million new electric cars were registered worldwide in 2023, raising the total number of EVs on the road to 40 million. Governments are also implementing stringent regulations for offering incentives to promote the adoption of EVs, which, in turn, is boosting the demand for Electric drive units (EDUs).

Manufacturers are also investing heavily in R&D activities to improve the efficiency, power density, and reliability. The integration of advanced materials and manufacturing processes has further led to more compact and lightweight units, which are critical for extending the range and performance of EVs. The rise of autonomous and connected vehicle technologies is also creating new opportunities as these vehicles require sophisticated electric drive systems to support their advanced functionalities.

The EDU industry is segmented into vehicle type, sales channel, coolant and region.

Based on vehicle type, the market size from the HEV segment is set to witness notable growth up to 2032 owing to the strong need for sophisticated drive units to manage the combination of internal combustion engines and electric power sources. This dual-powertrain system is necessitating advanced EDUs to optimize energy efficiency, performance, and seamless transition between power sources. The growing adoption of HEVs, driven by increasing environmental concerns and regulatory pressures to reduce emissions will also add to the segment growth.

In terms of coolant, the EDU market from the water glycol segment is estimated to generate high revenue during 2024-2032 due to its superior thermal management properties, which are crucial for maintaining the efficiency and longevity. Water glycol coolants are highly effective in dissipating the heat generated by electric motors, power electronics, and batteries for ensuring optimal performance and preventing overheating.

North America electric drive unit market size will witness expansion over 2024-2032 attributed to the significant investments in EV manufacturing and infrastructure by both private companies and government initiatives. The presence of major automotive manufacturers and tech companies in the region is fostering innovations and accelerating the development of advanced EDUs. The increasing consumer awareness and the surging demand for sustainable transportation options coupled with favorable regulatory frameworks and incentives will further bolster the regional market growth.