Vehicle Electrification Market Size, Share, Growth Analysis, By Product Type, By Vehicle Type, By Degree of Hybridization (Internal Combustion Engine, Plug-In Hybrid Electric Vehicle ), By Region - Industry Forecast 2024-2031

Global Vehicle Electrification Market size was valued at USD 90.04 Billion in 2022 and is poised to grow from USD 98.86 Billion in 2023 to USD 208.86 Billion by 2031, at a CAGR of 9.8% during the forecast period (2024-2031).

The vehicle electrification market aims to tackle the urgent issues of environmental pollution and carbon emissions linked to traditional vehicles. With a global emphasis on reducing greenhouse gas emissions and addressing climate change, the market for electric vehicles is expanding. Governments worldwide are supporting this shift by enforcing stricter emission standards, offering incentives and subsidies for electric vehicle purchases, and developing comprehensive charging infrastructure. However, the market faces several challenges, notably the high initial cost of electric vehicles compared to their conventional counterparts. The expense of key components, especially batteries, remains a significant barrier, making electric vehicles less affordable for some consumers. Despite these challenges, the market holds considerable potential. The rising demand for electric vehicles is driving innovation and the advancement of electric vehicle components and systems. There is a growing need for enhanced battery technology, efficient charging solutions, and robust power management systems. Additionally, investment opportunities exist in expanding charging infrastructure and integrating renewable energy sources. The continuous advancement of electric vehicle technologies and infrastructure is set to shape the future of the vehicle electrification market, fostering a cleaner and more sustainable mobility landscape.

Top-down and bottom-up approaches were used to estimate and validate the size of the Global Vehicle Electrification market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Global Vehicle Electrification Market Segmental Analysis

The global vehicle electrification market is segmented based on Product type, vehicle type and degree of hybridization and region. In terms of hybridization, the market is segmented into internal combustion engine (ICE) & micro-hybrid vehicle, hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), battery electric vehicle (BEV) and 48 V vehicle. Based on vehicle type, the market is segmented into passenger car and light commercial vehicle. Based on product type, the market is segmented into start/stop system, electric power steering (EPS), electric air-conditioner compressor, electric vacuum pump, electric oil pump, electric water pump, liquid heater PTC, integrated starter generator (ISG), starter motor, alternator and actuator. Based on region, the market is widespread in North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

Drivers of the Global Vehicle Electrification Market

Environmental concerns and sustainability are increasingly influencing the vehicle electrification market. As awareness of the environmental impact of traditional combustion engines grows, there is a stronger push toward electric vehicles (EVs) as a cleaner alternative. This shift is motivated by the need to cut greenhouse gas emissions and combat climate change. Governments around the globe are supporting this transition through various incentives and regulations designed to promote EV adoption, which is driving market growth. Advancements in battery technology and improvements in charging infrastructure, coupled with rising fuel costs, are also accelerating the shift towards electric vehicles. Consumers are increasingly interested in electric and hybrid vehicles, appreciating the long-term benefits of sustainability and fuel efficiency. These factors are collectively fueling the market for vehicle electrification and reinforcing the drive towards more eco-friendly transportation solutions.

Restraints in the Global Vehicle Electrification Market

The limited availability of charging infrastructure continues to be a major obstacle for the broader adoption of electric vehicles. In 2023, this issue emerged as a critical barrier to market expansion, especially in areas where charging networks are insufficient and infrastructure development is lagging. This lack of widespread charging facilities hampers the growth of the electric vehicle market by making it difficult for consumers to access convenient charging options. As a result, regions with underdeveloped charging infrastructure face significant challenges in supporting the increased use of electric vehicles.

Market Trends of the Global Vehicle Electrification Market

A key driver in the vehicle electrification market is the ongoing enhancement of electric vehicle range and advancements in battery technology. Automakers are concentrating on improving battery energy density to extend driving ranges and alleviate range anxiety. Notable examples include Tesla's Model S Plaid, which offers a range exceeding 520 miles (837 km), and Hyundai's Ioniq 5, featuring advanced battery technology with a range of up to 300 miles (483 km). These technological improvements boost consumer confidence and are pivotal in accelerating the mainstream adoption of electric vehicles.