PUBLISHER: Stratistics Market Research Consulting | PRODUCT CODE: 1511300
PUBLISHER: Stratistics Market Research Consulting | PRODUCT CODE: 1511300
According to Stratistics MRC, the Global Electric Drive Unit Market is accounted for $24.16 billion in 2024 and is expected to reach $75.08 billion by 2030 growing at a CAGR of 20.8% during the forecast period. An essential part of both electric and hybrid cars are the electric drive unit (EDU), which transforms electrical energy from the battery into mechanical energy to move the wheels. It combines the electric motor, power electronics, and transmission, among other important systems, into a small, effective package. The power electronics control and optimize the torque produced by the electric motor to provide smooth acceleration and deceleration. Moreover, power and efficiency are balanced as the transmission adjusts the motor's output to the changing driving conditions.
According to the International Energy Agency (IEA), global electric vehicle sales reached over 10 million in 2022, marking a significant milestone in the transition towards sustainable transportation.
Growing interest in electric cars (EVs)
The adoption of electric vehicles is accelerating due to the global shift towards sustainability and a reduction in reliance on fossil fuels. Due to their lower operating costs and lower emissions, EVs are becoming more and more popular among individuals and businesses as consumer awareness of environmental issues grows. Additionally, projections indicate that over the next ten years, the market share of EVs is expected to grow significantly, indicating that this trend will continue. As a result, there is a corresponding rise in demand for EDUs, which are necessary for EV operation.
High start-up expense
Due to the high cost of parts like batteries and electric drive units (EDUs), the initial cost of electric vehicles (EVs) is still higher than that of conventional internal combustion engine vehicles. The price of raw materials like lithium for batteries and rare earth metals for motors continues to rise despite improvements in technology and manufacturing techniques. Furthermore, this cost difference has the potential to turn away buyers, particularly in price-sensitive markets, which would limit the expansion of the EDU market.
Development of sustainable energy sources
Electric vehicle charging is becoming more sustainable owing to the development of renewable energy sources like solar, wind, and hydroelectric power. The environmental advantages of EVs grow as renewable energy becomes a larger portion of the world's energy mix. Moreover, the demand for EDUs may increase as a result of the synergy between renewable energy and electric vehicles, which can make EVs more appealing to governments and environmentally conscious consumers.
Internal combustion engine competition
Internal combustion engine (ICE) vehicles continue to rule the global automotive markets despite the rise of electric vehicles (EVs). Because of their well-established infrastructure, cheaper initial costs, and perceived convenience, traditional gasoline and diesel-powered vehicles continue to garner the loyalty of many consumers. Additionally, the market for electric drive units (EDUs) is threatened by the sustained popularity of internal combustion engine (ICE) vehicles, which will prevent EVs from being widely adopted.
The automotive industry was significantly impacted by the COVID-19 pandemic, which also affected the market for electric drive units (EDUs). Global lockdowns and supply chain disruptions initially caused a precipitous drop in car sales and production, which affected both conventional and electric vehicles. In the face of economic uncertainty, consumer confidence declined, which reduced demand for new cars. Furthermore, as the pandemic spread, there was a discernible shift in favour of greener transportation options, such as electric cars, motivated by increased concern for environmental sustainability and public health.
The Battery Electric Vehicles (BEV) segment is expected to be the largest during the forecast period
In the market for electric drive units, battery electric vehicles (BEVs) presently have the largest share. Battery-electric vehicles (BEVs) do not require internal combustion engines because they run entirely on electricity stored in batteries. This market has grown quickly due to rising environmental consciousness, government subsidies for zero-emission cars, and developments in battery technology that lower costs and increase range. Moreover, major automakers are making significant investments in BEVs and increasing the range of electric vehicles they offer to satisfy stricter emissions regulations and growing consumer demand for environmentally friendly transportation options.
The Automotive segment is expected to have the highest CAGR during the forecast period
In the electric drive unit market, the automotive segment has the highest CAGR. Rising environmental regulations, battery technology breakthroughs, and consumer preference for environmentally friendly transportation options are all contributing factors to the global demand for electric vehicles (EVs), which is driving this growth. To meet strict emissions regulations and profit from the expanding trend towards cleaner energy solutions, automakers are heavily investing in electric drive trains. Additionally, a broad variety of automobiles, including passenger cars, trucks, and commercial vehicles, as well as specialty vehicles like electric buses and trucks, are included in the automotive segment of the Electric Drive Unit Market.
Asia-Pacific (APAC) holds the largest market share for electric drive units. Numerous factors contribute to this dominance, including the significant production and use of electric vehicles (EVs) in nations like South Korea, Japan, and China. APAC's market growth has accelerated due to government initiatives supporting electric mobility and significant investments in battery manufacturing and EV charging station infrastructure. Furthermore, the region's dominance in the electric drive unit market is also largely due to the existence of large automakers and technological developments in electric drive trains.
North America has the highest CAGR in the market for electric drive units. Tight emission limits, government subsidies encouraging the use of electric vehicles (EVs), and a reliable infrastructure for EV charging are driving this expansion. Owing to large manufacturer investments and developments in battery and electric drive train technologies, the United States and Canada are at the forefront of the electric vehicle market. Additionally, North America's need for electric drive units is being driven by rising consumer awareness of and preference for environmentally friendly transportation options.
Key players in the market
Some of the key players in Electric Drive Unit market include Schneider Electric, Fuji Electric, Dana Incorporated, Magna International Inc., BorgWarner Inc., Hitachi Automotive Systems, Emerson Electric, Robert Bosch GmbH, Mitsubishi Electric, Schaeffler AG, ABB, Nidec Corporation, Siemens, Continental AG, MAHLE Polska Sp. z o.o, ZF Friedrichshafen AG and Yaskawa Electric.
In February 2024, Schneider Electric, a digital energy and automation Manager Company recently announced its investment in a portfolio of Texas-based clean energy projects. Through this, it utilized a Tax Credit Transfer Agreement (TCTA) for solar and battery storage systems developed, built, and operated by ENGIE North America (ENGIE).
In November 2023, BorgWarner has reached an agreement with a major global OEM to supply its 400V high voltage coolant heaters (HVCH) for the automaker's European light vehicle program. The anticipated start of production for the HVCH technology is in 2026. This business win marks the second HVCH contract secured with the global automaker over the course of two months, with the wins spanning different regions.
In August 2023, Emerson announced a definitive agreement to acquire FLEXIM Flexible IndustriemeBtechnik GmbH ("Flexim"), a global leader in clamp-on ultrasonic flow measurement for liquids, gases and steam. Headquartered in Berlin, Germany, Flexim brings highly differentiated, complementary technology and strong customer relationships to Emerson, with an installed base of more than 100,000 flowmeters, as well as approximately 450 employees.