Electric Powertrain Market Size, Share, Growth & Industry Analysis, By Component (Battery, Motor/Generator, Power Electronics Controller & Others), By Propulsion (Battery Electric Vehicle (BEV), Hybrid Electric Vehicle (HEV), Plug-in Hybrid Electric Vehicle (PHEV)), By Drive, By Vehicle, and Regional Analysis, 2024-2031

Market Definition

An electric powertrain is a system in electric and hybrid vehicles that generates, manages, and delivers power to the wheels using electrical energy instead of a traditional internal combustion engine. 

It consists of key components, including a battery pack for energy storage, an electric motor for power conversion, and power electronics (inverter and converter) to regulate electricity flow. A transmission system, often a single-speed reducer, transfers power efficiently to the wheels.

Electric Powertrain Market Overview

The global electric powertrain market size was valued at USD 93.89 billion in 2023 and is projected to grow from USD 106.13 billion in 2024 to USD 262.52 billion by 2031, exhibiting a CAGR of 13.81% during the forecast period. 

This market is experiencing rapid growth, driven by the increasing need for electric vehicles (EVs), advancements in battery technology, and supportive government policies promoting clean energy transportation. Rising environmental concerns and stringent emission regulations worldwide have prompted automakers to invest in electric mobility. 

Significant improvements in battery efficiency, energy density, and cost reduction are enhancing the affordability and performance of EVs, making them more attractive to consumers.

Major companies operating in the electric powertrain market are Robert Bosch GmbH, Mitsubishi Group, Magna International Inc., BYD Europe B.V., Volkswagen AG, General Motors, Ford Motor Company, Cummins Inc., ZF Friedrichshafen AG, DENSO CORPORATION, Panasonic Holdings Corporation, Lucid Group, Inc., Continental AG, BorgWarner Inc., and Hitachi, Ltd.

Additionally, advancements in power electronics, such as inverters and motor control systems, are optimizing vehicle efficiency and driving range. The expansion of charging infrastructure and innovations in fast-charging technology are contributing to the widespread adoption of EVs, boosting market expansion.

Moreover, increased investment in research and development by automotive manufacturers and technology companies is accelerating the introduction of next-generation powertrain solutions, including solid-state batteries and high-efficiency electric motors. 

The growing interest in hybrid and plug-in hybrid vehicles, along with fully electric models, is expanding the market scope, catering to diverse consumer preferences.

• In November 2024, Ceer partnered with Rimac Technology to supply high-performance, fully integrated Electric Drive Systems (EDS) and powertrain solutions for its upcoming EVs. The collaboration aims to equip Ceer’s flagship vehicles with advanced electric powertrain systems, marking Rimac’s first partnership in the Gulf Cooperation Council region.

Key Highlights:

1. The electric powertrain industry size was valued at USD 93.89 billion in 2023.
2. The market is projected to grow at a CAGR of 13.81% from 2024 to 2031.
3. North America held a share of 33.78% in 2023, with a valuation of USD 31.72 billion.
4. The battery segment garnered USD 26.08 billion in revenue in 2023.
5. The battery electric vehicle (BEV) segment is expected to reach USD 101.07 billion by 2031.
6. The rear-wheel segment is expected to reach USD 101.07 billion by 2031.
7. The passenger cars segment is expected to reach USD 151.73 billion by 2031.
8. The market in Asia Pacific is anticipated to grow at a CAGR of 14.80% over the forecast period.

Market Driver

"Regulatory Support and Battery Innovations"

The electric powertrain market is experiencing significant growth, driven by emission regulations, government incentives, and advancements in battery technology. Governments worldwide are enforcing stricter emission norms and promoting sustainable transportation through subsidies, tax credits, and incentives for EV adoption. 

This has enabled automakers to accelerate the development of advanced electric powertrains to meet regulatory standards while reducing carbon emissions. Additionally, continuous advancements in battery technology, such as improved energy density, enhanced charging speed, and declining production costs, are making EVs more efficient and affordable. 

The decreasing cost of lithium-ion batteries, along with innovations in battery management systems, is further boosting the widespread adoption of electric powertrains across passenger and commercial vehicle segments.

• In February 2025, the BMW Group unveiled its sixth-generation electric powertrain technology, showcasing advancements in high-voltage batteries and electric drive systems. The new Gen6 powertrain features a 30% faster charging speed, a 30% increase in range, and 800V technology, offering significant improvements in efficiency and flexibility.

Market Challenge

"High Cost and Infrastructure Limitations"

The electric powertrain market faces several challenges despite its rapid growth, with high initial costs and charging infrastructure limitations being two key obstacles. The high cost of electric powertrain components, particularly batteries and power electronics, remains a major challenge in the widespread adoption of electric vehicles (EVs). 

Batteries, particularly lithium-ion variants, account for a significant portion of an EV’s total cost due to expensive raw materials such as lithium, cobalt, and nickel, as well as complex manufacturing processes. Additionally, power electronics, including inverters and converters, require advanced semiconductor materials that contribute to higher production expenses. 

These high costs make EVs more expensive than traditional internal combustion engine vehicles, potentially limiting their accessibility to price-sensitive consumers. 

However, continuous advancements in battery technology, economies of scale in production, and government subsidies are reducing costs, making EVs more competitive with traditional internal combustion engine vehicles.

Another significant challenge is the lack of widespread charging infrastructure, which limits the convenience and accessibility of electric vehicles (EVs), particularly in developing regions. Unlike conventional fuel stations, EV charging networks are still in the early stages of expansion, leading to concerns about range anxiety among consumers. 

The availability of charging stations varies significantly across urban and rural areas, with many regions lacking sufficient public charging points. To address this challenge, governments and private companies are investing heavily in expanding charging networks, deploying fast-charging stations, and integrating smart grid solutions.

Market Trend

"Technological Advancements and Energy Optimization"

The electric powertrain market is evolving rapidly, characterized by advancements in technology and innovation in energy management systems. The integration of artificial intelligence (AI) in powertrain components is enhancing vehicle efficiency, optimizing energy distribution, and enabling predictive maintenance, leading to improved performance and extended battery life. 

AI-driven solutions are enabling manufacturers to develop more intelligent and adaptive EV systems that maximize range and energy utilization.

Additionally, the increasing focus on next-generation battery technologies is revolutionizing electric powertrains by offering higher energy density, faster charging capabilities, and improved safety compared to traditional lithium-ion batteries. These advancements are significantly enhancing vehicle performance and reducing reliance on scarce raw materials.

• In June 2024, Ansys launched ConceptEV, a cloud-native Software-as-a-Service (SaaS) solution designed to optimize the development of EV powertrains. It facilitates collaboration on key components, such as battery, inverter, motor, and transmission, to improve driving range, reduce charge times, and lower development costs.

Electric Powertrain Market Report Snapshot

Market Segmentation

• By Component (Battery, Motor/Generator, Power Electronics Controller, Transmission, and Converter): The battery segment earned USD 26.08 billion in 2023 due to the growing adoption of high-capacity lithium-ion batteries and continuous innovations in energy storage technology.
• By Propulsion (Battery Electric Vehicle (BEV), Hybrid Electric Vehicle (HEV), and Plug-in Hybrid Electric Vehicle (PHEV): The battery electric vehicle (BEV) segment held a share of 38.45% in 2023, propelled by increasing production capacity, favorable government policies, and consumer shift toward zero-emission vehicles.
• By Drive (Front-wheel, Rear-wheel, and All-wheel): The rear-wheel segment is projected to reach USD 101.07 billion by 2031, owing to its efficiency in power distribution, enhanced driving dynamics, and rising adoption in premium and performance EVs.
• By Vehicle (Passenger cars, Commercial vehicles): The passenger cars segment is estimated to generate a revenue of USD 151.73 billion by 2031, fueled by continuous electrification efforts, expanding model availability, and increasing affordability of EVs.

Electric Powertrain Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

North America electric powertrain market accounted for a substantial share of 33.78% in 2023, valued at USD 31.72 billion. This dominance is attributed to strong government support, stringent emission regulations, and the presence of key automotive manufacturers investing in EV technology. 

The widespread adoption of EVs, coupled with an expanding charging infrastructure and advancements in battery and powertrain technologies, has further strengthened North America's position as the leading market for electric powertrains. 

Additionally, rising consumer awareness regarding sustainability and favorable incentives such as tax credits and subsidies have contributed to this growth. The United States contributes significantly to thus expansion, with automakers increasing their EV production capacities.

Asia Pacific electric powertrain industry is expected to register the fastest CAGR of 14.80% over the forecast period. This growth is fostered by increasing investments in advanced battery technologies, expanding EV production capacities, and strong government support for electrification. 

A well-established supply chain, encompassing battery manufacturing and power electronics development, is accelerating regional market expansion. Rising consumer demand for electric vehicles, coupled with ongoing infrastructure improvements such as charging networks and energy-efficient powertrain systems, is further propelling growth. 

Additionally, technological advancements in motor efficiency, energy storage, and thermal management systems are enhancing vehicle performance, making electric powertrains more appealing across various automotive segments.

• In February 2025, EKA Mobility and KPIT Technologies entered into a Memorandum of Understanding to develop and integrate advanced electric powertrain technology components. The collaboration aims to enhance efficiency, performance, and sustainability in India's electric commercial vehicle industry. It further focuses on developing key electric powertrain systems, including traction motors, controllers, vehicle control units, and battery management systems, tailored for EKA’s electric buses and commercial vehicles.

 Regulatory Framework

• In the U.S., the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) regulate electric powertrains under emissions and fuel economy standards, such as the Corporate Average Fuel Economy (CAFE) regulations.
• In Europe, the European Commission (EC) and the European Automobile Manufacturers’ Association (ACEA) oversee electric powertrain regulations under the Euro 7 emissions standards and Vehicle Type Approval (WVTA) framework. The United Nations Economic Commission for Europe (UNECE) establishes global technical standards, which define safety requirements for electric powertrains and batteries.
• In China, the Ministry of Industry and Information Technology (MIIT) and the China Automotive Technology and Research Center (CATARC) regulate electric powertrains through New Energy Vehicle (NEV) regulations and standards for battery and motor performance.
• In Japan, the Ministry of Economy, Trade and Industry (METI) and the Japan Automotive Research Institute (JARI) establish safety and efficiency standards for electric powertrains. The Society of Automotive Engineers of Japan (JSAE) sets technical specifications to enhance vehicle performance and reliability.
• In India, the Ministry of Road Transport and Highways (MoRTH) and the Automotive Research Association of India (ARAI) regulate electric powertrains under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) policy and AIS (Automotive Industry Standards) guidelines. The Bureau of Indian Standards (BIS) ensures safety and performance compliance for key powertrain components such as batteries and motors.

Competitive Landscape

The electric powertrain industry is characterized by a large number of participants, including both established corporations and emerging players. Market participants are heavily investing in research and development to enhance battery performance, improve energy efficiency, and optimize power electronics. 

Companies are increasingly engaging in strategic collaborations, partnerships, and mergers to strengthen technological expertise and expand market presence.

With increasing demand for electric vehicles, manufacturers are concentrating on developing high-performance motors, advanced inverters, and next-generation battery management systems to gain a competitive edge. Additionally, the adoption of lightweight materials and improved thermal management solutions is driving innovation in electric powertrain components. 

Companies are enhancing their production capacities and expanding supply chain networks to accommodate the rising demand for electrification in various vehicle segments.

• In February 2025, Magna and Mercedes-Benz expanded their long-term innovation partnership to develop and produce the all-new electric model of Mercedes-Benz’s iconic off-roader. The collaboration focuses on Magna’s eDS Duo, a 2-speed, dual e-motor electric powertrain designed for superior off-road performance and efficiency.

List of Key Companies in Electric Powertrain Market:

• Robert Bosch GmbH
• Mitsubishi Group
• Magna International Inc.
• BYD Europe B.V.
• Volkswagen AG
• General Motors
• Ford Motor Company
• Cummins Inc.
• ZF Friedrichshafen AG
• DENSO CORPORATION
• Panasonic Holdings Corporation
• Lucid Group, Inc.
• Continental AG
• BorgWarner Inc.
• Hitachi, Ltd.  

Recent Developments (Expansion/Partnerships/Collaboration/Merger)

• In February 2025, Stellantis expanded its hybrid powertrain offerings to  meet growing customer demand in Europe. The company will offer 30 hybrid models in Europe, with six more launching by 2026. The hybrid models feature innovative electrified dual-clutch transmissions (eDCT), enhancing performance while improving fel economy by up to 20%  and reducing CO2 emmission compared to internal combustion powertrains.
• In September 2024, Schaeffler and Vitesco Technologies announced their continued collaboration to advance powertrain and chassis solutions for the transportation sector’s transition to sustainability. The partnership focused on developing innovations for battery electric vehicles, fuel cell drives, and internal combustion engines. Schaeffler presented cutting-edge technologies such as permanent-magnet electric motors, fuel cell stacks, and 800-volt power electronics.
• In May 2024, Renault Group and Geely established HORSE Powertrain Limited, a new company specializing in hybrid and combustion powertrain solutions. HORSE Powertrain will design, develop, and sell advanced technologies, including hybrid systems, internal combustion engines, transmissions, and battery solutions. Renault Group will contribute its expertise in developing low-emission solutions, including hybrid systems and ultra-low emission internal combustion engines.
• In April 2024, Valeo launched Valeo Power, a new division formed by merging its former Powertrain Systems and Thermal Systems business groups. The division focuses on advancing electrification through powertrain and thermal management systems to enhance vehicle range, performance, and comfort.