The vehicle electrification market incorporates products enabling hybridization and electrification of vehicles including electric motors, batteries, battery management systems, on-board chargers, inverters, and motor controllers. Hybrid electric vehicles combine an internal combustion engine with an electric propulsion system to improve fuel efficiency in gasoline-powered vehicles by capturing energy lost during deceleration and using it to assist the engine or power the vehicle alone for short distances. Fully electric vehicles utilize high-capacity battery packs and more powerful electric motors and drivetrains to allow vehicles to operate solely on electrical energy for extended driving ranges.
The global vehicle electrification market is estimated to be valued at US$ 97.25 Mn in 2023 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Governments around the world have been focusing on policies promoting adoption of electric vehicles and hybrid vehicles to curb vehicular pollution and dependence on fossil fuels. Several countries have implemented financial incentives like tax credits and subsidies for purchasing electric vehicles along with building out public charging infrastructure. Moreover, stringent corporate average fuel economy (CAFE) standards set by regulatory agencies are forcing automakers to hybridize and electrify their vehicle offerings. For example, the United States finalized new CAFE standards for model years 2024–2026 requiring fleetwide averages of 43.3 mpg in 2026, with even more stringent rules being planned through 2030. This driver to comply with environmental regulations and goals is supportingrising adoption of electrifiedpowertrains across all major vehicle categories.
Additionally, technological advancements enablingbetter battery energy density and charging capability at lower costs are also fueling higher electric vehicle uptake. Improved lithium-ion battery chemistries are resulting in electric vehicles with driving ranges comparable to gas-powered vehicles at competitive price points, addressing key consumer barriers like range anxiety. Meanwhile, faster charging technologies are enhancing user experience and convenience of electric mobility. As battery and electric powertrain technology continues to progress, costs are expected to decline further, making electric vehicles increasingly competitive against conventional vehicles and further stimulating demand in the global vehicle electrification market over the forecast period.
The vehicle electrification market can be segmented into hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs). The BEVs segment dominated the market in 2024 and is expected to continue its dominance over the forecast period. Various governments globally are providing subsidies and incentives for BEV purchases to promote clean mobility and reduce dependence on fossil fuels. Many leading automakers are also heavily investing in BEV development and production to comply with stringent emission norms.
Political: Governments across regions like Europe, China, US are implementing strict emission regulations and providing subsidies to promote sales of electric vehicles. This is positively impacting the growth of vehicle electrification market.
Economic: Rising fuel prices and lower operating costs of electric vehicles are encouraging consumers to switch from conventional to electric vehicles. The total cost of ownership of EVs is lower compared to gasoline vehicles, driving their adoption.
Social: Increasing environmental concerns regarding pollution and global warming is raising demand for greener transportation solutions. Many consumers now prefer electric vehicles to reduce their carbon footprint.
Technological: Automakers are heavily investing in battery technology advancements to increase vehicle range on a single charge. Technologies like fast charging are improving electric vehicle infrastructure and addressing range anxiety issues.
The Global Vehicle Electrification Market Demand is expected to witness high growth over the forecast period. The global vehicle electrification market is estimated to be valued at US$ 97.25 Mn in 2023 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2031.
Asia Pacific region dominated the market in 2024 and is expected to witness the fastest growth during the forecast period. China is the largest market for electric vehicles currently due to supportive policies and dedicated investments by automakers to promote clean mobility.
Key players operating in the vehicle electrification market are AMETEK Inc., Alleima, Teshima International Corporation, Om Steel Tubes Ltd., Tech Tube, Inc., Bison Stainless Tube, LLC, Vita Needle Company, M&M International, Fuji Seiko, Accu-Tube, Eagle Stainless Tube & Fabrication, Inc., Forefront Medical Technologies, Minitubes, Teleflex Incorporated, VIANT, and K-Tube Technologies. Key players are focusing on production capacity expansion, new product development and collaborations to gain market share in the growing electric vehicle industry.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it