Electric & Hybrid Vehicle Driveline Market Size, Share, Growth & Industry Analysis, By Type (Battery Electric Vehicle Driveline (BEV), Plug-in Hybrid Electric Vehicle Driveline (PHEV), Hybrid Electric Vehicle Driveline (HEV)), By Component (Electric Motor, Power Electronics, Battery, Transmission, Others), By Vehicle Type (Passenger Cars, Commercial Vehicles), and Regional Analysis, 2024-2031

Electric & Hybrid Vehicle Driveline Market: Global Share and Growth Trajectory

The global Electric & Hybrid Vehicle Driveline Market size was valued at USD 36.82 billion in 2023 and is projected to grow from USD 41.98 billion in 2024 to USD 99.10 billion by 2031, exhibiting a CAGR of 13.1% during the forecast period.

The global electric and hybrid vehicle driveline market is experiencing substantial growth, driven by the growing adoption of electric vehicles (EVs) and hybrid electric vehicles (HEVs), advancements in driveline technologies, and increasing demand for sustainable transportation solutions.

The driveline system, which is responsible for transferring power from the engine or electric motor to the wheels, is a key component in both electric and hybrid vehicles.

This market encompasses a wide range of driveline components, such as electric motors, power electronics, transmissions, and axles, all designed to optimize vehicle performance and energy efficiency.

As governments worldwide impose stricter emission regulations and offer incentives for EV and HEV adoption, the demand for advanced driveline systems has surged. The transition from traditional internal combustion engine (ICE) vehicles to electric and hybrid alternatives is further fueling the growth of the market.

Electric and hybrid driveline systems are designed to offer improved power output, enhanced energy efficiency, and increased driving range, addressing some of the key challenges faced by electric vehicles, such as range anxiety and longer charging times.

Technological advancements in driveline systems are focused on improving performance, efficiency, and integration of components such as electric motors, power electronics, and advanced transmission systems.

Innovations such as all-wheel-drive electric systems, multi-speed transmissions, and dual-motor configurations are expected to significantly enhance the driving experience of electric and hybrid vehicles.

Furthermore, the incorporation of regenerative braking systems, which recover energy during braking, is playing a crucial role in enhancing the overall efficiency of these drivetrains.

The increasing demand for electric and hybrid vehicles in regions such as North America, Europe, and Asia-Pacific is propelling the growth of the driveline market. Countries like China, the United States, and several European nations are leading the way in the adoption of EVs and HEVs, contributing significantly to the market expansion.

Additionally, advancements in 5G technology and the growth of autonomous vehicles are expected to create new opportunities for advanced driveline systems that can support future mobility solutions.

Looking ahead, the electric and hybrid vehicle driveline market is expected to continue its robust growth trajectory, driven by the rising adoption of electric and hybrid vehicles, ongoing technological innovations, and a growing emphasis on sustainable and energy-efficient transportation solutions.

As automakers strive to deliver more affordable, high-performance electric and hybrid drivetrains, the market is set for continued expansion through 2031 and beyond.

Key Market Trends Driving Product Adoption

Several factors are contributing to the growth of the electric and hybrid vehicle driveline market, including:

• Increasing Electrification of Vehicles: With the automotive industry undergoing a major transformation toward electric and hybrid technologies, driveline components tailored for these vehicles are in high demand. The shift towards BEVs (Battery Electric Vehicles) and HEVs (Hybrid Electric Vehicles) is creating a significant need for advanced driveline systems that deliver enhanced performance, reliability, and efficiency.
• Government Regulations and Incentives: Governments around the world are implementing stricter emission standards and offering incentives to promote the adoption of electric and hybrid vehicles. These regulations are encouraging automakers to integrate electric drivetrains into their vehicle models, fueling market growth.
• Technological Advancements in Drivetrain Components: Innovation in key driveline components, such as electric motors, inverters, and batteries, is driving the demand for electric and hybrid vehicle drivetrains. These technologies are improving the range, performance, and efficiency of electric and hybrid vehicles, making them increasingly attractive to consumers.
• Consumer Shift Toward Sustainability: Growing environmental awareness and a preference for eco-friendly vehicles are motivating consumers to adopt electric and hybrid vehicles. The development of driveline solutions that enhance the driving experience while minimizing the environmental impact is a key factor behind the growth of the market.

Major Players and their Competitive Positioning

The electric and hybrid vehicle driveline market is quite competitive with many leading players actively engaged in research and development to create innovative efficient driveline technologies.

Many high-profile companies included in this market are Bosch, ZF Friedrichshafen, Aisin Seiki, Magna International and Valeo.

These major players are engaged in the development of advanced driveline solutions that will support the requirements and changes required for electric and hybrid vehicles.

These vehicles incorporate a multitude of different technology components such as electric motors, transmission systems, power electronics and battery management systems. Partnerships are also being established with manufacturers to expand their product capabilities and position them within the market.

Consumer Behavior Analysis

Consumers are increasingly opting for electric and hybrid vehicles due to several factors, including:

• Environmental Concerns: The wish to lower carbon footprints and push for sustainability is making people choose electric and hybrid cars. These cars, with electric engines, give off less compared to traditional gas-powered cars and attract those who care about the environment.
• Cost Savings: The lower costs of electric and hybrid vehicles, including what you save on gas and upkeep, is a big reason why more people are buying them. As the prices of electric cars drop and there are more places to charge them, people see that these cars cost less over time.
• Performance and Efficiency: More and more people are drawn to electric and hybrid cars because of their better performance features. These include quick power, smooth rides, and great gas mileage.
• Government Incentives: Government perks, like tax breaks, discounts, and freedom from tolls or road taxes, are making electric and hybrid vehicles more appealing in terms of cost to buyers, which increases demand.

Pricing Trends

Electric and hybrid vehicle differ depending on the type of driveline technology and components of components in the vehicle drive market. Electric drivetrain is more expensive than traditional driveline due to the cost of electric motor, battery pack and power electronics.

However, such as progression in technology reduces production costs and scale economies come in sports, prices are expected to decrease for electric and hybrid vehicle driveline system. Premium electric vehicle models take over high prices equipped with upgraded driveline components such as all-wheel-drive (AWD) electric motors and high-capacity batteries.

In the years ahead as expectedly anticipated​ the prices of hybrid and electric drivetrains are set to enhance​​​ significantly thus making them more accessible to a broader range of consumers. This growth is driven by the adoption of electric and hybrid vehicle technologies​​​ advancements in driveline components​​​ and supportive governmental policies​​​. 

Growth Factors

The electric and hybrid vehicle driveline market is fueled by several key growth drivers:

• Electrification of Automotive Fleet: As global automakers expand their electric and hybrid vehicle offerings, the demand for advanced driveline technologies will continue to rise.
• Government Regulations and Supportive Policies: The implementation of stringent emission standards and government subsidies for electric vehicle purchases will drive the adoption of electric and hybrid drivetrains.
• Advances in Battery Technology: Ongoing improvements in battery technology, including enhanced energy density, faster charging times, and longer lifespan, are expected to boost the performance and efficiency of electric drivetrains, encouraging greater adoption of electric and hybrid vehicles.
• Consumer Preference for Eco-Friendly Vehicles: Growing consumer preference for environmentally friendly vehicles will continue to fuel the demand for electric and hybrid driveline systems.

Regulatory Landscape

The regulatory environment plays an important role in shaping the electric and hybrid vehicle drives market. The European Union's CO2 emission goals and stringent emission rules, including various government incentives to adopt electric and hybrid vehicles, are running market development.

These rules encourage vehicle manufacturers to invest in electric drives and promote infections from traditional internal combustion engines to electric and hybrid solutions.

Recent Developments

The electric and hybrid vehicle driveline market is experiencing major developments, including:

• Partnerships and Collaborations: The shift toward electric mobility is backed by partnerships between automakers and driveline component manufacturers for developing advanced electric drivetrains. Prominent collaborations including those between traditional automakers and technology firms mainly focus on electric drivetrain innovation.
• Technological Innovations: Developments in electric motor design, battery management systems, and power electronics are encouraging the innovation of effective and powerful driveline systems, optimizing the performance of electric and hybrid vehicles.
• Expansion of Charging Infrastructure: The extension of EV charging infrastructure is necessary for opting electric drivetrains, as it improves the convenience and makes electric vehicles easy to use for consumers.

Current and Potential Growth Implications

Demand-Supply Analysis
The demand for electric and hybrid drivetrains will grow a lot in the coming years. The market grows and governments cut emissions. The supply of driveline parts may struggle because production capacity is low, especially for key parts like batteries and power electronics. More investment in production and new technology must be made to match demand.

Gap Analysis

Even with the electric and market witnessing a substantial increase, various challenges still exist:

• Component Cost: Widespread prevalence of electric drivelines might be restrained by the excessive production costs related to batteries and electric motors.
• Infrastructure Needs: Even with the electric vehicle charging infrastructure rapidly advancing, additional investments in public charging networks are important for supporting the expansion of the electric vehicle market.

Top Companies in the Electric & Hybrid Vehicle Driveline Market

• Bosch
• ZF Friedrichshafen
• Aisin Seiki
• Magna International
• Valeo
• Denso
• GKN Automotive
• BorgWarner
• Continental AG
• Hyundai Mobis

Electric & Hybrid Vehicle Driveline Market: Report Snapshot

Electric & Hybrid Vehicle Driveline Market: High Growth Segments

The following segments are anticipated to see a remarkable increase:

• Battery Electric Vehicle (BEV) Drivetrain: With BEVs being in charge of the electric vehicle market, the demand for advanced BEV drivetrains is likely to surge.
• Hybrid Electric Vehicle (HEV) Drivetrain: The adoption of HEVs is anticipated to grow because of their dual powertrain, which caters to consumers who are not fully ready to completely shift toward electric vehicles.

Major Innovations

The market is fuelled by developments, which features key innovations such as:

• High-Efficiency Electric Motors: New improvements in electric motor efficiency boost performance and range for electric and hybrid vehicles.
• Battery Management Systems: New battery management systems improve battery performance charging speed as well as lifespan. This change makes electric drivetrains more practical and cost-effective.

Electric & Hybrid Vehicle Driveline Market:

Substantial opportunities for growth that are still present in the market, particularly in the following segments:

• Battery Electric Vehicle Adoption: The growth of BEVs will continue to fuel the demand for latest driveline components like electric motors which deliver high-performance and power electronics.
• Hybrid Vehicle Market Growth: Hybrid vehicles, specifically plug-in hybrids, are still necessary for fully moving toward electric vehicles. They offer growth opportunities for driveline manufacturers.

Kings Research says:

Propelled by enhancements in technology, government subsidies, and the increase in demand from consumers for sustainable cars, the electric and hybrid car driveline market could experience a substantial development. Ideally positioned to take benefits from the rising market for electric and hybrid drivetrains, businesses are widening their range of products and significantly putting money in developments.