Global Automotive Powertrain Market By Propulsion Type(IC Engine, Gasoline, Diesel, Natural Gas Vehicle, Electric Vehicle, BEV, PHEV), By Vehicle Type(Passenger Vehicle, Commercial Vehicle), By Region And Key Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends And Forecast 2024-2033

Report Overview

The Global Automotive Powertrain Market size is expected to be worth around USD 1,541.2 Billion by 2033, from USD 828.8 Billion in 2023, growing at a CAGR of 6.4% during the forecast period from 2024 to 2033.

The global Automotive Powertrain Market encompasses components like engines, transmissions, and drivetrains in vehicles. It plays a pivotal role in determining a vehicle’s performance, efficiency, and emissions, and it is influenced by factors like technological advancements and environmental regulations.

Key Takeaways

• Market Growth: The Global Automotive Powertrain Market size is expected to be worth around USD 1,541.2 Billion by 2033, from USD 828.8 Billion in 2023, growing at a (CAGR) of 6.40%.
• By Propulsion Type Analysis: In 2023, The Automotive Powertrain Market is characterized by propulsion type holding a dominant share of 87.5%.
• By Vehicle Type Analysis: In 2023, Passenger Vehicles held a dominant market position, capturing more than a 75.1% share.
• Asia Pacific dominating the global market with a commanding 61.6% share in 2023, the Asia-Pacific region is at the forefront of automotive powertrain market innovation.

The Automotive Powertrain Market encompasses the critical components responsible for transmitting the engine’s power to the vehicle’s wheels, including engines, transmissions, driveshafts, differentials, and final drive. This market is pivotal for the automotive industry, as it directly impacts vehicle performance, efficiency, and emissions. Innovations in this sector are increasingly geared towards enhancing fuel efficiency and reducing environmental impact, with a significant shift towards electrification and hybrid technologies.

The Automotive Powertrain Market is at a pivotal juncture, underscored by the accelerated transition towards more sustainable and efficient powertrain technologies. The year 2022 marked a significant shift in consumer preferences and regulatory pressures, with trucks constituting 63% of new vehicle sales under the EPA’s light-duty greenhouse gas (GHG) regulations, compared to 37% for cars. This data underscores a notable trend towards larger vehicles, which presents both challenges and opportunities for the powertrain market in terms of emissions and fuel efficiency improvements.

Furthermore, the environmental impact of vehicle production, especially concerning battery electric vehicles (BEVs), is increasingly under scrutiny. Producing a BEV results in approximately 8.8 tonnes of CO2 emissions, compared to 5.6 tonnes for a medium-sized petrol or diesel car. This stark difference highlights the importance of not only advancing powertrain technologies but also improving the overall sustainability of vehicle manufacturing processes.

In this context, the market is witnessing a significant push towards electrification, hybridization, and the development of more efficient internal combustion engine (ICE) systems. Manufacturers are investing heavily in research and development to introduce powertrain solutions that meet stringent emission standards, enhance fuel economy, and reduce carbon footprints.

Driving Factors

Enhanced Efficiency: A Response to Rising Fuel Consumption Concerns

The growing pressure to reduce fuel consumption remains a primary catalyst for the evolution of the Automotive Powertrain Market. This demand for efficiency is driving the development of advanced powertrain systems designed to optimize fuel usage and enhance vehicle performance. Innovations in engine technology, transmission systems, and hybrid powertrains are being accelerated to meet these needs.

These advancements not only cater to consumer demands for more fuel-efficient vehicles but also align with global sustainability goals. As fuel prices fluctuate, the impetus for developing powertrain systems that can deliver higher efficiency with lower fuel consumption becomes even more pronounced, underpinning the market’s growth trajectory.

Regulatory Compliance: Steering the Shift towards Lower Emissions

Strict government regulations on carbon emissions are significantly influencing the automotive industry, compelling companies to align with stricter pollution standards. This regulatory environment is fostering a shift towards electrification and the adoption of cleaner, more sustainable powertrain technologies.

The U.S. Environmental Protection Agency (EPA) is proposing its most ambitious new regulations yet for cutting vehicle emissions, with the belief that companies will need to produce 67% zero-emission vehicles to meet them. The proposed standards would eliminate 7.3 billion tons of CO2, equivalent to four years’ worth of the entire U.S. transportation sector, and save lives through reduced air pollution.

For instance, the implementation of Euro 6 standards in Europe and CAFE standards in the United States exemplifies how legislative pressures are shaping market dynamics, pushing manufacturers to innovate and reduce the carbon footprint of their vehicles. The move towards electric vehicles (EVs) and hybrid powertrains is not merely a compliance strategy but a fundamental shift in vehicle design and manufacturing, propelling the market towards greener alternatives.

Economic Variables: Shaping Market Dynamics through Cost Factors

Fluctuations in fuel and raw material prices are pivotal in steering the development of powertrain systems and vehicle architectures. The cost of raw materials, including rare earth elements essential for battery production in electric and hybrid vehicles, directly impacts manufacturing costs and, ultimately, the market price of vehicles. Similarly, fuel price volatility affects consumer preferences, driving demand for more fuel-efficient and alternative fuel vehicles.

This economic variable encourages automotive manufacturers to prioritize the development of powertrains that can mitigate these cost pressures, such as through the adoption of lightweight materials and the exploration of more cost-effective hybrid and electric powertrain solutions. The interplay between these economic factors and technological innovation continues to shape the evolution of the automotive powertrain landscape, influencing both market strategies and consumer choices.

Restraining Factors

Charging Infrastructure Scarcity Stifles Electrification Progress

The lack of charging infrastructure in various regions globally poses a significant barrier to the widespread adoption of electric vehicles (EVs), directly impacting the growth of the automotive powertrain market. This scarcity hinders consumer adoption due to range anxiety and convenience concerns, as potential EV owners fear being stranded without charging options. The deployment of EVs is crucial for the shift towards cleaner, more sustainable powertrain technologies.

Technical Complexities Challenge Powertrain Innovation

The development and integration of advanced powertrain components such as e-drives, transmissions, batteries, and fuel cell powertrains present formidable technical challenges. These obstacles are pivotal in shaping the automotive powertrain market’s trajectory. Engineering teams face the daunting task of creating systems that are not only efficient and reliable but also cost-effective and scalable for mass production. Each component—from battery technology improvement for longer ranges to the integration of fuel cells for quicker refueling times—requires significant R&D investment and innovation.

By Propulsion Type Analysis

The Automotive Powertrain Market is characterized by propulsion type held by a dominant share of 87.5%. Others include Internal Combustion (IC) Engine vehicles, gasoline, diesel, and natural gas vehicles. This traditional propulsion type underscores the market’s current infrastructure and consumer preference.

However, the Electric Vehicle (EV) segment, comprising Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs), is emerging as a significant force, reflecting a shift towards more sustainable and environmentally friendly transportation options.

By Vehicle Type Analysis

In 2023, Passenger Vehicles held a dominant market position, capturing more than a 75.1% share. The segment’s prominence is attributed to rising consumer demand for personal mobility solutions and significant advancements in electric and hybrid vehicle technologies. Investments in EV infrastructure and favorable government policies have further bolstered growth.

The Commercial Vehicle segment, although smaller in market share compared to passenger vehicles, experienced substantial growth due to increased demand for transportation and logistics services. Innovations in fuel efficiency and emissions reduction in heavy-duty vehicles have also contributed to the segment’s expansion, reflecting a growing emphasis on sustainable commercial transportation solutions.

Key Market Segments

By Propulsion Type

• IC Engine
• Gasoline
• Diesel
• Natural Gas Vehicle
• Electric Vehicle
• BEV
• PHEV

By Vehicle Type

• Passenger Vehicle
• Commercial Vehicle

Growth Opportunities

Rising Demand for Electric Vehicles and Hybrid Powertrains

One of the primary growth drivers for the automotive powertrain industry in 2023 is the increasing demand for electric vehicles (EVs) and hybrid powertrains. As governments and consumers worldwide place a greater emphasis on reducing carbon emissions and embracing sustainable transportation options, automakers are responding by accelerating their electric vehicle offerings.

This transition necessitates significant changes in powertrain technology, with a focus on electric motors and advanced battery systems. As a result, the automotive powertrain market is experiencing a surge in demand for components and systems that support EVs and hybrid vehicles. This trend is expected to persist as automakers continue to expand their electric vehicle portfolios to meet environmental regulations and consumer preferences.

Growing Consumer Spending Power, Demand for Cutting-Edge Automobiles, and Updated Systems

Another pivotal factor driving opportunities in the automotive powertrain market is the increasing spending power of consumers. As economies recover and incomes rise, consumers are displaying a strong appetite for cutting-edge automobiles equipped with advanced powertrain technologies. This includes not only electric and hybrid vehicles but also internal combustion engine (ICE) vehicles that feature improved fuel efficiency and reduced emissions.

Consumers are seeking vehicles that offer superior performance, enhanced fuel economy, and reduced environmental impact. Consequently, automakers are investing in research and development to meet these demands, creating opportunities for powertrain component manufacturers. This upward trajectory in consumer spending power is expected to continue to fuel growth prospects for the automotive powertrain market in 2023 and beyond.

Latest Trends

Emphasis on Lightweight Powertrain Systems

Automotive manufacturers are increasingly prioritizing the development of lightweight powertrain systems. This trend is driven by the need to improve vehicle efficiency and reduce overall weight, aligning with global efforts to enhance fuel economy and reduce emissions. Lightweight powertrains contribute to lower fuel consumption, making vehicles more environmentally friendly while also enhancing performance.

Advanced materials and engineering techniques are being employed to create powertrain components that are not only lighter but also durable and reliable. As automakers continue to seek ways to meet stringent emission standards and consumer demand for more fuel-efficient vehicles, the adoption of lightweight powertrain systems is expected to grow significantly.

Rise in All-Wheel Drive (AWD) Systems

Another notable trend in the automotive powertrain market is the increased use of All-Wheel Drive (AWD) systems, particularly in SUVs and other vehicles. This trend reflects changing customer demographics and technical improvements in AWD technology. Consumers are showing a preference for AWD-equipped vehicles due to the added traction and stability they provide, especially in adverse weather conditions.

Additionally, AWD systems are becoming more sophisticated, and capable of distributing power to individual wheels for optimal traction and performance. As SUVs continue to gain popularity worldwide, automakers are incorporating AWD as a desirable feature, further fueling the adoption of powertrain systems that support AWD functionality.

Regional Analysis

Asia-Pacific dominates the Automotive Powertrain Market, holding a substantial share of 61.6%

Asia Pacific, Dominating the global market with a commanding 61.6% share in 2023, the Asia-Pacific region is at the forefront of automotive powertrain innovation. Rising vehicle sales, particularly in countries like China and India, are driving the market’s growth. Asia-Pacific’s dominance can be attributed to its vast consumer base, government incentives for electric vehicles, and advancements in powertrain technology.

North American Automotive Powertrain Market exhibits steady growth, driven by a strong demand for hybrid and electric vehicles. Stringent emission regulations in the region are compelling automakers to invest in cleaner powertrain technologies. In 2023, North America accounted for approximately 15.2% of the global market share, with a focus on improving fuel efficiency and reducing carbon footprint.

Europe is a prominent player in the global Automotive Powertrain Market, representing around 18.3% of the market share in 2023. The region’s commitment to reducing CO2 emissions has led to the rapid adoption of electric and hybrid powertrains. European automakers are investing heavily in EV technology, with electric vehicles gaining popularity among consumers.

While representing a smaller portion of the market, the Middle East & Africa region is witnessing gradual growth in the adoption of powertrain technologies. In 2023, it accounted for approximately 3.5% of the global market share. The region’s focus on energy efficiency and reducing fuel consumption is contributing to the adoption of advanced powertrains.

Latin America, comprising countries like Brazil and Mexico, held a market share of around 1.4% in 2023. The region is experiencing moderate growth, primarily driven by the expansion of the automotive industry. Latin American consumers are increasingly looking for vehicles with improved fuel efficiency and reduced emissions, leading to a gradual shift towards advanced powertrains.

Key Regions

• North America
  • The US
  • Canada
  • Mexico
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Key Players Analysis

In 2023, the global Automotive Powertrain Market is marked by the presence of key industry players, each contributing significantly to the market’s dynamics and growth.

NIDEC CORPORATION has emerged as a pivotal player in the automotive powertrain sector, known for its innovative electric powertrain solutions. The company’s focus on electric motors and drive systems aligns with the industry’s transition towards electric and hybrid vehicles, making it a key contributor to the market’s evolution.

Mitsubishi Electric Corporation is renowned for its advanced automotive electronics and powertrain components. Their expertise in electric vehicle technologies, including power inverters and electric control units, positions them as a vital player in driving the adoption of electric powertrains.

Continental AG stands as a major player in the automotive powertrain market, offering a wide range of powertrain solutions. Their commitment to developing cleaner and more efficient powertrain technologies supports the industry’s objectives of reducing emissions and improving fuel efficiency.

ZF Friedrichshafen AG is recognized for its transmission systems and driveline solutions. In an era where vehicle efficiency and performance are paramount, ZF plays a crucial role in enhancing powertrain technology to meet evolving consumer demands.

BorgWarner Inc. specializes in advanced propulsion systems, including turbochargers and electric propulsion components. Their contributions are pivotal in enhancing the powertrain efficiency of both internal combustion and electric vehicles.

Magna International Inc. is a significant player in the automotive powertrain segment, offering a comprehensive suite of powertrain solutions. Their focus on power electronics and electric drive systems aligns with the industry’s shift towards electrification.

Market Key Players

• NIDEC CORPORATION
• Mitsubishi Electric Corporation
• Continental AG
• ZF Friedrichshafen AG
• BorgWarner Inc.
• Magna International Inc.
• VALEO
• Schaeffler AG
• Marelli Holdings Co., Ltd.
• Robert Bosch GmbH

Recent Development

• In February 2024, Mazda reinstated the RE Development Group, a team of 36 engineers, dedicated to advancing rotary engines (RE) for use as generators and ensuring compliance with regulations and carbon-neutral fuel applications.
• In February 2024, Honda Motorcycle & Scooter India (HMSI) unveiled its first flex-fuel motorcycle at the Bharat Mobility Global Expo 2024, enabling the use of a gasoline and ethanol blend for reduced environmental impact.
• In January 2024, Eatron Technologies secured A2 Series Funding led by LG Technology Ventures to advance AI-powered battery management software for automotive, with a focus on embedded and cloud-based features for software-defined vehicles.
• In January 2024, Hyzon Motors successfully deployed 19 hydrogen fuel cell trucks globally in 2023 and advanced its 200kW single-stack fuel cell technology to the C-sample stage, with production expected in the second half of 2024.

Report Scope