Automotive Powertrain Market Size, Share & Trends Analysis Report By Vehicle Type (Passenger Vehicle, Commercial Vehicle), By Propulsion Type (ICE, Electric Vehicle), By Region, And Segment Forecasts, 2021 - 2025

Report Overview

The global automotive powertrain market size was valued at USD 694.86 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 11.6% from 2021 to 2025. Low automotive sales and new requirements amid the COVID-19 pandemic have affected the overall automotive industry, leading to a subsequent decline in the growth of the market. The growing demand for vehicle electrification in the automotive industry and the increasing sales of electric vehicles are also contributing to the demand for automotive powertrains. Moreover, the increasing demand for automated transmission and engine downsizing to improve the fuel efficiency of vehicles is projected to accelerate the growth of the market.

Increasingly stringent carbon and nitrogen emissions regulations globally are also likely to drive market growth over the forecast period. Furthermore, high demand for automobiles, increasing consumption expenditure, and upgrades of automobile systems are projected to be significant market growth drivers. The fluctuating prices of conventional fuel and the rising sales of electric vehicles are expected to drive vehicle electrification initiatives globally. Stringent emission norms and growing awareness about environmental issues among customers are also expected to favor vehicle electrification initiatives. Leading automotive players such as Bosch and Renault Group are focusing on adding electrified vehicles to their product portfolios. These factors are expected to drive the growth of the automotive powertrain market over the forecast period.

Benefits offered by advanced technologies, such as combustion control improvements in internal combustion engines, are expected to trigger growth. Furthermore, the increased preference for vehicles offering improved driving dynamics is encouraging manufacturers to develop new systems catering to this demand in the current environment. Moreover, the high demand for vehicles with advanced features in emerging countries is expected to offer lucrative growth opportunities to the market.

The COVID-19 pandemic changed the business dynamics in 2020 and is anticipated to affect the overall business scenario over the next few years. Lockdowns imposed worldwide to reduce the spread of the virus have led to supply chain disruptions and temporary closures of numerous production facilities. As a result, shipments were delayed and production volumes plummeted. The dwindling sales of passenger and commercial vehicles also had an impact on the automotive powertrain industry. Manufacturers of automotive powertrains continued to face issues with supplies of raw materials over the second half of 2020 owing to delays in international shipments and reported production delays.

Decreased production volumes in North America and Europe led to an overall decline in production volumes globally on a year-on-year basis. Global car sales between January and April in 2020 dropped by about 33.3% compared to the same period in 2019, with around 9 million fewer cars sold. In the U.S., the sales of passenger cars were down by roughly 50% year-on-year in 2020 compared to 2019. The COVID-19 pandemic also caused a dramatic decline in electric car sales. The sales of plug-in light-duty electric vehicles in the U.S. in 2020 totaled 296,000 units, which was significantly lesser than the 331,000 units sold in 2019, a year-on-year decline of over 8.5%.

Vehicle Type Insights

The passenger vehicle segment accounted for the largest share of around 77% in 2020 and is anticipated to maintain its dominance over the forecast period as well. The shortage of computer chips in the automotive industry has affected production volumes and hindered market growth. Moreover, diesel, oil, and gasoline-based passenger vehicle markets are witnessing a shift toward electric passenger vehicles owing to increasing investments by governments in EV infrastructure and tax benefits offered to consumers. For instance, in the U.S., under the Clean Vehicle Rebate Project (CVRP), eligible candidates are provided a tax rebate from the State of California from April 23, 2021, onwards.

The commercial vehicle segment is projected to register a CAGR of over 11.7% over the forecast period owing to the increasing demand for a unified supply chain network connecting multiple transportation modes, including freight rail, air, and express delivery services, maritime transport, and truck transport. The introduction of electric vehicles in the commercial vehicle sector and the decentralization of production activities are expected to increase the production volumes of commercial vehicles globally. Moreover, truck digitization or connected trucks is expected to offer new business opportunities for key OEMs in the region, including Volkswagen (MAN & Scania), Daimler AG, and Volvo. These OEMs are expected to invest heavily in telematics solutions, which is anticipated to propel the growth of the commercial vehicle market.

Propulsion Type Insights

The Internal Combustion Engine (ICE) segment accounted for the largest share of around 91% of the overall market in 2020. The ICE segment consists of gasoline, diesel, and natural gas vehicles. Currently, gasoline engines are adopted widely and are projected to be replaced by diesel engines owing to the increasing difference between diesel and gasoline prices. However, the price difference between ICEs and EVs and improper charging infrastructure are the major factors that benefit the adoption of ICE vehicles. Due to these factors, component manufacturers are adopting hybrid powertrains to reduce fuel usage in vehicles.

The electric vehicle segment is projected to register a CAGR of over 29.8% over the forecast period. The slowdown in the sales of internal combustion engine vehicles and restrictions on CO2 targets have helped increase the demand for electric vehicles. The mass adoption of BEVs is an effective solution to cutting down emissions and reducing the total cost of ownership in the long run. Moreover, advancements in battery technology and reduction in Lithium-ion battery prices are also expected to boost the demand for BEVs over the forecast period.

Regional Insights

The Asia Pacific regional market accounted for the largest revenue share of more than 60% in 2020. It is anticipated to continue leading with a CAGR exceeding 12.0% over the forecast period. China remains the world’s largest manufacturer of automobiles as well as the leading automotive market. In 2020, China ranked first in terms of the production of passenger cars and recorded a production volume of nearly 21 million passenger cars. In India, the growing popularity of SUVs among customers is expected to drive the passenger vehicle segment. Furthermore, the electrification of vehicles, especially small passenger cars, is expected to influence market growth in the future. 

Europe is estimated to expand at the highest CAGR of over 12.8% over the forecast period. The rapidly growing demand for hybrid and electric vehicles is expected to favor the growth of the electric powertrain market. The EV sector in Europe also experienced substantial growth in 2019. Germany has been at the forefront of reducing fossil fuel dependency and lowering the environmental impact of the automotive industry, among other initiatives.

Key Companies & Market Share Insights

The key market players include BorgWarner, ZF Friedrichshafen AG, Schaeffler AG, Mitsubishi Electric Corp., and Magna International Inc. These players offer a wide range of automotive powertrains for ICE vehicles and electric vehicles. The companies are focused on providing advanced and technologically driven products to enhance their offerings. These leading vendors are also focusing on strategic initiatives such as regional expansions, acquisitions, mergers, partnerships, and collaborations to strengthen their positions in the market.

Moreover, these players are consolidating their market shares by undertaking M&A activities. For example, in June 2021, Mercedes-Benz, a German automaker, announced the acquisition of Yasa. Yasa is engaged in the development of next-generation electric drive technology. In March 2021, Bharat Forge, an automotive component supplier, announced that it had purchased a 100% stake in Kalyani Powertrain KPPL. KPPL will act as a Special Purpose Vehicle (SPV) segment on the company’s EV business. Some of the prominent players operating in the global automotive powertrain market are:

• BorgWarner

• Continental AG

• Magna International Inc.

• Marelli Holdings Co., Ltd.

• Mitsubishi Electric Corp

• Nidec Corporation

• Robert Bosch GmbH

• Schaeffler AG

• Valeo

• ZF Friedrichshafen AG

Automotive Powertrain Market Report Scope:

Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For this study, Grand View Research has segmented the global automotive powertrain market report by vehicle type, propulsion type, and region:

• Vehicle Type Outlook (Volume, Thousand Units; Revenue, USD Billion, 2015 - 2025)

  • Passenger Vehicle

  • Commercial Vehicle

• Propulsion Type Outlook (Volume, Thousand Units; Revenue, USD Billion, 2015 - 2025)

  • ICE

    • Gasoline

    • Diesel

    • Natural Gas Vehicle

  • BEV

    • PHEV

    • Electric Vehicle

• Regional Outlook (Volume, Thousand Units; Revenue, USD Billion, 2015 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • Greater China

    • Japan

    • India

    • South Korea

  • Latin America

  • Middle East & Africa