The global vehicle electrification market size was estimated at USD 89.26 billion in 2022 and is projected to reach USD 187.13 billion by 2030, growing at a CAGR of 9.9% from 2023 to 2030. Growth in this market is primarily driven by the automotive industry's increasing shift toward alternatives to petroleum-based fuels, as well as strong government support for environmentally sustainable transportation solutions worldwide. Various national governments are rolling out green mobility initiatives, and environmental agencies are imposing stringent emission reduction targets, encouraging the adoption of electric and electrified vehicles. At the same time, a rising number of environmentally conscious consumers are opting for electric vehicles to reduce their personal carbon footprint, further reinforcing market demand. Vehicle electrification offers numerous benefits including lower vehicle weight, reduced emissions, improved fuel economy, enhanced driving comfort, and greater safety which collectively enhance vehicle performance and strengthen market growth prospects.

The rising interest in electric vehicles in recent years has created significant demand not only for electrified vehicle components but also for the supporting charging infrastructure. The expansion of public and private charging outlets, combined with financial incentives such as tax rebates, subsidies, and reduced registration fees, is playing a crucial role in accelerating EV adoption. Additionally, the lower operating and maintenance costs of electric vehicles compared to traditional internal combustion engine (ICE) vehicles are expected to encourage more consumers and businesses to transition to electrified mobility solutions. However, the market does face certain challenges. Electric vehicles remain less feasible in regions experiencing power shortages, and limited battery backup times reduce convenience for some users. Furthermore, although EVs offer long-term cost savings, their upfront replacement and maintenance expenses can be relatively high. Nevertheless, the continuous rise in fuel prices and increasing global environmental concerns are expected to sustain the demand for vehicle electrification throughout the forecast period.

Key Market Trends & Insights:

  • Region: The Asia Pacific region dominated the market with a 52.2% revenue share in 2022, driven by robust government initiatives promoting electric vehicles and offering incentives and subsidies to accelerate adoption. North America is expected to grow at the fastest CAGR of 11.0%, supported by expanding charging infrastructure and substantial investments by automotive OEMs in electrification technologies.
  • Product: The electric vacuum pump segment accounted for the largest share at 13.3% in 2022 and is projected to grow at the fastest CAGR of 12.4%, owing to its essential role in braking systems of hybrid and electric vehicles. The electric power steering segment is also expected to witness strong growth, registering a CAGR of 7.2% as automakers increasingly adopt advanced steering technologies to improve handling and efficiency.
  • Hybridization Level: The Internal Combustion Engine (ICE) and micro-hybrid segment dominated with a 58.5% share in 2022, driven by the widespread use of start-stop systems and cost-effective electrification features. The Plug-In Hybrid Electric Vehicle (PHEV) segment is projected to grow at the fastest CAGR of 14.6%, supported by consumer preference for vehicles that offer both electric and conventional driving flexibility.
  • Vehicle Type: The passenger vehicle segment held the largest share of 71.1% in 2022 and is expected to grow at the fastest CAGR of 10.2%, fueled by high EV adoption among private consumers. The commercial vehicle segment held a significant 28.9% share, with growth driven by the electrification of buses, delivery fleets, and logistics vehicles to reduce operational costs and comply with emission standards.

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Market Size & Forecast:

  • 2022 Market Size: USD 89.26 billion
  • 2030 Projected Market Size: USD 187.13 billion
  • CAGR (2023-2030): 9.9%
  • Asia Pacific: Largest market in 2022

Key Companies & Market Share Insights:

Companies in the vehicle electrification market are focusing on mergers, acquisitions, and strategic collaborations to strengthen their market presence and expand technological capabilities. For example, in 2020, Chinese EV battery manufacturer CATL expanded its partnerships with Coach B.V. and VDL Bus in the Netherlands, as well as Quantron AG in Germany, to support commercial vehicle electrification in Europe by enhancing local services and technical solutions. Such alliances promote innovation and enable companies to enhance manufacturing efficiency and technological development.

Several leading players are also introducing advanced digital and electrification technologies that elevate the user experience. For instance, Continental Technology provided critical components for the new BMW iX, contributing to a seamless and intuitive vehicle interface. The company’s high-performance cockpit computer manages increasing software complexity and integrates numerous functions, showcasing advancements in vehicle digitalization. Additionally, Continental included ultra-wideband transceivers in the vehicle to improve smartphone connectivity, demonstrating how technological enhancements continue to shape the future of vehicle electrification.

Key Players

  • Robert Bosch GmbH
  • Continental AG
  • DENSO CORPORATION
  • Aptiv
  • Johnson Electric Holdings Limited
  • Mitsubishi Electric Corporation
  • BorgWarner Inc.
  • Magna International Inc.
  • AISIN CORPORATION
  • Johnson Controls
  • ZF Friedrichshafen AG
  • Valeo SA
  • JTEKT Corporation
  • Hitachi Astemo, Ltd.
  • Wabco Holdings Inc.

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Conclusion:

The vehicle electrification market is expected to witness strong and sustained growth as global efforts intensify toward reducing emissions, promoting clean mobility, and transitioning away from fossil fuel dependent transportation. Supportive government policies, expanding charging infrastructure, and the rising affordability of electric vehicles are creating a favorable environment for widespread adoption. Although challenges such as high initial costs, limited battery backup, and power shortages in certain regions may restrain the pace of expansion, ongoing technological advancements and increasing consumer environmental awareness continue to offset these constraints. The rapid development of key components including electric power steering, electric vacuum pumps, and hybrid systems is further strengthening the market’s growth trajectory. Additionally, strategic collaborations, product innovations, and major investments by automakers are accelerating the shift toward electrified transportation worldwide. Overall, these factors collectively position the market for robust development throughout the forecast period.