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The global commercial vehicle automotive thermal system market size was valued at USD 15.27 billion in 2021. The market is projected to grow from USD 15.09 billion in 2022 to USD 20.99 billion by 2029, exhibiting a CAGR of 4.83% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with commercial vehicle automotive thermal systems experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global commercial vehicle automotive thermal system market exhibited a decline of 4.74% in 2020 as compared to 2019.
A commercial vehicle automotive thermal system consists of regulating temperature for controlling the temperature of all components at their respective optimal temperature range with the help of technology. This technology is built on thermodynamics and heat transfer principles. Thermal management is a general term covering various forms of heat transfer, including convection, conduction, and radiation, involving different processes. The modern thermal management system consists of engine-cooling and air-conditioning systems.
Regional or international manufacturers are bound to follow the norms or emission standards regulated by the international governing bodies. However, as emission regulations vary in different regions and countries, the standards also vary accordingly. For instance, emission reduction is compulsory in Europe and the U.S. The European Commission and U.S. EPA have mandated upgrading engine technology to Euro IV/V/VI. This has fueled the demand for improved thermal technologies that comply with the upgraded emission norms and Asian countries such as India, Japan, South Korea, and China. However, South Africa has no such regulation or mandate.
Therefore, standardization of thermal system emissions and manufacturing-related norms may create lucrative opportunities for commercial vehicle automotive thermal system manufacturers, especially in developing countries. It will create a robust and uniform manufacturing ecology.
COVID-19 Led to Delays in Production and Declining Demand, Eventually Leading to a Loss of Sales
The COVID-19 pandemic significantly impacted the automobile industry, including the commercial vehicle automotive thermal system with key manufacturers entirely or partially closed. From 2020 through 2021, the automotive industry underwent a significant delay due to axle‐load reforms, liquidity crunch, shift to shared mobility, and many other factors the industry faced due to the COVID‐19 lockdown.
The U.S. trucking industry experienced a 5.8% drop from March 2020, wherein a loss of more than 88,000 jobs was observed in April 2020. This was part of a 20.5 million job loss across the U.S., which put the nation’s unemployment rate at 14.7%.
The government’s restrictions on import and export activities travel, and other lockdown measures significantly disrupted the supply chains. This resulted in a halt in production as most raw materials for automotive production were supplied from Asian countries. Additionally, a decrease in demand for automotive sales owing to government-enforced lockdowns affected global commercial vehicle types sales in 2020.
However, as the global market started opening in mid-2021, extended truncation of customer demand due to the lockdown drastically distressed the auto manufacturers. Moreover, the disrupted manufacturing operations and supply chains during the COVID-19 crisis and the development of new BS 6 and Euro 5 models made the auto manufacturers face the heat of a double revenue crunch.
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Integration of Smart Thermal Management Solutions into Commercial Vehicles to Boost Market Growth
Various companies are developing and upgrading their commercial and electric vehicle thermal system offerings. For instance, in May 2020, Mahindra Electric was able to offer a newly developed thermal system for electric cars. The company will use liquid-cooled thermal systems for its vehicles, which it claims will help reduce vehicle costs.
Similarly, in March 2019, Delta, a global supplier of power and thermal systems provider, introduced smart green solutions for energy creation at the Middle East Electricity (MEE 2019) event. This included complete HVAC solutions, inverter, and lighting solutions. Moreover, in 2018 Kendrion, the Netherlands-based company, also showcased a thermal management solution on a glass board precisely depicting control of coolant volume flow and valve functions. Thermal Control Systems (TCS) intelligently control engine cooling, resulting in extended engine service life and lower fuel consumption, thus reducing CO2 emissions significantly compared to custom wax thermostats. Such innovation & development from the manufacturers propel the commercial vehicle automotive thermal system market growth.
Increasing Stringency in Emission Regulations to Surge Demand for the Product
Advancements in thermal systems can reduce CO2 emissions due to adherence to emission standards. Also, it improves vehicle efficiency by optimally managing the heating and cooling systems and reusing the vehicle's residual heat. Various thermal systems equipped in luxury vehicles to meet the reduced CO2 emission targets include engine thermal mass reduction, thermal electric exhaust heat recovery systems, integrated liquid-cooled exhaust/EGR, and dynamic engine thermal control. OEMs such as Mahle and Continental are investing in R&D activities to bring these technologies to the commercial vehicle segment. Moreover, with the increase in global vehicle sales, controlling GHG emissions from vehicles, primarily commercial vehicles, has become a significant challenge. The European Commission (EC) and the United States Environmental Protection Agency (U.S. EPA) have regulated and mandated fuel economy standards to tackle this problem.
Moreover, many regulations concerning air conditioner emissions include sections 609, 608, and 612 of the Clean Air Act (CAA). These regulations have strict norms about the refrigerant, the servicing person’s eligibility, and reusing the refrigerant. Therefore, increasing stringency concerning CV emissions is set to surge the demand for commercial, automotive thermal systems.
Increase in Demand for EVs to Accelerate the Demand for Thermal Systems
The increasing demand for EVs is expected to reduce the cost of batteries. However, it is also essential that the vehicle range is not affected due to auxiliary loads such as cooling/ heating of the cabin and electric vehicle components. In BEVs, waste heat energy is deficient; therefore, these vehicles require auxiliary systems to be more efficient. Heating can heavily drain the battery in cold weather, depending on traction power. A survey of the BEV architectures indicates that combining some of the technologies, such as cabin pre-conditioning, air coolant, refrigerant-cooled batteries, and heat pumping & collection, can increase the efficiency of the vehicle. It has also been a critical factor in lowering the cost and complexity of implementation.
Battery thermal management, cabin air conditioning, electric motor cooling, power electronics, and thermal motor management are vital in BEVs. These systems significantly increase the driving range and performance by fuel efficiently reusing the waste heat. Thus, the demand for thermal systems is anticipated to increase with the need for commercial EVs during the forecast period, thus driving the global market.
High Cost of Thermal Systems to Restrain the Market Growth
OEMs have adopted new technologies to achieve desired results concerning stringent emission and fuel efficiency targets. Moreover, increasing demand for truck comfort features has compelled manufacturers to focus on powertrain, drivetrain, and in-vehicle cabin thermal systems. The performance of a commercial vehicle automotive thermal system can be calculated by estimating this system's cost against the reduction in CO2 achieved via this system. In addition, technologies with maximized CO2 reductions have already been accepted and introduced by some of the leading truck makers, such as Paccar, Daimler, Bharat Benz, and Tata Motors.
They have deployed technologies such as engine thermal mass reduction, variable engine oil pumps, integrated liquid-cooled exhaust/EGR, and polymer material heat exchangers in their premium models. Although there are more than 60 thermal system technologies, only a handful are used currently due to their cost-benefit ratio. Therefore, the high cost might restrain the global market growth of commercial vehicle automotive thermal systems.
Benefit of Having a Consistent Battery Life to Drive Battery Segment Growth
By application, the market is segmented into front & rear AC, engine & transmission, seat, battery, waste heat recovery, power electronics, and motor.
The battery segment is the fastest-growing and is expected to grow with a maximum CAGR from 2022 to 2029. A battery operates entirely under the temperature range of 20◦C to 40◦C. Battery thermal systems ensure the battery temperature, increasing the driving range and battery life, which is anticipated to propel segmental growth.
The front & rear AC segment dominates the global commercial vehicle automotive thermal system market share. The growth is attributed to the penetration of air conditioning systems irrespective of the fuel type or class of vehicle in the market. The engine and transmission segment consists of an exhaust gas recirculation system that helps improve fuel combustion using heated exhaust air. Some of the luxury brand vehicles utilized in low temperatures also have heated steering features for the comfort of drivers. The seat segment showcases sizable growth during the forecast period due to the seat heated ventilated feature currently offered in many vehicles.
Other segments, such as engine transmission, power electronics, and motors, have also shown a considerable rise during the forecast period.
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Rising Volumetric Sales of LCVs Made the Segment Grow
The market is categorized by vehicle type light commercial, heavy commercial, and medium commercial.
The Light Commercial Vehicle (LCV) segment in the market was dominant in 2021 and is projected to be dominant even in 2029. The LCV segment is currently the largest shareholder of the segment. It is expected to grow in terms of market share. Some of the advanced driver comfort features are equipped in the premium LCVs. LCV consists of smaller trucks and goods carrier buses, mainly utilized for shorter distances and lesser loads than other segments. They are ICE-propelled and also electrically. It requires a thermal system for power train transmission and battery systems. The volumes of these segments are higher than medium and heavy commercial vehicles.
The heavy Commercial Vehicle (HCV) segment is the fastest-growing segment during the forecast period. The thermal systems for these trucks include powerful radiators and HVAC. Increasing sales of these trucks owing to increasing mining and construction activities will fuel the HCV segment. The Medium Commercial Vehicle (MCV) segment is also expected to rise with a considerably higher growth rate.
Increasing Efficiency and Life of ICE-Propelled Commercial Vehicles Resulted in the Dominance
Based on propulsion type, the market is divided into ICE, BEV, PHEV, and FCEV.
The ICE segment held the largest market share in 2021. Clear direction from a federal policy standpoint in major markets and an improved range of new models leads to a direct transition to pure electric vehicles. However, cost feasibility and failure to deliver performance matching the IC engine-powered commercial vehicles have led to a prolonged growth and adoption of commercial EVs. Therefore, despite BEVs being the fastest-growing segment, the IC engine segment is anticipated to hold the most significant global market share of 98.99% during the forecast period.
Battery Electric Vehicle (BEV) segment also accounted for the highest market share after the ICE segment. It is expected to rise by the highest CAGR of 9.89% over the forecast period. Benefits in terms of subsidies, purchase incentives, and emission standards are heavily favored toward fully-electric vehicles. For instance, purchase incentives are significantly higher for BEVs than PHEVs in Germany, the U.K., and France. For example, in the U.S., BEVs accounted for around 75% of new EV sales, increasing by 55% more than in 2016. Similarly, BEVs accounted for about 82% of recent EV sales in China, with more than 2.9 million sales in 2021.
Increasing Deployment of Driver-Passenger Comfort Technologies will Propel the Growth of the HVAC Segment
On the basis of components, the market is segmented into HVAC, powertrain cooling, fluid transport, and others.
The Heating, Ventilation, and Air Conditioning (HVAC) segment is currently the largest shareholder, with a key market share of 53.55%, and is anticipated to continue doing so during the projected period. Also, HVAC is important for engine heating and cooling, which makes it the ideal ADAS component for commercial ICE & EV. Due to these reasons, this segment is projected to grow at a CAGR of 5.05%. HVAC systems are responsible for engine and cabin heating & cooling. It includes furnaces, air conditioners, heat pumps, thermostats, and others.
The fluid transport segment is the fastest-growing segment in the global market. Fluid transport components play a valuable role by ensuring long equipment life, less downtime, all-weather performance, and improved fuel economy. The proper functioning of these components is very important for the engine's functioning. Therefore, thermal management of these components is important, and this factor will propel the segmental growth during the forecast period.
North America Commercial Vehicle Automotive Thermal System Market Size, 2021 (USD Billion)
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Increasing Adoption of Commercial Vehicle Automotive Thermal System Technologies to Propel the Market Growth in North America
North America is expected to dominate the global market share in 2021 and is estimated to dominate throughout the forecast period. Stringent emission regulations and growing demand for EV thermal and cabin air conditioning systems are anticipated to drive the North American market. The growth is attributed to the increasing new CV sales post-2022. The growth of freight trucking, CV rental, and the last-mile delivery market can be attributed to the region’s growth.
The rest of the world is estimated to be the fastest-growing segment during the forecast period due to increasing expenditure on driver comfort and rising demand for CVs from Middle Eastern countries. The growth in APAC is attributed to the increasing new CV sales post-2022. Also, the region's rise in freight trucking, CV rental, and last-mile delivery market contributes to the market growth. Stringent emission regulations drafted by the government and investments from European thermal system manufacturers such as Mahle GmbH are fueling the market growth in the region.
Upgrading of Product Portfolio for Rising Electrification of Commercial Vehicles to Drive Competition in the Market
Robert Bosch GmbH has more than 200 years of experience in automotive solutions, industrial technology, and energy and building technology. It was established in 1886 and headquartered in Germany. It has its presence at 440 locations in 60 countries across the globe. The company offers components, such as coolant switch valves, electric coolant pumps, refrigerant valves, solenoid valves, and cooling fans, in its thermal segment. Bosch has a major revenue share in automotive and automotive components. The Bosch Group is a global supplier of technology and services that operates in four business sectors, mobility solutions, consumer goods, industrial energy technology, and building technology.
For example, Bosch developed and upgraded its smart thermal system for electric vehicles. One of the first companies to get familiarized with the concept was already published at the Frankfurt Auto show under the GaTE project in 2015.
Mahle GmbH is also a Stuttgart, Germany-based company with 100 years of experience in automotive parts manufacturing. It has a comparatively more significant presence in 160 locations in 18 countries globally. MAHLE Group in the thermal management sector contributes maximum revenue & provides HVAC modules, evaporators, heater cores, compressors, PTC auxiliary heaters, high voltage PTC heaters, blowers, condensers, climate control systems, charges air coolers, cooling modules, oil heating & cooling systems, and exhaust gas recirculation. The company, in March 2022, introduced a new indirect air condenser. This product has become a standard vehicle air conditioning component and added to the company’s aftermarket product portfolio.
An Infographic Representation of Commercial Vehicle Automotive Thermal System Market
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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, end-users, design, and technology of commercial vehicle automotive thermal systems. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition, the report encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD Billion)
By Vehicle Type
By Propulsion Type
Fortune Business Insights research report says that the market was valued at USD 15.27 billion in 2021 and is projected to reach USD 20.99 billion in 2029.
The market is expected to register a growth rate of (CAGR) 4.83% during the forecast period 2022-2029.
Increasing stringent emission norms and increasing new technologies to compete with these norms are expected to drive market growth.
North America led the market in 2021.
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